Poster 5 forces analysis is used to analyze company structure and the corporate strategy.

This
analysis is help to analyse everything from competition intensity the company profitability.
Threat of new entrants
The new entrants is defined as the new competitors in an industry. The high profitable market
will attract competitors interested to enter the firm. To reduce the rate of new firm enter,
government should impose the high barriers of entry. This will maintain the existing firm profit.
For industry telecommunication, to start up the business, it is compulsory to get the
license from under the Communications and Multimedia Act 1998. In addition, the procedure is
complicated and the license fee is expensive. Its cost up to RM50, 000. So, small firm are hard to
compete with the company if they have capital insufficient. Below cost of individual

Source from: http://www.skmm.gov.my/skmmgovmy/media/General/pdf/LicensingGuideBook.pdf

Despite of that, not only need a big amount of start up cost, it also need some professional skill
and expert on this firm, so it is not easy to copy and hard to compete with the existing company.
Rivalry among competitors firm
Rivalry among competitors refer to the extent to which firms within an industry limit each
others profit potential and put pressure on one another. If the competitors rivalry are strong,
competitors will try to make a good strategic and monopoly the market.
DiGis competitors are Maxis and Celcom. For the first half of year 2005, Maxis and Telekom
Malaysia lauched their 3G services. Umobile is also lauched the service on second half of the
year 2008. DiGi was the third largest mobile operator in Malaysia with an subscriber market
share of

Maxis and Telekom Malaysia launched their 3G services in the first

half of 2005. U Mobile launched its 3G service in the second half of
2008. As at 31 March 2013, DiGi was the third largest mobile
operator in Malaysia. According to the Digital News Asia article
which is written by Goh Thean Eu, Digi has successfully fight with its
rivals in several key segments. In year 2013, the revenue is only RM
1.71 Billion, representing market share of 16%, which is far to
compete with Maxis which is having RM4.68 billion with 45% market
share and Celcom with the RM 3.87 revenue.

However, Digi annual revenue has exceeded RM6 billion and the
market share is more than 29%. Below table are shown total
revenue and market share.

Source: http://www.digitalnewsasia.com/mobile-telco/a-deeper-look-into-malaysias-big3mobile-telcos-in-1h2014
Threats of Substitute
Substitute product is a product that have same functions with another product.
Data service and voice service operate by DiGi. The thread of substitute products for both
service are introduce:
Voice Service
The substitute such as letter, email and fax are traditional and modern substitute. The broadband
internet service able to provide faster and connet to the worldwide web. In addition, phone call
via internet with a low cost already threatened the mobile telecommunication company.
Data Service

Broadband is the mainly product focus on data service. Nowadays, consumers are demand fpr
quality broadband service and this is the opportunity to let new entrants enter the firm by
providing the substitute product with a best performance and low cost.

Bargaining Power of Suppliers

Mostly all the network compenents which is used by telecommunication industry are depends on
the import, because some of the components cannot find locally as the bargaining power of
suppliers is high.
The GSM equipment which is used by DiGi is only available by a few of suppliers. So DiGi is
only have a few choice to choose the supplier, so the bargaining power of the suppliers is become
stronger.
Bargaining Power of Buyers
Bargaining power of customers is one of the forces to determine the intensity of competition. It
refer to the pressure of the buyers can exert on business to enable company provide good
customer service and high quality products with cheaper price.
There are many substitute product such as email, fax and internet to determine the bargaining
power of buyer. Customers are preferable broadband with high speed service and low cost. This
will make the rivalry of competitors are becoming stronger. Thus, the intensity of competition
among mobile and broadband service will only bring the benefit to consumers because they can
enjoy the low cost.