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Feb 20, 2024

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CASE: TELIASONERA, A NORDIC INVESTOR IN EURASIA 1. How would you characterize the competitive intensity and attractiveness of the telecom industry in Eurasia by using Porter`s Five Forces? Intensity of Rivalry among Competitors The maturity stage of Eurasia market is at the early stage according to TeliaSonera’s research data. TeliaSonera was able to successfully expand into Eurasia and become a major player due to low network penetration in Eurasia. At present, TeliaSonera is the leading telecom company in Eurasia’s telecom industry and there are fewer competitors. Eurasia is a potential market for telecommunication industry. If the world competitors come forward to join this developing market in Eurasia, the intensity of Rivalry among competitors will arise. Threat of Potential Entry There are great barriers in the Eurasian telecommunication industry due to the strict regulation and policy by its government; the system is still highly bureaucratic and risky, the industrial institutions are having ambiguous setting leading to high cost of investment. But TeliaSonera has built and utilized its strong business and government in Eurasia, so the company could successfully expand its market share. In addition to this, capital requirement is another issue when considering the entrance into Eurasian market. TeliaSonera has already highly technology and better quality network facilities, those became a leading edge in comparison to TeliaSonera’s competitors. It takes a lot of time to acquire the above two assets, good ties with government and the huge capital investment. As a result, the threat of potential entry seems to be weak. Bargaining Power of Suppliers The suppliers are powerful only when there are many other buyers or their supplies are differentiated. High competitive environment causes existing competitors need to invest in the modernized technologies to enable the companies to compete in the Eurasian telecommunication industry. Bargaining Power of Buyers

Eurasia has a lot of young people. This means there are a huge sales opportunity and more demanding of high quality at the same time. When consumers’ needs for high quality services at affordable price increase, it can result in high competition among the competitors; the consumer can enjoy the lower price service, and therefore, buyers will get the strong bargaining power. Threat of Substitutes In current Eurasian market, fixed networks are not as developed compared to developed European countries and Eurasia people rely more on mobile networks. But if the number of internet providers grows, internet-based telephone services due to a relatively low price can be substitute to mobile data services. Moreover, the development of internet infrastructure can transform the existing fixed network into more useful things by convergence. 2. Many multinational companies fail in their expansion in emerging economies. What are the main capabilities and resources that drive TeliaSonera’ successful growth in Eurasian markets? First of all, TeliaSonera understood Eurasian market condition perfectly and seized the sales opportunity promptly. Eurasia mobile telecommunication market is not still matured and there are few competitors. Moreover, many Eurasia countries welcome foreign direct investments for economic development, TeliaSnera took these points consideration into its expansion strategies. The company invested a lot of money in Eurasia and can extend its business boundaries. In addition to the effective market strategies, TeliaSonera also has high level of service competitiveness in Eurasian telecommunication market. TeliaSonera utilized its know-how specifically in infrastructure investments in the region. This high cost investment led to larger and more satisfied customer base, this greatly helped TeliaSnera was a leading positon in most Eurasian counties. Finally, TeliaSonera has built a good relationship with government when doing business in each region. TeliaSienra has contributed to economic development in Eurasia market by FDI and creating jobs for local people. Through this good relationship with government, TeliaSonera could decrease risk of increasing the costs of investment.

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