Mobile Virtual Network Operator (Mvno) in Indonesia: Competitive Business Analysis Using Porter 5 Forces Model

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Date Submitted: 01/12/2014 09:48 AM

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Sirat, D., Asvial, M., and , and Adyawardhani, L Telecommunication Regulation Research Center Electrical Engineering, University of Indonesia Kampus UI Depok, Indonesia

ABSTRACT In this paper, the competitive business analysis of MVNO implementation in Indonesia using Porter 5 Forces Model is proposed. Porter 5 forces model is one of the most often used as business strategy tools and has proven its usefullness on numerous ocassione. The model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure. The analysis consist of the intensity of rivalvy among existing player, threat of new entrant, bargaining power of supplier, bargaining power of buyer and threat of substitution. The analysis is needed in order to formulate strategy to face existing micro environment condition within the mobile industries in Indonesia. By using porter 5 forces analysis for MVNO implementation in Indonesia, the results show that the competitive profit in MVNO business in Indonesia is low. Several strategies need to be proposed in order to achieve the better competition positioning for Indonesia’s telecommunication industry. The decreasing bargaining power and subscribers of mobile network operator need to be proposed for MVNO developing in Indonesia.

Keyword: Mobile Virtual Network Operator (MVNO), Porter 5 Forces Model, Telecommunication Business I. INTRODUCTION A Mobile Virtual Network Operator (MVNO) is a mobile operator that does not own its own spectrum and usually does not have its own network infrastructure [1]. And now, MVNO is a new trend for mobile (celluler) business model. Many are familiar with simple...