The Impact of Macroeconomic Variables on the Telecommunication Industry

The Comcast Corporation is currently exposed to several threats with the competition continuing to increase in the industry. The biggest of these facing the organization are regulatory changes and technological changes.

However, in the era of the Internet, the market has changed. Cable television has been challenged by many alternative venues of media consumption, most notably in the form of the Internet. "There has been some competition from satellite TV players and (in a few areas) TV over IP" (Masnick 2008). "Thanks to the rise of Netflix, Hulu and hardware like the Roku box and Apple TV, cutting the cord to cable TV doesn't mean cutting yourself off from your favorite shows and channels" (Glaser 2010). However, most high-speed Internet consumers receive their Internet connection from the cable company, which indirectly funnels money to support cable TV.

In the Pay TV industry, it would be difficult and expensive to enter the market. The barriers to entry involves costly infrastructure that is already controlled by the big players in the market. Whether programming is coming over cable, fiber, DSL, or satellite dish, the costs to implement this infrastructure is very high. The cost to launch a satellite in 1997 was $51 million, which would be close to $80 million in present dollars (DISH). The threat of new entry is low.

The future of the telecommunication industry is an exciting future. No longer can these companies depend on telephone service plans to maintain profit. Each company needs to find other avenues, packages and services that can be sold to existing customers while attracting new customers. The companies

Comcast is planning expanding globally. With the main competition with the Dish Television Network. Comcast’s have devised

At the time of this launch, expectations for the cable industry itself were high: with many rural

Cernauskas, D., & Tarantino, A. (2011). Essentials of Risk Management in Finance. Hoboken: John Wiley & Sons, Inc.

Is it not slightly alarming that Comcast has managed to grow at such an alarming pace? Although it is at the same time truly amazing how well they are able to gain ownership of successful business ventures and re distribute

Comcast practices the ‘Best-cost provider strategy’ in a business model that promotes convince for their customers by offering integrated services all on one bill. “Best-cost provider strategies are a hybrid of low-cost provider and differentiation strategies that aim at satisfying buyer expectations on key quality/features/performance/service attributes and beating customer expectations on price” (Gamble et. All) The elements in the best-cost provider strategy include: bundles with internet, cable and telephone services at varying internet speed, cable channels and levels of telephone service; different cable packages with different channels and promotional deals and

The telecommunications coverage in rural and regional areas in Australia has monopolistic characteristics. Telstra has a competitive advantage over Optus with 99.3% coverage of the population compared to Optus with a 98.5%, this is equivalent to an estimated 192,000 more potential customers. Although Telstra has this competitive advantage they claim that the revenue received from their rural base stations does not cover the cost of development and maintenance.3.

Rogers Cable is the leader in Canada’s cable television market, with a over 2.3 million cable television subscribers and 500000 internet subscribers. In 1993 the Canadian government relaxed the norms of telecommunications industry followed by an application in 1999, allowing local carriers to change the content of the information passing through their networks. This led to increased competition in the market and the customers enjoyed a lot of choice. As such Rogers Cable focused completely on increasing its subscriber base and

Comcast has to balance all of these factors in their macroenvironment while making their internal business decisions and deciding how to price their advertisement slots and subscription charges.

1. Changes in the US regulatory environment created additional challenges for Continental’s core business: 1992 Cable Act limited the cable TV companies’ ability to raise cable rates whereas costs at market prices reached up to $2000/subscriber. This inevitably led to constrained profit margins

3. As more viewers begin using PVRs, what happens to the revenues of the major networks (CBS, NBC, ABC, and FOX)?

The external analysis of Dish Network shows the TV service providers industry and environmental factors that affect those companies in the industry. The two studies that were used to examine the external factors were PEST Analysis and Michael Porter’s Five Competitive Forces. Through these two studies, Dish Network can have a better understanding of not only their industry factors, but other environmental issues that may cause a need for concern.