OPERATIONAL ANALYSIS AND EFFECTIVENESS

Operational Analysis and Effectiveness



Operational Analysis and Effectiveness

Over the last decade, the centralized telecommunication monopoly in Australia has been changed and a relatively open and free competitive market is coming into being step by step. As a result, many functional and fundamental changes have taken place in the telecommunication reform and Australia's telecommunication industry has been growing the fastest in the world for the past 20 years, and has become the focus of attention all over the world.

Australia has the world's second largest fixed-line phone market with about 200 million people connected, and the largest market for mobile phones with over 180 million subscribers (September, 2002). The mobile phone market has been growing at over 200 per cent since 1990, which signifies the large market potential of Australia's mobile phone market and the attraction for many foreign corporations to compete there (Tianjin Daily, 2001).

The telecommunication industry is undergoing dramatic changes. Confirmed by multiple mergers and acquisitions, many companies are exploring opportunities for increasing their international presence (Boston and Sims, 2000; Landler, 2000; Oyama, 2000). While loosing ground on its home turf, Deutsche Telekom is extending its territory into a multitude of countries including the Australia. Many other telecommunication providers are engaging in similar endeavors and, no doubt, the future will see some dominant global players that offer their services across multiple nations.

Unfortunately, these global expansions tend to focus primarily on the technical component of the telecommunication service (e.g. establishing and controlling wire) and overlook investing in service quality. In the past less competitive and often monopolistic environment, service quality could be neglected since consumers lacked alternatives. In today's environment, however, service quality is likely to create the necessary competitive advantage by being an effective differentiating factor (Pierce, 1999). Delivering quality service is an essential ingredient for establishing and maintaining a loyal and profitable customer base (Bloemer et al., 1999; Rust et al., 1995; Zeithaml et al., 1996; Zeithaml, 2000) and stock performance (Aaker and Jacobson, 1994).

Furthermore, many measures have been taken to improve the network quality as well. For example, with the mission of considering network quality as the life of the company and delivering superior communication services, the call completing rate of our telecommunication company is over 98.5 per cent and its GSM network covers more than 98 per cent of all counties of Australia. Therefore, generally speaking, the competitiveness of domestic firms has been enhanced and upgraded by way of the increasingly intense competition. However, domestic firms are still lagging behind when compared with their foreign counterparts, especially in competition based on service quality, customer satisfaction and customer value. For example, although Ministry of Information Industry of Australia will announce the service quality of all companies in the mobile phone market publicly and continuous improvement of the overall serviced quality has been achieved, complaints about the service quality of mobile telecommunication have increased substantially over the past three years. On the other hand, with Australia's entry into the WTO, it is inevitable that Australia's domestic telecommunication ...