[twentypercent]

Originally Posted by Apache

The problem with Starcomms involves a lot of dynamics that's not just restricted to them alone but to the entire PTO industry.

First of all, the number of competitors in that category of the industry is too much hence making the industry highly fragmented. also, the level of competition is very high thus eroding any possibility of making high margins since they mostly compete on price.

Secondly, the positioning of the CDMA industry puts them in bottom place in consumer's scale of preference when compared to the GSM companies (most consumers will most likely go for a GSM phone first when thinking of getting a mobile line). Also, the cost of acquisition of these lines are much higher for PTOs compared to GSM lines hence putting them at a disadvantage.

Unfortunately, it's quite difficult (but not impossible) to be disruptive in this industry because activities are easily imitated by competitors thus eroding any competitive advantage. remeber that to create a sustainable competitive advantage, the resources need to be valuable, rare, non-imitable and non-substitutable. Unfortunately, these are characteristecs that Starcomms seems to lack.

The point I'm trying to make is that Starcomms problems are not restricted to the company alone, but to the sub-Industry that it currently operates in. though there's still a lot that they can do, I do not think the results will change much until the fundamental problem which is facing the Industry is addressed such as consolidation, positioning, etc.

personally, i don't see much coming from this company or any other within the sector. My 2 kobo

The thing that came into my mind when reading your analysis is that Starcomms needs to be innovative and two things came into my mind almost immediately, the first is that Starcomms seem to lose it's creativity as soon as Actis divested from it and the actions of the FG almost always renders ay company's strategy useless.