Telecommunication Systems And Marketing

The Philippines has a reputation of being the ‘texting capital’ of the World due to the overwhelming number of text messages being sent everyday and the revenues that the various telecommunication companies get out of this service.

The popularity of Short Messaging Service (SMS) or texting may be attributed to the very effective marketing strategies of the Telecommunication Companies dominating the local market today. When mobile SMS was first introduced in the country in 1999, there were only two Telecommunication Companies offering this service to the market: Smart Communications and Globe Telecommunications. As competition was limited between the two, the cost of making mobile phone calls and sending SMS was relatively high. Further, both companies were aggressive in their tri-media campaigns, dominating print, television and radio advertisements. Both were also heavy in their below-the-line advertising strategies, implementing widespread merchandising in major highways, provinces and cities. Both companies further competed with each other in locking out sponsorships of local festivities, ensuring their solid presence in key cities of the country. These strategies have effectively created a high demand for this service, setting trends and encouraging every individual to acquire a cellular phone, resulting to a dramatic increase in the number of mobile service subscribers in just a few years’ time.

However, the marketing strategies of both companies changed with the entry of SUN Cellular in 2003. Being the third player and coming in three years later, SUN Cellular had to find a way to penetrate the market already being dominated by the two large networks. SUN Cellular did so by introducing unbelievably low call and text charges, particularly the 24/7 Call and Text Unlimited service launched in 2004. This innovation caused the two giants to reconsider their marketing strategy and succumb to the pricing war to avoid losing their subscribers to this new competitor. SMS charges dropped from the previous cost of Php 1.00 per text message; call rates have likewise become competitive. Package rates offering unlimited number of calls and texts to the same network were introduced. This scheme prompted friends and family members to subscribe to just one network to maximize the offer. The prospect of having huge savings out of these package rates impressed the market and caused switching to which network is offering the most cost-efficient service.

Above-the-line media are still being utilized to showcase the price drops and the improvements in the services. All three telecommunications companies continue to promote its presence in local areas through heavy merchandising, but not so much in comparison to before. Smart and Globe obviously have become conservative in spending on merchandising, perhaps to control their advertising expense to cover for the adjustments made on their pricing. The real competition now lies in creating attractive pricing schemes to continue enticing the market into subscribing to their services. Advertising-wise, all three companies are highly conscious in finding the right media vehicle to convey the message to their captured market.

At present, all three companies continue to compete with each other in terms of market share. According to the National Telecommunications Commission Official Web Site, Smart is still the leader in mobile technology with its 59% share of subscribers. Globe comes close, placing second with 36% share, while SUN Cellular occupies the third spot with the remaining 5% of the market. SUN Cellular continues with its struggle to acquire a larger piece of the pie with its drive to offer more cost efficient services. Needless to say, SUN offers the cheapest call and text rates compared to those of Globe and Smart. However, great improvement should still be done in terms of network coverage and capacity to avoid problems such as congestion and downtime of cell sites. These concerns are the main reasons why after four years of presence in the business, SUN Cellular has yet to acquire a bigger market share despite its value-added offers. But in spite of this weakness, SUN has succeeded in compelling the two telecommunication giants to change their marketing strategies - an effect beneficial to the market as they are now given more choices on which network they should depend on for their telecommunication needs.

Kate Gardens is a custom essay writing expert writer and UK customers support consultant at Customessays.co.uk. Get more details for marketing dissertation writing.

Kate Gardens is a custom essay writing expert writer and UK customers support consultant at Customessays.co.uk. Get more details for