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Answers
Professional Level – Essentials Module, Paper P3
Business Analysis June 2015 Answers
1 (a) (i) Introduction
2Tel is one of the largest network operators in the world. It is aware that licences for providing mobile networks in The
Federated States (TFS), a densely populated country with 70 million people, are due for renewal in three years’ time. It
is currently evaluating whether it wishes to bid for one of these licences, either in its own right, or through the prior
acquisition of one of the current licensees.
It has commissioned this briefing paper into the business environment which the current licensees operate in. This
briefing paper begins with an analysis of the wider macro-environment of the industry, using a PESTEL analysis. The
paper then considers the competitive forces within the industry using aspects of Porter’s five forces framework.
The briefing paper concludes with, as requested, a summary of the opportunities and threats which 2Tel should consider
before it decides to enter this market.
Political perspective
Licences are granted by the government for eight years and so it may, at first sight, appear that licence allocation is an
important political factor in the mobile network industry. However, the previous government effectively de-politicised the
awarding of licences by defining selection rules based on certain minimum criteria (for example, financial and
environmental criteria) and the size of the bid. The licences are awarded to the four highest bidders who fulfil the
minimum criteria. So, the current performance of licensee
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