The state of competition in the Australian mobile resale market



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Research Method


This project has two key objectives:

  1. To investigate the current state of competition in the mobile telecommunications industry with regards to ownership structures, relationships, service offerings, retail presence, and consumer concerns.



  1. To investigate the extent to which the industry includes particular practices that could be perceived as deceptive and whether further consumer safeguards are warranted.

Because of the diversity of information to be considered in relation to these objectives, a mixed methods approach was used to access information. The primary information sources used were:

  • Archival data

Data were obtained by searching and retrieving information from original records, such as ASIC Company Registers and provider websites. This data is primarily used to examine the nature and ownership of corporations currently active in the Australian mobile phone services market.

  • Focus groups

Focus groups were used to identify unprompted issues and factors relevant to people’s decisions regarding mobile phone services and providers. This is a popular small group technique for eliciting attitudes, opinions and perceptions. Insights obtained from the focus groups were used in developing the online surveys.

  • Online surveys

Online surveys were used to collect responses from a large number of participants across Australia. The surveys were distributed to consumers and retail employees through a variety of internet channels.

The combination of these three methods provides a rich understanding of potential competition and consumer issues in the Australian mobile service provider market.


Stage 1 – Archival (August 2014 – February 2015)


The objectives in this stage were to develop an understanding of which MVNOs and MNOs were operating within Australia, and what offers each company provided.

First, a variety of internet search tools were utilised to locate information about mobile telecommunications service providers operating in Australia. These search tools included Google33, Whirlpool34, MVNOdynamics35 and the TIO36 website. This data gathering exercise occurred in late August 2014 and resulted in 56 providers being identified.

From these initial 56 “brand name” providers, a total of 475 retail mobile telecommunications offerings were found across the providers’ websites. A set of commonly communicated information items were identified, with the following details being collected for each offer:


  • Provider brand name (e.g. Bendigo Bank telco which is a brand of Community Telco)

  • Network used (e.g. Optus 4G)

  • Plan type (e.g. Month to Month Post Paid)

  • Plan bundling (e.g. SIM only or bundled with handset)

  • Plan name (e.g. XL Value Pack)

  • Expiry time – if applicable (e.g. 30 days)

  • Credit value included (e.g. $70 of calls or 300 national minutes)

  • Data included (e.g. 300MB)

  • Plan price per period (e.g. $80 per month)

  • SIM + delivery cost (e.g. $9.90)

  • Activation fee (e.g. $50)

  • Fee notes (i.e. any other fee condition imposed upon the plan)

  • Excess data price quoted (e.g. $10 per gigabyte)

  • Plan URL (i.e. link to webpage where plan details were found)

While collecting the plan details, the provider websites were also searched to identify each provider’s Australian Company Number (ACN) or Australian Business Number (ABN). These numbers are provided by the ASIC and provide the basis for identifying and extracting entity-related information that has been filed with ASIC over the life of the business. This resulted in 52 “Current & Historical Company Extracts” (four companies had direct mobile offerings under multiple brands) and 14 “Form 388 - Copy of financial statements and reports”.37

The ASIC extracts were used to obtain a variety of management and ownership information, as follows (note that not all companies have all items):



  • Organisation Details

  • Address Details

    • Current

    • Historical

    • Contact Address

  • Officeholders and Other Roles

    • Director(s)

    • Secretary

    • Appointed Auditor

  • Ultimate Holding Company

    • Current

    • Previous

  • Petitioner Court Action

  • External Administrator

    • Current

    • Previous

  • Share Information

    • Share Structure (with ASIC document numbers)

    • Previous Share Structure (with ASIC document numbers)

    • Members

    • Previous Members

  • Financial Reports (with ASIC document numbers)

Next, web searches were conducted to collect public information about company directors identified from the ASIC extracts. This was followed by a search for acquisition and merger information for the Australian telecommunications sector, with the yearly ACMA communications reports38 being the primary source of data, supplement by industry news articles.
Lastly, further web searches were conducted to identify news articles in the mainstream and industry press relevant to each of the mobile provider brands. This background information informed the report discussion and also serves as a large repository of knowledge for future text mining.

Stage 2 – Focus groups (March 2015 – June 2015)


Focus groups were used to obtain insights into factors that influenced mobile consumers’ decisions about choosing and switching service providers. Two focus groups were conducted to obtain a range of participant characteristics. The issues and factors identified from this stage informed the development of the online survey in Stage 3.

Participants


The first focus group of five participants was comprised of four females and one male, with an average age of 27.6 years (the age range was 24 to 36). All participants were postgraduate students at ANU, who volunteered via in-class invitations and notices placed on course websites. The average monthly spend for their mobile phone service was $40.07, with most (80%) using post-paid billing agreements.

The second focus group consisted of eight female staff from the ANU who responded to email invitations to approximately 40 people. The average age of participants was 32.7 years (the age range was 24 to 49 (mean 32.7). The average monthly spend for their mobile phone service was $42.84, with five (62.5%) using post-paid and three (37.5%) using prepaid billing agreements.


Materials


The materials for the focus groups were as follows:

  • Information sheet outlining the purpose of the focus groups and ethics protocol details

  • Consent form by which participants could agree to participate and be audio recorded.

  • Initial conversation starter questionnaire (see Appendix 3 – Focus Group Thought Exercise) to facilitate thought processes relevant to the discussion activity.

  • A series of cards containing the decision factors elicited from participants during discussion.

  • Blank paper on which participants ranked the importance of decision factors.

  • A procedure sheet for each facilitator.


Procedure


The focus groups had three phases:

  1. Initial conversation starter questionnaire that was completed individually by participants immediately after signing consent forms and taking a seat around the discussion table. This took approximately 5-10 minutes.



  1. The 30 minute focus group discussion involving all participants. The dialogue evolved naturally, with facilitators initiating further discussion with open-ended questions such as:

    • What do you consider when choosing a mobile phone service provider?

    • Which factors do you think are vital?

    • Which of the vital factors do you think are most important?

    • Which factors would cause you to change service providers?

    • Where do you go looking for information about service providers?



  1. After the participant discussion was concluded, the facilitators prepared a 10-15 minute card sorting exercise to rank and prioritise the decision factors identified in the focus group discussion.





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