WHATS INSIDE?

Macro Environmental Analysis PoliticalLegal: Jhane Olalia Natural Environment: Rochelle Triguero Sociocultural: Christine Ong EconomicTechnological: Jolly Gaw

POLITICALLEGAL FACTORS The Political-Legal Factors does not only protect the customers but also the producers of products. Since the establishment of telecommunications in 1928, several changes to management have been adapted in compliance to new laws, policies, rules and regulations from both external and internal factors. An example of it is the issue regarding the National Telecommunications Commissions bid in the lower accesses charges to PLDT and its smaller rival, DIGITEL. They opposed to NTCs decision because they believe that they do not have any power to mandate interconnection rates. TheNTC is proposing that access charge should not be higher than P0.25 per SMS on the first year of the implementation of the MC; a maximum of P0.20 on the second year; and not higher than P0.15 on the third year and onward. If implemented, a text message would cost only P0.50 each on the first year; P0.40 on the second year; and P0.30 on the third year of implementation. For cellular voice calls, the interconnection charge between two separate networks shall not be higher P2 per minute during the first year; not more than P1.50 on the second year; and a maximum of P1 on year 3 onwards. The cost of mobile voice calls may go down between P3 and P4 per minute on the first year; P2 per minute on the following year; and P1 per minute on the third year and onward. Today, one minute of cellular voice call rate is pegged at P6.50. In the end, they both imposed to NTC the reduction on access charges because it will surely affect their revenues that NTC should impose at fair and reasonable charges.

Policies such as ownership shares of 60%:40% Filipino and foreign ownership rule are affecting the telecommunications industry. According to an article, the Supreme Court issued a ruling in June 2012 which changed the calculation of foreign ownership stakes in local public utilities, in a change of 40% foreign ownership limit which could put them to breach. It is known that most telecommunications company, though run by local managers, thrive in investments given by foreign investors. This policy will result to lesser investments from foreign contributors, hence, stimulating the role of local investors. Aside from policies public releasing of market shares in the Philippine Stock Exchange and the New York Stock Exchange are aligned to the political and legal factors as processes and procedures that are necessary in doing such are stipulated and mandated by law. For example, PLDT in its compliance with various laws, rules and regulations of the Philippine and U.S. regulators, is submits various corporate governance related documents and disclosures before it opened itself to the public. The political-legal factors also include the public disclosure of all relevant material information. In this, the company ensures that its public reports and documents, including the reports that the Company files with the Philippine Stock Exchange, the New York Stock Exchange, the Philippine and the U.S. Securities and Exchange Commission complies with respect to the laws and regulation. Internally, each telecommunication company writes and implements codes of ethics, mission and vision which lays the internal political-legal factors. As an example, PLDT employs the Code, Board approved Code of Business Conduct and Ethics. It sets out standards of business conduct and ethics, which are their commitments in their behaviour to customers and various business dealings. These ensure that there would be no any form of bribery and corruption to government representatives or regulators where we can also attribute the spawning trend of building committees on corporate governance, which also aims to increase transparency and efficiency.

NATURAL ENVIRONMENT FACTORS The Natural Environment focuses on the health of nature. Companies make much assurance that they are not pushing the limits of the planets limited resources. Global warming is now considered a great threat, carbon emissions and other activities contributing to pollution are watched closely. Green value is greatly stressed. For example, copper which has been greatly used as copper wires is mined as natural resource in the country and contributes negatively to the environment. In the years that have passed, they have invested in shifting to fiber glass to reduce copper consumption but since the newer material is more fragile, copper is mixed with the use of fiber glass in some instances. Aside from that telecommunications companies give effort in restoring the natural environment, though their operations does not depend intensively on the natural environment. For example, on the 27th of June 2011 PLDT-Subictel launched its first tree-planting project under their companys social responsibility program. The Specific Environment deals with external-matters which directly influence the business such as organizations, groups and persons with whom the company conducts business. The profitability and sustainability of any business depends on its stakeholderspersons, groups, institutions affected. Although sometimes conflicting, a company decides which to prioritize in the case of disagreements between the different stakeholdersthe greatest value for the greatest number of stakeholders.

SOCIOCULTURAL FACTORS When the idea of landline was presented to our culture, it became popular. People would want to have these phones because they get an easier and faster way to talk to others. What made it hard was installation of landline was very difficult. PLDT, who is currently the No. 1 telecommunication company in the Philippines, had the monopoly of the telecommunications in the country. Our culture slowly paced with technology and now we are living in the age of technology where technology come and go in very fast. In the present time, we can see great changes in technology. People become engross with these technology that they would try to buy them immediately when they have the chance. Our culture and lifestyle have become attached to technology but only some are capable of coping up with the changes. As the population grows, the means of communication grow. Although as said above, not all are capable of coping up to modern changes, therefore technology introduced a cheaper means of communication. But as technology progress competitors arise. The entrance of Globe, Bayantel and other telecommunication companies broke the monopoly of PLDT. Wireless communication became an option for everyone. With the technology made cheaper, more people are now capable of buying not only the services rendered by PLDT, but by the other companies as well. Now-a-days, even children could be potential customers. With internet and phones becoming a necessity, telecommunications broaden their sales and entered the market of rendering

of internet services. Almost everyone wants to have internet access and cellphone signal at any place. In telecommunication, educational background is important. Faster innovations and better marketing strategies can garner more customers than the other companies. Marketing strategists and other people can help the company gain more customers than its competitors. While with people who have higher educational levels can help achieve innovations easier. Since these telecommunication companies are based here in the Philippines, marketing strategies of telecommunication companies should adapt to the norms and values here. When selling their services they should not only think of profit but also the benefits of the consumer. Telecommunication companies can give out cheaper services but ones that will make them go out of business. For the Filipinos, they like famous people. This is the reason why advertisements of companies always have artists to represent the companies. Their advertisements should show how beneficial their services to the modern lifestyles of Filipinos. A good example will be cheaper communications with Filipinos who are OFWs. What are the social responsibilities of these telecommunication companies? It is their responsibility to adapt to the changes in technology and make their services better. People will demand better services and fair pricing of what they render. Better innovations are to be expected especially in the future. They should be responsible for providing a better environment for its company, its customer and its employees.

ECONOMICTECHNOLOGICAL FACTORS Technology plays a vital role. Throughout the years, technological breakthroughs in various fields of specialization have proved to create significant impact in the life of people. Following a change in lifestyle due to technological developments, households create new economic demands while suppliers, on the other hand, strive to meet the ever changing needs and wants of their consumers. For a particular industry to succeed, its always important to take into consideration the trending technological and economic factors, for if an industry is incapable of coping up with the rapid technological advancements in the current globalized world, then it will eventually fall behind the pace and lose the battle of the survival of the fittest. And also, if companies striving under certain industry are unable to shape demands of household and its supplies, then no matter how strong its financial background is, it will always end up closing its doors as a result of minimum profit. Therefore, we should never underestimate the power of technology and economy in the course of planning, organizing, leading and controlling the industry and its business enterprises. Furthermore, in todays world of information technology, it is equally important that companies are able to catch up with competitions in the telecommunication industry nationwide and worldwide. And before proceeding any further, its time to take a look at the technological factors that have

lead to the evolution and success of the telecommunications industry as a whole in the present time. For instance, the major technological changes that have occurred in the said industry have emerged alongside with cutting edge technologies such as computers, software and artificial intelligence, fiber optics, networks, and standards that have immense impact on the various information technologies. And specifically, they are applied in the development of traditional telephony, mobile cellular telephony, and data processing and communication which in turn affect many industries, primarily telecommunications. Moreover, other technological advancements that are of significance in boosting the market for telecommunications industry worldwide are the increasing speed of computer processors and networks; movement towards digital technology; development of LANs and WANs; development of data technology and internet technology; development of mobile technology; and last but not the least, the convergence of data technology, voice technology, and computer technology. In particular, the increasing speed of networks provides the means for decreased unit transmission prices, increased bandwidth availability, and increased capability of carrying high-bandwidth applications such as video; the development of LANs and WANs, including routing, hubbing, and bridging capabilities allow the continued advancement of routing and switch capability and the continued advancement of the corresponding protocols that work to the combination of voice, data, and mobility; the movement to digital technology provides opportunities to merge various service modes into an integrated whole as it facilitates transmission, switching, processing, and retrieval of information. This digitalization, merging the communications and computation functions, is the product of dramatic in device and material technology which involves integrated circuits and optical fibers. And as the role of digital processing increases, systems and services become more intelligent and labor-saving on one hand, and more software-intensive on the other hand. On the other hand, as these information technologies continue to evolve, several companies under telecommunications industry also exerted enormous effort to make various innovations that would enhance and improve the services and products they offer to their consumers. For instance, some companies have tried to upgrade their network to facilitate transmission of information of all kinds via digital packets of data, just like the internet. With the transformation, it enables companies to provide even more cost-saving services with

greater efficiency. Introduction of satellites and optical fibers, among other technologies, also serve as a great achievement in the globalization of telecommunications services. Furthermore, landline innovations such as BRAINS (Broad and Robust ATM (asynchronous transfer mode) and Internet Networking Solutions), DSL (Digital Subscriber Line), Text 135, Premium phone services, value-added phone services such as Call Waiting, Call Forwarding, 3-party conference calls, Speed Calling, and Caller ID, and Prepaid landline service are also made possible because of the adaptation of internet and digital technology. To sum up, telecommunications industry has undergone a long way to shape and influence the demands of consumers in the market. They was able to accomplish this by employing latest technology in their services and products and by observing latest trends and lifestyle of people in accordance with the technological factors, and subsequently make innovations that will enhance and facilitate the delivery of their services. Along the way, companies under telecommunications has also partnered with different corporations to make things happen and possible. With the presence of technology, telecommunications saw numerous opportunities which had lead to its current success. All in all, they have successfully made a change in the lives of people.