Strategic management report on Mabuhay Telephone Company

Mr. Aaron Gotauco, 65, President and Chief Executive Officer of Mabuhay Telephone Company (Matelco), had noted that the Philippine telecommunication industry have become and is expected to continue to become increasingly competitive. Such competion has caused decline in certain international calling rates and may lead to further decline in international rates in the future. Such declines, if not offset by increase in call volume, increase in subscriber base, or increase in local and domestic long distance rates, could adversely affect the company\u27s revenues and operating results. Although the Philippine government has taken concrete steps to implement the deregulation of the Philippine telecommunications market since 1993, such market has been and continues to be dominated by PLDT. PLDT remains the largest of over 60 entities furnishing telephone services. Since deregulation, however, Mr. Gotauco has observed that the number of telecoms service providers has increased significantly and this trends is continuing. He expects that future deregulation measures will generate new competion for Matelco. Although the President still believes that Matelco will compete effectively and eventually hold a significant market position in the Philippine telecoms market, with the recent emergence of new telecoms companies in the Philippines, the planned expansion and modernization programs of other telecoms service providers and the present policy of the government to encourage competition among authorized telecom firms and require the installation of fixed wireless by providers of cellular services and operators of IGFs, Mr. Gotauco anticipates that the company will face increased competition int he future. In addition, Mr. Gotauco anticipates that with the proliferation of telecoms service providers, in the Philippines telecoms industry many consolidate to result in fewer and potentially stronger providers in the longer term. Other potential competitors include operators of mobile telecoms, electronic data transmission systems and other telecoms technologies available currently or in the future. Moreover he, is quite concerned with the fact that Matelco was the only telecom firm not allotted a service area under Executive Order 109 (EO 109), which in turn allowed its competitors access to its franchise areas. Matelco, on its part, iams to install about 1,200,000 lines by the year 2004. all the lines shall be fully-digitized. This strategic management paper on Mabuhay Telephone Company was made to provide practicable corporate strategies that would help optimize the profit potentials of the company. Likewise, this paper shall define the external environment in which the company is operating. Discussions about the philippine telecommunications industry\u27s performance in the past seven years will also be covered. Moreover, Matelco\u27s internal environment would be presented and analyzed to determine how well its past operations have been and how well it will do in the near future