Executive Summary

This study is based on the comparative analysis of Smart Mobile Pty Limited in the telecommunication industry. The author of the study incorporated with the examination of the pre-paid Telco industry to signify its market value and the risk faced by the investors. Hence this study is also based on the comparative analysis between two organisations within the telecom industry. Smart only offers pre-paid services utilising the network capabilities and back-end technology of the carrier partner SingTel Optus Pty Limited (Optus) and has 3.1% market share of the $2.8bn pre-paid market (I’ll add the citation). Therefore, the purpose of this research is to analyse Smarts performance within the Telco industry to advise the Directors of a valuation. The process of discourse has become far easier than before. Due to this reason, the telecommunication industry starts to expand and now covered it has covered a maximum market share. The telecom industry is increasing day by day; therefore, it focuses to keep the customers in working domain to make the industry prominent and useful for the customers. However, the use of smartphones is not possible without the use of the Sims card. Also, the risk analysis, business valuation and ratio analysis have also been done to signify the study importance. Then, analysis has been made on the analyzed, and a reflection is also made on the findings and implications of the study. At last, the reports end with concise conclusion and recommendations.

1 Introduction

This study is based on the comparative analysis of telecommunication industry. The organisation selected for study purpose is based on the telecommunication industry. This study comprises on the case of the Smart Mobile Pty limited. It is a pre-paid provider of mobile telecommunication. The main aim of the study is to elaborate the market value of the Smart Mobile Pty limited in the telecom industry. It will be discussed in the study that is the decision for choosing Smart Mobile Pty limited services will be fruitful or just a waste of time. Thus, the author of the study incorporated with the analysis of the pre-paid Telco industry to signify its market value and the risk faced by the investors. However, a recommendation analysis is also done in the study to minimise the risk factors. (138)

1.1 Background

The case organisation, Smart Mobile Pty Limited (Smart) is an Australian pre-paid mobile Telecommunications provider which operates as a mobile virtual network operator (MVNO), providing wireless services to its customers with a youth focus (Smart Mobile Australia, 2018). Smart only offers pre-paid services utilising the network capabilities and back-end technology of the carrier partner SingTel Optus Pty Limited (Optus) and has 3.1% market share of the $2.8bn pre-paid market (I’ll add the citation).

1.2 Project Topic

The pre-paid industry represents 39% of total mobile services (Telesyte, 2018) which has allowed Smart to grow in revenue at a 37.4% compounded annual growth rate (CAGR) (I’ll add the citation) since launching with Optus (I’ll add the citation) in March 2013. This growth rate is forecast to slow (I’ll add the citation) motivating the Smart Directors to engage Vic Investment Pty Limited (Vic) to run a sales process to invite investment into the business to expand its products. This process resulted in three offers, all being rejected. A second attempt overseen by Aust Advisory Partners (Aust) has seen further offers rejected as a result of the Directors not aligned on the valuation of Smart. This has prevented new investment which would provide an opportunity for Smart to expand into the $2.3bn Bring Your Device market (BYO market) and increase its awareness in its youth demographic.

1.3 Purpose of Research

Therefore, the purpose of this research is to analyses Smarts performance within the Telco industry to advise the Directors of a valuation that would be acceptable to allow investment into the business and seek out product opportunities. An examination of the pre-paid Telco industry will be conducted, and the BYO market opportunity reviewed to make a recommendation on whether it’s the right option to pursue. This analysis will expose the risks that investors face (Bodie, Kane and Marcus, n.d.) and I shall provide recommendations to minimise such risks.

2 Literature Review

The mobile industry is growing very rapidly in this area. The use of mobile phones has made the life easier. The process of discourse has become far easier than before. Due to this reason, the telecommunication industry starts to expand and now covered it has covered a maximum market share. Thus under this section, some discussion is made in the study by reading the perspective literature to extract the information out of it.

2.1 General theories/discussion regarding pre-paid mobile and the telecom industry (Competition / Local market)

It is denoted in the study of Shrivastava (2018), that the prepaid mobile system has made the communication process easier. It allows customers to carries information everywhere by storing it on the SIM card that authorises the wide service variety. The cell carriers have provided this service. In addition to this, a customer is allowed to make its own decision whether to choose the pre-paid cell phone services or choice a post-paid plan that is a subscription plan. The competition of the mobile phone services is getting higher day by day; therefore, the demands for pre-paid mobiles services are increasing. Thus, such services have been capturing a good place in the local market. It is because pre-paid plans are easy to use and it has made the communication process far easier. Therefore, the competition in the local market has become very tough. It becomes difficult for sellers to maintain its position in the market due to some brands exist in the market offering the similar products

2.2 Industry growth/boarder growth areas (relate to theories and frameworks)

It is denoted in the study of Forge (2018) that the industry of mobile phone is constantly growing. The users of mobile phones are increasing day by day. Due to this reason, the market demand has been increased industry is growing because of the increasing number of consumers. The reason for growing industry is that the consumers have been allotted with some specific time duration to consume the allowed minutes on the Sims cards. Instead of going post-paid billing system consumers prefer pre-paid system. However, it is sharing its part regarding enhancing industry growth.

2.3 Frameworks for business valuations

According to the business valuation framework, it is analysed that the most important thing in the mobile sector is the credible use of technology. The technological factors depend on three credible sources flexible, patentable, and scalable to establish a credible market to established market, by providing services to maintain the initial customer base. Thus, makes the successful delivery in the market. This enables the mobile sectors to keep the business credible in the industry by vertical packaging, repeatable sales models, and repeatable. Hence, it elaborates healthy market dominance in the industry. However, the value is increasing constantly.

2.4 Apply theory/frameworks to the telecom industry

The telecom industry is increasing day by day; therefore, it focuses to keep the customers in working domain to make the industry prominent and useful for the customers. It is continually delivering efforts to keep the working accurate to deliver services to the customers in the telecom industry. The telecom industry is also working on the flexible, patentable, and scalable factors to deliver open and full of services market to consumers.

2.5 Apply theory/frameworks to Smart Mobile

It is denoted in the study of Beenau (2018) that technology has changed the lifestyles of people. The perception of the individuals becomes more focused towards the use of the Smart Mobile. It has limited the world to consumers in their purses or pockets. However, the use of smartphones is not possible without the use of the Sims card. Due to this fact, the sector of Mobile services is the main element of smart mobile access, and without the proper Sims process, the use of smart mobile becomes difficult if the portable hotspot or Wi-Fi devices are not found in access to use.

Risk Management

The risk management is the necessary factor that hits the business integrity. Therefore, it is highly significant to focus on the risk management. It is essential to analyse the risk at the initial stage to minimise it so it could not hit the business process. Risk management is also useful regarding satisfying the investors, so they do not hesitate to invest. Hence, some of the associated risks include

• Technological Risk
• Financial Risk
• Environmental Risk

Business Cycle

The business cycle is divided into four phases of prosperity, recession, recovery, and depression. The Smart Mobile Pty Limited cycle at earlier stage found in the depression stage and then by applying useful strategies the business comes into recovery stage where it has faced various issues. At last, they will able to maintain its growth in prosperity stage.

Performance Benchmarking

From the above-given table, it is analysed that the performance of the mobile sector is increasing year by year. What it demands is increasing day by day, and for this purpose, companies are focusing on the continuous innovation and development to maintains its position in the market.

3 Research Methodology

The system of research is typically embraced from the past investigations. The approach of this exploration papers is likewise received from the past research paper which analysed the strategy on the Smart Mobile Pty Limited. The most indispensable piece of leading exploration depends on the examination system. Leading a legitimate research system is basic for making the base of research productive and successful. In this way, the focal point of the specialist is on get-together the bona fide information. This validness is just conceivable by concentrating on the procedure system soundly. Subsequently, the whole credibility of the report depends on the strategy (Shen, 2018).

3.1 Research Method

This research method is based on the positivism and interpretivism rationality. The usages of such theories are useful in the understanding of reactions respondent in the compelling and effective way. The focal point of the creator in picking such rationalities is useful in the assurance of results on a more extensive range. The interpretivism reasoning goes under the graphical information portrayal. This empowers analysts keeping in mind the end goal to create appropriate outcome understandings of the study

Compare and contract Smart mobile with Amaysim

Case research was chosen as the methodology. A single holistic case is justified because the research presented form Smart Mobile allowed me to investigate the Telco industry with focus on the pre-paid industry and Smart Mobile to address a critical concern for Smart Mobile and its Board with a valuation range that is benchmarked to the Australian pre-paid industry and the areas of growth in the wider Telco industry.

The second justification for a single case study is that it allows me to focus on Smart Mobile and provide an independent valuation for the Board of Smart Mobile to review. My role within Smart Mobile open access to past performance data and future forecasts and with the use of theories and frameworks leaving me with a solid understanding of the future performance of the company under the current business model.

3.2 Data collection

The data will be used to evaluate the company performance within the pre-paid industry. Data disclosing the performance of Amaysim Australia Limited (Amaysim) will be collected from IBIS World (IBIS World, 2018) and the Macquarie Banks Research report (Macquarie Research, 2017). This will be assessed and compared to Smart’s performance to assist in the valuation of Smart. Qualitative data analysis will provide insights into ability if the Smart Management team to achieve the forecast numbers presented in the Information Memorandum (Aust Advisory Partners, 2017). Quantitative data analysis will be used to compare the financial performance of Smart to that of Amaysim. The approach for the analysis will be to analyses Smart and compare its performance to that of Amaysim.

4 Presentation of findings

4.1 Analysis

It is analyzed from the Smart Mobile PTY Limited NCIAL summary and Key Drivers that the total income actual for the years 2015 to 2016 and 2016 to 2017 are 17,584,703 with growth of 9% and 18,314,189 with growth rate of 4% is reordered consequently and for 2018 growth rate it has been forecast from the year 2016 to 2017 is total income 18,980,000 with growth rate of 4%.

It is analysed from the Smart Mobile PTY Limited NCIAL summary and Key Drivers that the operating profit actual for the years 2015 to 2016 and 2016 to 2017 are 7,631,947 and 8, 560781 is reordered consequently, and for 2018 growth rate it has been forecast from the year 2016 to 2017 is operating expense of 9,120,000.

It is analysed from the Smart Mobile PTY Limited NCIAL summary and Key Drivers that the NPAT for the years 2015 to 2016 and 2016 to 2017 are 4.979.117 and 5,527,738 is reordered consequently, and for 2018 growth rate it has been forecast from the year 2016 to 2017 is NPAT of 6,349,000

4.2 Reflection on Findings and Implications

It is reflected that the net operating income growth value is higher in 2016 as compared to 2017

It is reflected that the operating profit value is lower in 2016 as compared to 2017

It is reflected that the NPAT value is lower in 2016 as compared to 2017

5 Conclusion and Recommendations

5.1 Final thoughts

The prepaid business reflects 39% of aggregate portable administrations (Telesyte, 2018) which has enabled Smart to develop in income at a 37.4% aggravated yearly development rate (CAGR) (I’ll include the reference) since propelling with Optus (I’ll include the reference) in March 2013. This development rate is the figure to moderate (I’ll include the reference) inspiring the Smart Directors to connect with Vic Investment Pty Limited (Vic) to run a business procedure to welcome venture into the business to extend its items. This procedure brought about three offers, all being rejected. A moment endeavour supervised by Aust Advisory Partners (Aust) has seen additionally offers dismissed because of the Directors not adjusted on the valuation of Smart. This has anticipated new speculation which would give a chance to Smart to venture into the $2.3bn Bring Your Device advertise (BYO market) and increment its mindfulness in its appropriate statistic to youth demographics. Hence, the motivation behind this examination is to break down Smarts execution inside the Telco business to educate the Directors concerning a valuation that would be adequate to permit speculation into the business and search out item openings. An examination of the prepaid Telco industry will be directed, and the BYO advertise opportunity audited to suggest whether it’s the correct choice to seek after it or not.

5.2 Recommendation

It is recommended to keep emphasise on the innovation and creativity to deliver unique services to consumer

• To focus on the continuous development of the business activities
• To focus on increasing the technological creditability
• To focus on the implication of new project and concept to attract customers and market
• To hire analytical and skilful employees at Research and development department

References

Shrivastava, P., Sahoo, L., & Pandey, M. (2018). Recognition of Telecom Customer’s Behavior as Data Product in CRM Big Data Environment. In Proceedings of First International Conference on Smart System, Innovations and Computing(pp. 165-173). Springer, Singapore.

Forge, S., & Srivastava, L. (2018). ITU cost model and methodology to assist national regulatory authorities to engage with international mobile roaming. Digital Policy, Regulation, and Governance, (just-accepted), 00-00.

Beenau, B. W., Warren, J. U., Peart, L. J., & Saunders, P. D. (2018). U.S. Patent No. 9,866,989. Washington, DC: U.S. Patent and Trademark Office.

Shen, J., Gong, S., & Bao, W. (2018). Analysis of Network Security in Daily Life. INFORMATION AND COMPUTER SECURITY, 1(1).