because the internet is sooo slow and i couldnt download a ****ing 4 mb mp3, i have developed NERD RAAAGE and decided to write this. i toned down the vocabulary and details so that every high schooler, cup cakers , and mc chickens, mc nuggets and non-techies can understand.
Chapter 1: May the force be with
suppliers of ISPs
whether it is a internet service provider (ISP) or even a (baqalah). any company/business that is successful and growing rely on the analysis of the market they work in. the analysis shows which factors or entities are making it difficult for the business to operate or generate more profit. one of the famous tools used in analyzing the market the Porter’s 5 forces model. simply put: the tool describe 5 unique forces that challenge and affect the company’s ability to generate high or low profits, they are the buyers, suppliers, existing rivals, new competition and substitutes. so what are the forces of the kuwaiti ISP company?
Buyers: typically ISP sell internet services to people and businesses, typically the business packages provide constant high speed and large bandwidth and cost a lot more that the subscriptions to people. ISP provide internet services to people according to a package of speed the individual wishes to have. it is important to know that the internet cap limit that we experience right now is applicable only to the internet services offered to the people (also known as commercial)
Suppliers: in the case of Kuwait specifically the ministry of information (MOI) is the supplier of the internet to the ISP, this is the reason why the government in involved in this whole issue. in order to make profit the ISPs buy the services from the MOI at a cost and sell at ta price so that price – cost = profit. the ISP are arguing that because (1) the cost of buying the internet from the MOI is very costly and that (2) ‘abusers’ of the bandwidth are adding more operation cost resulting in (1)+(2) less profits.
Existing Competition: this refers to the pressure from the other ISPs are doing to the ISP in mention. this force or pressure comes from the price competition and marketing done between themselves. in the case of kuwait, ALL the ISPs have agreed to apply the cap and formed what is known as an oligopoly (not to be confused with monopoly). Although each ISP is offering different prices to the market it is clear that they are colluding with each other and therefore are possibly liable to persecution under the commercial law .
New Competition: this force is about the effect on profit by new companies entering the market, in our case new ISPs entering kuwait. it is reasonably safe to say that the market if internet providers is full and that any new company wishing to enter the market will have a very tough time competing with already 7 ISPs in kuwait. however what interesting news to point out is the statement mentioned by the MOI:
this could be a warning to the current ISP by the MOI to let them know that this force is still applicable here.
Substitutes: this refers to the force of having alternative substitute to what the company is offering. unfortunately there is no substitute to the internet.
so for a typical ISP operating in kuwait this is how the five forces look like:
conclusion: A blame game is being played between the ISPs and the government, the government is claiming that the ISPs service prices are high and for that are allowing further entries to the market. meanwhile the ISPs are saying we are highly pricing our services because the government is supplying the service at a high cost. i dont have figures of the cost with me so i cannot make pass judgment here. As for the matter of the 5 forces analysis, in order to create a strong buyer force that will influence and, if necessary, damage the ISPs in kuwait we have to first gather mass and grow in numbers. this is why we are united in this campaign and that why we need you to join. Even a mere 200 list of people can make a good dent on those giant ISPs.
disclaimer: this analysis is of my humble own interpretation and reasoning. if you find error in it by all means comments here are open and unrestricted.