Formulating Business Strategy and Innovative Business Model of Mobile Broadband Services through TOWS Matrix and Cross- Industry Innovation

Abstract

Indonesia is a large and promising market for mobile telecommunication service. However, the increment of smartphonenumber and the change of communication way bring significant impact to Telco operator because revenue and traffic move indifferent or diverging directions. The situation is getting worst due to over the top (OTT) applications. All of these factorscaused ARPU (Average Revenue per User) decrement.PT XYZ, as a mobile Telco operator in Indonesia, also experiences this ARPU decrement. The condition is getting worse sinceaggressive offerings from competitor in residential broadband service which had been eroding its revenue growth. Anotherproblem is related with low data user penetration.The research uses conceptual framework which uses several step andtools, such as External Environment Analysis (PESTELand Porter’s Five Forces Analysis), Internal Environment Analysis (VRIO and Value Chain Analysis), Strategy Formulation(SPACE Matrix and TOWS Matrix Analysis) and Redefining BusinessModel (Cross Industry Innovation and Business ModelCanvas).The researcher recommends that the appropriate business strategy to solve the business problems is launching new mobilebroadband product. Decreasing ARPU could be solved because the newbroadband product has higher ARPU than currentproducts. It also can compete with other competitors for residential market in order to prevent eroding its revenuegrowth. At the end, this strategy will solve the business problemrelated with low data user penetration. The researcher hasdeveloped the business model for residential mobile broadband product which has several value propositions