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CHAPTER 1 INTRODUCTION OF STUDY
1.1 BACKGROUND OF STUDY As part of the academic requirement for completing the program of Master of Business Administration, students are required to under go two months of internship with an organization. The selection of the organization is based on the choice of the student. The institute then requires an internship report based on practical learning of the student through that period of time. This report is about Mobilink GSM (PMCL), a subsidiary of Orascom Telecom, started its operations in 1994, and has become the market leader both in terms of growth as well as having the largest customer subscriber base in Pakistan - a base of over 30 million and growing
1.2 PURPOSE OF STUDY
a) The main purpose of the study is to gather relevant information to compile internship report on Mobilink GSM (PMCL) Regional office North-2 and as a whole network of Mobilink. b) Another purpose of this Internship program is to learn and use the management techniques acquired during the course, and find out the possible solution of management problems faced by the organization. c) To observe, analyze and interpret the relevant data in a useful manner. d) To work practically in an organization and to develop interpersonal communication.
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1.3 SCOPE OF STUDY
As an internee my association with this company was being a part of the Sales Operations Department. It was a great experience for me and it helped me in realizing where my potential lies. What I learnt at Mobilink over the weeks was how to get along with the people that I have to work with everyday, building confidence and improving my skills. This internship has also prepared me for my future career in Sales, Finance and Customer Relations so this internship has helped me a great deal. The experience has taught me responsibility, teamwork and how to handle problems occurring. Even though the nature of work was quite basic as an internee, nevertheless I got to see what practical life is. This internship overall has been a great experience. This report gives a profile of Mobilink and an insight into the Sales Operation department where I was assigned to work. This report also reflects my learning and experiences at Mobilink along with my responsibilities and the tasks that I performed. Last part of the report consists of some recommendations and suggestions that I have given.
1.4 LIMITATIONS OF STUDY
No matter how efficiently a study is conducted, it cannot be perfect in all respects. This study was conducted in accordance with the objectives of the report completion. The study may not include broad explanations of facts and figures due to the nature of the research. One of the major limitations while carrying out this research was the lack of cooperation on the part of the management of Mobilink in providing the data regarding the company and its policies. Secondly, the limitation which affects the study is the restriction on mentioning every fact of the company due to the problem of secrecy. In addition, the availability of
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Internship Report required data was a problem as access to all the documents and files are limited to the employees only. Finally, the problem of short time period also makes the analysis restricted as one cannot properly understand and thus analyze all the operations of any company in a very short time of eight weeks.
1.5 RESEARCH METHODOLOGY
The methodology reported for collection of data is primary as well as secondary data. Sources of my Primary data are Personal Observation and Interviews of Personnel. And sources of my Secondary data are; previous internship reports, annual reports of the organization, books, journals and Internet.
1.6 SCHEME OF STUDY
The report is arranged in the following sequence:
PART I This is the introductory part of the report and has one chapter. Chapter 1: This is an introductory chapter which describes the background, purpose, scope, methodology and scheme of the report. Different limitations faced in preparing the report are also discussed. PART II This Part includes the review of Mobilink GSM (PMCL), a subsidiary of Orascom Telecom. This Part is comprised of two chapters. Chapter 2:
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Internship Report This chapter covers a historical background and development of Telecom sector in Pakistan. It also tells about the Pakistan Telecom Laws and the role of Telecom sector in economic development of Pakistan. Management structure of Mobilink, different services offered by Mobilink and departmentalization is discussed. Chapter 3: This is a detail chapter about my internship at Mobilink GSM, An Orascom Telecom. In this chapter I have given a brief introduction about North-2 region. I have focused on introduction of North-2, different franchises operating in the area, and services offered at regional office are discussed in detail in this chapter.
PART III This Part is about the analysis of Mobilink GSM, An Orascom Telecom and has one chapter. Chapter 4: In this chapter I have done SWOT and Financial analysis of Mobilink GSM, An Orascom Telecom. I have explained Strengths, Weaknesses, Opportunities and Threats for Mobilink. I have carried out environmental analysis of Mobilink with the help of industry & market, competitors and technology
PART IV This is the final and conclusive part of the report and contains one chapter. Chapter 5: This is the last chapter of the report. I have mentioned different problems faced by Mobilink GSM, An Orascom Telecom. After pointing out these problems I have given some general recommendations.
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INTRODUCTION OF MOBILINK, AN ORASCOM TELECOM 2.1 PAKISTAN TELECOM LAWS
At the time of independence the laws in force in Pakistan relating to Telecommunication were “The Telegraph Act, 1885 (XIII of 1885)” and “The Wireless Telegraphy Act, 1933 (VII of 1933)”. These were extended and adapted in Pakistan through “The Adaptation of Central Acts and Ordinances Order, 1949″ (G.G.O. No. 4 of 1949) and Central Laws (Statute Reforms) Ordinance 1960 (XXI of 1960). The Act of 1885 was the primary governing telecommunication statute. There was a joint Director General of Posts, Telegraph & Telephone under the Act of 1885. The Act granted exclusive privilege to Government (Posts, Telegraph & Telephone [PTT] Department to establish, maintain, working, licencing, regulating the Telegraph within or any part of Pakistan. The government was the governing and controlling authority of telecom sector in Pakistan. Likewise, The Wireless Telegraphy Act was enacted in order to regulate the possession of wireless telegraph apparatus. In 1962 Posts and Telegraph (Amendment) Act, 1962 (V of 1962) was enacted which amended Telegraph Act, 1885, The Post Office Act, 1898 and The Wireless Telegraphy Act, 1933. The purpose of the Amending Act was to split up the Postal Department and the Telegraph and Telephone Department. The PTT Department
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Internship Report slumbered for about 30 years with no active, substantial and innovative development in telecom sector. The arena of development, innovation and liberalization starts from 1990-1991. By 1991 the scenario changes, The Pakistan Telecommunication Corporation Act, 1991 (Act XVIII of 1991) was promulgated which created the independent statutory corporation named “Pakistan Telecommunication Corporation (PTC)” and Telegraph & Telephone Department was merged into PTC. The Corporation with perpetual succession took over all the assets and liabilities of the PTT Department. In pursuance to government competitive and liberalization policy in relation to telecom opened field to private sector and PTC started out-sourcing few of its services i.e card payphones services and pre paid calling card operations to private companies. Although in the Act of 1991 there was no regulator in its true sense but attributes of regulator, to some extent, were existent in PTC. The PTC was responsible in the field of telecommunication for development, research, improvement in quality, advice to government and determination of tariff subject to approval of government, maintain liaison with foreign government and other obligations as any regulator performs. In 1994 in order to further liberalize and open the telecom industry and to transfer the telecommunication services to private sector and the matters connected thereto the Presidential Ordinance “Telecommunication Ordinance, 1994 (Ordinance LI of 1994)” was promulgated on 13th July 1994. To promote, maintain fair competition and regulate the telecom industry and telecom services the regulatory bodies “The Pakistan Telecommunication Authority (PTA)”, “Frequency Allocation Board (FAB) and “National Telecommunication Corporation (NTC)” were established. The independent regulator (PTA) was established for the first time in the history of telecommunication field in Pakistan under the 1994 Ordinance. The Ordinance also caused the federal government to incorporate the “Pakistan Telecommunication Company Limited (PTCL)” under the company ordinance, 1984 which replaced the
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Internship Report PTC. The Company was provided the exclusivity to provide the basic telephone services in Pakistan for a period of seven years. The Ordinance of 1994 repealed The Telegraph Act, 1885 (XIII of 1885) and certain sections of Pakistan Telecommunication Corporation Act, 1991. The 1994 Ordinance was to face its constitutional death upon expiry of four month as declared in Article 89 of the Constitution of Islamic Republic of Pakistan 1973, therefore, before its constitutional expiry life was given to it afresh through another Presidential Ordinance No. LXXVII of 1994 dated 7th November 1994. This Presidential Legislation under Article 89 of the Constitution continued until the Ordinance was presented in the Parliament. The Presidential Ordinances are Ordinances Nos. (XXIII of 1995 dated 7th March, 1995), (LXIII of 1995 dated 5th July, 1995), (CIII of 1995 dated 30th October, 1995) and Pakistan Telecommunication (ReOrganization) Ordinance, 1995 (CXV of 1995) dated 27th November, 1995. (XXX of 1996 dated 7th March, 1996) and Ordinance No. LXXVII of 1996 dated 4th July, 1996. Every subsequent ordinance repealed the previous one. Finally the “Pakistan Telecommunication (Re-organization) Act, 1996 (XVII of 1996)” was passed on 17th October 1996. Some of the salient features of the Act of 1996 are: •Creation of Regulator • Regulation of Telecommunication Industry and Services • Transfer of telecommunication regime to private sector • Powers of Federal Government to Issue Policy Directives • Licensing • Establishment of PTCL as Company under the Companies Ordinance, 1984
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Internship Report • Creation of National Telecommunication Corporation (NTC) to provide telecom services to armed forces, defence projects, federal government, provincial governments and local authorities etc. • Formation of Frequency Allocation Board (FAB) with the responsibility of allotment and management of frequency spectrum. The FAB replaced the Pakistan Wireless Board established under “The Wireless Telegraphy Act, 1933″ and took over the function of the Wireless Board. • Creation of Pakistan Telecommunication Employees Trust with the object of to take care of the interests of the employees of the Company. 2.1.1 Deregulation Policy 2003 Section 8 of the Act of 1996 empowers the federal government to issue policy directives and PTA is under obligation to adhere and comply with the directives. Deregulation implies the removal of control of the government. It also implies the liberalization of the telecom market. The exclusivity of Pakistan Telecommunication Company Limited (PTCL) to provide basic telephone services under the Act of 1996 expired on 31st December 2002. In July 2003 the Government of Pakistan (GoP) announced “Deregulation Policy for the Telecommunication Sector”. The Policy sets out the following objectives : • To increase service choice for customers of telecommunication services at competitive and affordable rates; • To promote infrastructure development, especially infrastructure that will increase teledensity and the spread of telecommunication services in all market segments. • To increase private investment in private sector. • To encourage local telecom manufacturing/service industry. • Recognizing the challenge to incumbent, PTCL. Mobilink GSM, An Orascom Telecom Company 8
Internship Report • Accelerate expansion of telecom infrastructure to extend services to un-served and under-served areas. • Liberalize the telecommunication sector by encouraging fair competition amongst service provider. • Maintain and effective well defined regulatory regime that is consistent with best international practice. • Maintain consistency with Pakistan’s IT and Interconnect promotion policy of low prices for bandwidth to make internet access affordable. • Safeguard Pakistan’s national and security interest. 2.1.2 Mobile Cellular Policy 2004 GoP has announced it Cellular Policy. The policy objectives are: • Promotion of efficient use of radio spectrum; • Increased choice for customers of cellular mobile services at competitive and affordable price; • Private investment in the cellular mobile sector; • Recognition of the rights and obligations of mobile cellular operators; • Fair competition amongst mobile and fixed line operators; • An effective and well defined regulatory regime that is consistent with international best practices; In pursuance and compliance of the Cellular Policy, the Regulator has issued licenses to the foreign companies. 2.1.3 Subordinate Legislations The Act of 1996 sets and provides the broad framework, principles, authority and functions of the Regulator etc. The Act is silent about how the various telecom services, tariffs, interconnection guidelines and disputes arising therefrom, role and Mobilink GSM, An Orascom Telecom Company 9
Internship Report responsibilities of incumbent, accounting standards, reporting and problems faced by the companies inter are to be regulated and controlled? To meet the various situations, to control and regulate the services offered by the telecom companies and to create the fair competition environment, the rules and regulations have been framed by the Government and the Regulator. The various Rules, Regulations and Guidelines are: i. Telecommunication Rules 2000 The Rules have been framed under Section 57 of the Pakistan Telecommunication (Re-Organization) Act, 1996. The Rules provides for the procedure of licencing procedure, its duration, renewal, modification, transfer, assignment or transfer and termination. The Rules further provide the Interconnection procedure, basis terms and conditions of Interconnection Agreement, Procedure in case of failure to agree and arrive at Interconnection Agreement, Interconnection Charges, and dispute resolution mechanism. The Rules also narrates the quality of services, exchange of information between the two operators, Tariff etc. ii. Access Promotion Contribution Rules 2004: Means the contribution made by Long Distance International (LDI) operator/licencee to Local Loop (LL) operator/licencee or Universal Service Fund (USF) created and maintained by Federal Government. USF has been established for providing access to telecom services to people living in un-served, underserved, rural and remote areas etc. iii. Card Payphone Service Regulations 2004: These have been issued by PTA under Section 5 (2) (O) of the Act of 1996. The Regulations deal with terms and condition of the licence, its modification, renewal and termination, monitoring procedure, accounting & auditing, Inspection by PTA, responsibilities, assignment, complaint systems, code of commercial practices, relationship with customers by the payphone operators and with other operators etc. Mobilink GSM, An Orascom Telecom Company 10
Internship Report iv. Interconnection Dispute Resolution Regulations 2004: The Regulations provide the comprehensive procedure of dispute resolutions between the operators . v. Other Regulations and Guidelines: The Pakistan Telecommunication Authority has framed and issued certain other regulations and guidelines. These are: • Fixed Line Tariff Regulations 2004 • Vehicles Tracking Services Regulation 2004 • Burglar Alarm Services Regulations 2004 • Amateur Radio Services Regulations 2004 • Audio-tex Service Regulations 2004 • Non-voice Communication Network Service Regulations 2004 • Registration of Satellite Service Provider Regulations 2004 • Trunk Radio Services Regulations 2004 • Interconnection Guidelines 2004 • Access Promotion Regulation 2005 • Number Allocation and Administration Regulation 2005 • Mobile Number Portability Regulations 2005
2.2 TELECOM SECTOR OF PAKISTAN
The telecom sector of Pakistan has seen phenomenal growth over the past few years. According to the Pakistan Telecommunication Authority (PTA), the total mobile phone subscribers in 2007 were more than 63 million, a growth of more than 80% Mobilink GSM, An Orascom Telecom Company 11
Internship Report from the previous years. During 2006-07, the mobile sector generated Rs 133 billion in revenues, an increase of 48% from the previous years and contributed Rs 63 billion to the national exchequer in terms of taxes and regulatory fees. The telecom sector contributed 2% to the GDP in 2005-06 and received more than $1.8 billion in foreign direct investment (FDI) in 2006-07 , which is 35.6% of the total FDI in that period. Furthermore, the telecom sector has also created over one million in jobs, since its deregulation, making Pakistan one of the world’s fastest growing telecom markets. The Pakistan Telecommunication Ordinance 1994 established the primary regulatory framework for the telecommunication industry including the establishment of an authority. Thereafter, Telecommunication (Re-Organization) Act no XVII was promulgated in 1996 that aimed to reorganize the telecom sector of Pakistan. Under Telecom Reorganization Act 1996, Pakistan Telecommunication Authority (PTA) was established in January 1997 to regulate the establishment, operation and maintenance of telecommunication systems, and the provision of telecom services. The telecom sector was deregulated in 2003. Currently there are six mobile operators operating in Pakistan, which include Mobilink, Ufone, Telenor, Warid, Zong and Instaphone. Mobilink started its operations in 1994 as the first GSM cellular mobile service in Pakistan, started by Motorola Inc. Later it was sold to Orascom, an Egypt-based multi-national company. Mobilink is the largest cellular service provider in Pakistan. Another company, Pakistan Telecommunication Mobile Limited (PTML) is a wholly owned subsidiary of PTCL, established to operate cellular telephony. The company commenced its operations, under the brand name of Ufone from Islamabad on January 29 2001. Later, as a consequence of PTCL’s privatization, 26% of its shares were acquired by Emirates Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone had also been handed over to Etisalat. Telenor Pakistan is 100% owned by Telenor ASA and adds on to its operations in Asia. Telenor Pakistan launched its operations in March 2005 as the single largest Mobilink GSM, An Orascom Telecom Company 12
Internship Report direct European investment in Pakistan, setting precedence for further foreign investments in the telecom sector. In 2004, Warid Telecom International LLC, purchased a license for operating a nationwide mobile telephony network, (WLL) and long distance international (LDI) for $291 million US dollars and was the first venture of Warid Telecom International LLC. Warid Pakistan launched its services in May 2005. On June 30th, 2007, Singapore Telecommunications Limited (SingTel) and Warid Telecom announced that they had entered into a definitive agreement subsequent to which SingTel will acquire a 30% equity stake in Warid Telecom for an estimated $758 million. China Mobile Pakistan (CMPak) is a 100% subsidiary of China Mobile. The pioneering overseas set up of China Mobile came through acquisition of a license from Millicom to operate a GSM network in Pakistan. Millicom had initially bought Paktel in 2003 from Cable & Wireless. Paktel was the first ever company granted license to carry out cellular phone services in Pakistan. Currently CMPak is operating in Pakistan under the brand name of Zong. Instaphone is another telecommunication company in Pakistan. Instaphone was one of the pioneers of cellular industry in Pakistan. Initially the company was owned by Millicom International; later on Arfeen Group acquired it. Currently, the license of Instaphone has been terminated due to non payment of license fee to PTA. The company under a renewed license is planning to role out a countrywide CDMA mobile network and would be the only CDMA mobile operator in Pakistan to launch first 3G services in Pakistan.
2.3 MOBILINK (PMCL), AN ORASCOM TELECOM
Pakistan Mobile Communications Limited (PMCL) operates the leading GSM network in Pakistan and provides a range of prepaid and postpaid voice and data telecommunication services to both individual and corporate subscribers, under the brand name “Mobilink.” Mobilink launched its operations in August 1994 after it was founded in 1990 as a joint venture between Motorola and the Saif Group and awarded a license for mobile telecommunication system and services in July 1992. Later on in Mobilink GSM, An Orascom Telecom Company 13
Internship Report April 2000, Orascom Telecom bought 38.6% stake in PMCL, which it later in February 2001 increased to 68.69% by purchasing Motorola’s share in PMCL and becoming the major shareholder of the company. In April 2001, Orascom Telecom took over management control of the company. As of December 31st, 2007, Orascom Telecom indirectly owns 100% of the share capital of Mobilink through direct stakes held by wholly owned subsidiaries of OTH. By December 2007, Mobilink had achieved 39.8% in market share, making it the market leader in the mobile sector of Pakistan2 and had a customer base of more than 32 million by July 2008. Mobilink offers exclusively designed tariff plans that cater to the communication needs of a diverse group of people, from individuals to businessmen to corporate and multinationals. To achieve this objective, Mobilink offer both postpaid (Indigo) and prepaid (JAZZ) solutions to their customers. Mobilink was also the first cellular service provider to operate on a 100% digital GSM technology in Pakistan and also provides state-of-the-art communication solutions to its customers. Mobilink’s network is the most extensive in Pakistan, connecting more than 9000 cities across Pakistan, as well as over 120 countries on international roaming service. Furthermore it reaches over 66% of the total population and 99% of the urban population as of December 31st, 2007. Mobilink is also developing its own optic fiber backbone, to provide its customers with highest level of voice and data quality with more reliability4 and has invested more than $2.5 billion in its networks. 2.3.1 Mobilink Vision To be the leading Telecommunication Services Provider in Pakistan by offering innovative Communication solutions for our Customers while exceeding Shareholder value & Employee Expectations. 2.3.2 Mobilink’s Values
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Internship Report 220.127.116.11 Total Customer Satisfaction Customers are at the heart of our success. They have placed their trust and confidence in us. In return, we strive to anticipate their needs and deliver service, quality and value beyond their expectations. 18.104.22.168 Business Excellence We strive for excellence in all that we do. We aspire to the highest standards and raise the bar for ourselves everyday. This commitment to delivering world-class quality translates into unmatched service and value for our customers and all stakeholders.
22.214.171.124 Trust & Integrity At Mobilink, we take pride in practicing the highest ethical standards in an open and honest environment, and by honoring our commitments. We take personal responsibility for our actions, and treat everyone fairly, and with trust and respect. 126.96.36.199 Respect for People At Our relationships drive our business. We respect and esteem our employees and all stakeholders. We believe in teamwork, empowerment and honor. 188.8.131.52 Corporate Social Responsibilty As the market leader, we recognize and fulfill our responsibility towards our country and the environment we operate in. We contribute to worthy causes and are dedicated to the development and progress of the society. 2.3.3 Mobilink Operation Analysis Mobilink GSM, An Orascom Telecom Company 15
Internship Report 184.108.40.206 Network Mobilink was awarded a 15-year license in July 1992 to establish and operate a digital cellular telecommunication system using the GSM 900 standard and to offer telecommunication services in Pakistan. Before that, all previous operations were using the AMPS technology. Since then Mobilink has been growing its network, providing 2G, 2.5G, GPRS and EDGE compatibility. Mobilink was the first operator to start rolling out the Enhanced Data Rates for Global Evolution (”EDGE”) in Pakistan. In addition, Mobilink also launched its BlackBerry service in December 2005 through its GPRS platform. Furthermore, Mobilink’s license was renewed on July 6th, 2007 for a further period of 15 years. Mobilink is committed in providing the best network to their customers, which in recent times has expanded to more than 9000 cities and reaches over 66% of the total population and 99% of the urban population as of December 31st, 2007. Table 2.1: An Overview of Mobilink’s Network
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Internship Report Not only is Mobilink’s network very modern and technologically advance, but it is also very competitive, when compared to other mobile networks. Table 2.2: Comparative Figures of Coverage & Cell Sites
220.127.116.11 Operational Departments Mobilink was headed by President and CEO Zouhair A. Khaliq, who reports directly to the Chairman and CEO of Orascom Telecom Naguib Sawiris. Furthermore the
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Internship Report operations of Mobilink are divided into eight different departments, which are as follows: 1. Human Resource 2. Administration and Security 3. Sales 4. Marketing 5. Customer Services 6. Corporate Affairs 7. Technical 8. Finance Furthermore, these departments are further divided into sub departments to ease operations within Mobilink. Also all major decisions are taken centrally, in Islamabad. These decisions for example include, the financing required by Mobilink (local and foreign), decisions regarding import of goods etc. Furthermore, to assist the operations of Mobilink, which include more than 500 franchises and 16 Customer Services Center’s, operational departments are located in all the four main regions: 1. North 2. South 3. Central 4. AJK 18.104.22.168 Subscribers & Market Share
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Internship Report Mobilink had a great advantage for years as being the only GSM mobile operator in Pakistan, however with the entrance of Ufone in 2001 and later on by Telenor, Warid and Zong, the competition in the mobile sector is heating up. However the subscriber base Mobilink has remained steady and growing as seen in the table below: Table 2.3: C Number of Mobilink Subscribers from 2005-July 2008
Although the number of subscribers has increased over the years, the same cannot be said about the market share of Mobilink, which has gradually decreased over the year. However, although the market shares of Mobilink might have decreased over the years, but it still remains the market leader in the mobile sector. The market shares of Mobilink are as follows: Table 2.4: Market Shares of Mobilink from 2005-2007
2.3.4 Products Mobilink offers both Pre-paid and Post-paid services. They offer tariff plans that are exclusively designed to cater to the communication needs of a diverse group of people, taking into account occasional users to businessmen. To achieve this objective, they offer both postpaid (Indigo) and the prepaid (JAZZ) services to their customers. Jazz is an amazing prepaid service that allows freedom from monthly bills and gives complete control over the customer’s cellular expenditure. The user can decide in Mobilink GSM, An Orascom Telecom Company 19
Internship Report advance when and how much he wants to spend. He can load a scratch card whenever he wants to and start talking. Jazz is simple, easy and loads of fun. In addition to providing advanced voice communication services, they also offer a number of value added services to their valued subscribers. Indigo is positioned on family platform, offering a wide range of products catering to different needs. It comprises of a range of packages depending upon the usage levels such as indigo initial and indigo 400 supplementary packages combine postpaid life style with economical rates. Call and Control is a hybrid product that offers prepaid convenience and postpaid control and is suited for high-end prepaid users. 2.3.5 Value Added Services • • • • • • • • • • • GPRS Mobilink Mustt Services SMS Messaging Power Tools Chat Services Dedication Services Power Tools Mail Services Info Services IVR Ring tones/Logos On Call Services
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Internship Report • Missed Call Alerts
2.3.6 Sales Strategy Mobilink is the first cellular operator to introduce the “franchise “concept in the cellular industry in Pakistan and currently operates the largest franchise network in Pakistan with over 250 franchises/national distributors (dealers operated service centers). In order to extend its reach even further, Mobilink worked with its franchisees to develop a network of over 500 sub dealers, these operate as point of sales (POS) and are branded “Mobilink Connect”. Each franchisee is adequately equipped to process sales, collect bills and offer customer services. All franchises have trained sales and service staff fully capable of tackling sales challenges. 2.3.7 Core Competence People at Mobilink believe that their Research & development department is its core competence along with their workforce i.e. their employees. Mobilink is basically a customer-oriented company and it always comes up with new features and products. It surveys the markets and modifies its products according to the requirements and preferences of its customers. Mobilink has relatively rapid product development processes that allow for timely updating and release of new products. It was the first cellular company in Pakistan, which started working on 100% GSM technology. At the end of the year 2007, Mobilink crossed its target of reaching up to 20 million customers. At this achievement, all the employees at Mobilink got a month’s salary as bonus in January 2008.
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CHAPTER 3 REVIEW OF MOBILINK REGIONAL OFFICE NORTH-2
3.1 MOBILINK NORTH-2
North-2 region covers most parts of NWFP. Regional office is situated in Peshawar. Previously their office was in Tehkal, adjacent to KFC but now it is shifted to University Road adjacent to Shiraz Gathering.
3.2 OPERARTIONAL DEPARTMENTS
Mobilink North-2 office was headed by Regional Commercial Director Sales Mr. Aamir Aman Khan, who reports directly to the Vice President Sales Mr. Irfan Akram. Furthermore the operations of Mobilink are divided into eight different departments, which are as follows: 1. Administration and Security 2. Sales 3. Finance 4. Customer Services 5. Corporate Affairs 6. Marketing 7. Technical 8. Credit & Collection Furthermore, these departments are further divided into sub departments to ease operations within Mobilink. Also all major decisions are taken centrally, in Mobilink GSM, An Orascom Telecom Company 22
Internship Report Islamabad. These decisions for example include, the sales target, new markets, the financing required by Mobilink etc.
3.3 AREA OF MY WORK AND EXPERIENCE
During my eight weeks of internship I performed many duties which added to my experience and learning. All the tasks that I executed gave me a sense of responsibility. Sometimes there was too much responsibility on me, too much burden was there. At times things were slow, yet I wanted to work more. I did my 8 weeks internship at the sales operation section of the sales department of Mobilink. The sales operation section is one of the three sections of the sales department. The other departments are Direct Sales & Indirect Sales. Direct sales deals with postpaid connections and Mobilink PCOs and sell them directly to the customers. Indirect sales deals with the sales of prepaid connections, scratch cards and jazz load through franchises Sales operations keeps record of all sales related issues such as targets, target achievement, daily sales report and also act as a bridge between franchise and all other departments of Regional Office. 3.3.1 Sales Department Hierarchy
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RCD Mr. Aamir Aman
RM Operations Mr. Ali hasan Saeed
RM Indirect Sales Mr. Jamil Khan
RM Direct Sales Mr. Riaz Khan
Coordinator Mutahar Ahmad Coordinator Rammina rabbani
ZSMs of Six Zones
Table 3.1: Structure of Mobilink Sales Department 3.3.2 Division of North-2 Zone The North-2 Region was divided into eight zones. Each zone was headed by Zonal Sales Manager having one coordinator to assist him. Total number of franchises in North-2 is fifty six. Zone-1 covers eight franchises of Peshawar City Side; Zone-2 covers seven franchises of the areas near Peshawar such as Charsadda, Pabbi, Nowshera, Lakki Marwat, Momand Agency; Zone-3 covers eight franchises of Kohat Zone; Zone-4 covers eight franchises of DIKhan and Bannu Region; Zone-5 covers five franchises of Peshawar Cantt, Town and Hayatabad; Zone-6 covers eight franchises of Mardan Region; Zone-7 covers nine franchises of Swat Region; and Zone-8 covers four franchises of Gilgit Region. 3.3.3 My Duties and Responsibilities Sales operations department was headed by Regional Manager Mr. Ali Hassan Saeed and I was reporting directly to him. During the eight weeks of my internship I was given different projects and responsibilities. Some routine duties are as follows • Daily Scratch Card Requisition of all North-2 Franchises
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Internship Report • • • • • • Daily Jazz Load Requisition of all North-2Franchises Daily CD’s Requisition of all North-2 Franchises Daily PCO Requisition of all North-2 Franchises Replacement of Jazz Load Sims (Valista Sims) CDTM Entries Analysis & Reporting of all the Requisitions & Products of Mobilink i.e. Scratch Cards, jazz Connections, Jazz Load and Jazz Load Sims
Apart from these routine duties I was given two projects; First project was to collect the details of the customers having more than 10 numbers against one NIC number and send that detail of such numbers to Lahore office to change their ownership in the name of person using that number. Their were over 0.7 million numbers that needed change of ownership in one month and I had to meet the deadline which I did. Second project was to collect the data of all the shops in Peshawar City Area (Name of shop, owner name, location etc.). For this project I was assisting the Coordinator Sales Peshawar Zone Mr. Mohsin Iqbal. It took us about 15/20 days to collect all the data needed.
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CHAPTER 4 ANALYSIS OF MOBILINK (PMCL)
4.1 SWOT ANALYSIS
4.1.1 Introduction Overall evaluation of a company’s strengths, weaknesses, opportunities and threats is called SWOT analysis. SWOT analysis provides a good overview of whether a firm’s business is fundamentally healthy or not. Proper understanding of SWOT analysis is essential for good strategy making. SWOT analysis is one of the most important steps in formulating strategy using the organization mission as a context; managers assess internal strengths, distinctive competencies and weakness and external opportunities and threats. The goal is then to develop good strategies and exploit opportunities and strengths neutralize threats and avoid weaknesses with an overall organizational goal to increase the wealth and value of the organization.
Franchise of Orascom, a well Known Egyptian telecom company is considered very strong and reliable. Being the oldest international telecom company, Mobilink has captured most of the potential customers by penetrating in the early stages of market development.(Now 28million)
Covering over 10,000 cities, towns and villages across the Pakistan.
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Internship Report • First operator to introduce IR for the people of Pakistan. Currently our network covers more then 100 countries across the globe with over 300 roaming partners. • • • • Human resources are considered as the asset of the organization. Marketing strategies of Mobilink are more effective and more captivating than any of its competitors present in Pakistan. Ventures with well-known banks like MCB, Citibank for Mobilink banking etc. A very strong brand image
• • •
Instead of all its strength still considered to be the most expensive telecom company both in call rates and SMS as compared to the its competitors. Engineering department of Mobilink is not that well competent as compared to its new competitors. With first expending customer based customer care facilities need to be expended simultaneously for customer retention along side switch capacity networks coverage.
Potential opportunity is there as telecommunication has become the need of people all around the world. The fourth expend its networks in the areas where other network have been unable to reach. To bring in more innovative services like Mobilink PCO, Mobile banking lost /stolen phone information etc. this can be done by hiring fresh and competitive staff. Services in the future can be
Mobilink GSM, An Orascom Telecom Company 27
Internship Report o Fixed Line Telephone o Wireless o Calling Cards
Biggest threats are the new competitors like Telenor who recently entered in telecom market of Pakistan. Employees retention is also issue of concern for Mobilink as most of the employees get attracted by the more handsome salary paid by recently happenings multi-nationals Loss of loyal customer can be one of the issues as they are moving toward the less expenses package of competitors.
Ufone Telenor Warid Paktel
PTCL Calling Cards Wireless
4.2 FINANCIAL ANALYSIS
No company can remain in business if it cannot sustain and grow its profits and telecom companies are no exemption. If Mobilink wants to remain the market leader in the mobile industry and wants to satisfy its customers, it itself needs to remain a profitable company. Mobilink is a private limited company and due to this reason, its financial statements are not made public. However it does provide its financial information to different financial institutions and companies that have invested in Mobilink GSM, An Orascom Telecom Company 28
Internship Report Mobilink, examples include companies that have bought TFC’s issued by Mobilink. An extract of the Balance Sheet and Income Statement for the year 2007, can be seen in the appendix.
4.2.1 Operational Results
Table 4.1: Profit Comparison between 2007 & 2006
As major portion of Mobilink is on prepaid basis, including SIM sales, securities and balance recharges the revenues for Mobilink have increased from December 2006 to December 2007, this increase is because of the large increase in the consumer base of Mobilink in 2007. The increase in revenue has led to an increase in the profit before interest and tax, and although the costs of services and selling and administrative charges in 2007 have increased from the past year, the increased revenue helped in off setting the increase in the expenses. Another problem in the profit and loss statement of Mobilink is the increased financial charges or interest charges for the 2007. In the mid of 2006, Mobilink issued a TFC more than Rs 3 billion, and the interest of which is paid semi annually. Furthermore, most of Mobilink’s growth is financed through long term loans, which have also increased in 2007, increased the financial charges.
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Internship Report The increase in financial charges and provision of taxes in 2007, ultimately lead to profit after taxation, which when compared to the profit of 2006, to not increase by much. The increase is only 1.25% from the previous year.
4.2.2 Balance Sheet Results
Table 4.2: Balance Sheet Comparison between 2007 & 2006
As the above table shows, there has been a significant increase in the fixed assets of Mobilink in 2007; this has been due to the increase in the property, plant and equipment, long term deposits and other receivables and license fee. However, the current assets have decreased, but not by much. This small decrease is mainly due to the decrease in stocks in trade. The current liabilities have also increased in 2007, again by not by much. This increase in current liabilities is associated with the increase in short term financing and the current portion of long term financing. The increase in shareholders equity is associated with the increase in the shareholders equity and the increase in the accumulated profits, while the increase in the long term
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Internship Report liabilities is associated with the large increase in long term financing and the license fee payable, which was made due, to the renewal of Mobilink’s license.
4.2.3 Ratio Analysis 22.214.171.124 Current Ratio
Table 4.3: Current Ratio Comparison between 2006 & 2007
Current ratio is a liquidity ratio that measures how easily a company can pay off its current liabilities using its current assets. For Mobilink although most of its revenues are on a prepaid basis but still the current assets fall short to pay off the current liabilities in both 2006 and 2007. Furthermore the current ratio has fallen in 2007, which again shows that there aren’t enough liquid assets to pay off the current liabilities and may affect Mobilink’s solvency in the short term.
126.96.36.199 Fixed Assets Turnover
Table 4.4: Fixed Assets Turnover Comparison between 2006 & 2007
Fixed Asset Turnover, an asset management ratio, shows how effectively a company uses its fixed assets. That is using its assets to generate sales. Most of Mobilink’s assets are fixed, major of which include cell sites and other equipment. As the figures show, the ratio has decreased in 2007, from 0.53 to 0.51. Although the decrease is very small, the major reasons associated are the large increase in the fixed assets and the small increase in sales. The fixed assets rose by Mobilink GSM, An Orascom Telecom Company 31
Internship Report 29.3%, while the revenue rose by 26.3%. The major reason for the small increase in the sales could be associated to the rather small increase in the total subscribers in 2007, as compared to 2006.
188.8.131.52 Debt Ratio
Table 4.5: Debt Ratio Comparison between 2006 & 2007
The Debt Ratio measures the percentage of funds provided by sources other than equity. For Mobilink, most of its growth is funded through long and short term financing, and even though Mobilink has expanded its operations during 2007, but still the debt ratio fell in 2007, but only by 2%, which is mainly because of the large increase in the total assets, when compared to long term liabilities. The rise and fall of current liabilities and currents assets respectively is not much.
184.108.40.206 Return on Common Equity
Table 4.6: Return on Common Equity Comparison between 2006 & 2007
Return on common equity, a profitability ratio, measures the extent to which the shareholders of a company are getting returns on their investments. The ratio for Mobilink has decreased significantly in 2007, a decrease of 7.5%. This decrease can be associated to the small income available to the shareholder. Most of the net income has to be paid out in financial charges, which leaves less or the shareholders, which in 2007, expanded their investment in the company.
4.3 HUMAN RESOURCE ASSESSMENT
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Internship Report Mobilink, the largest cellular company of Pakistan, is made of a team of over 4500 of unique individuals. They are the best minds in the industry today, being exposed to the best practices and an enabling environment. Employees at Mobilink are treated as a big family, where their growth is as important as Mobilink’s. Capability building programs equip employees with all the skills and techniques needed for them to realize their ambitions, while diversity and wellness initiatives help employee’s further reach new heights and achieve their goals. Mobilink’s hiring takes place through its website which is being powered with a partnership with Rozee.pk, one of Pakistan’s premier website. This website provides updated information on job openings, as and when they happen. Furthermore the website is divided into three sections, all providing information accordingly: • • • Internship Candidates Entry Level Candidates Experienced Candidates
All employees at Mobilink are designated accordingly, which is as follows: Table 4.7: Designations of Mobilink’s Employees
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Internship Report Furthermore Mobilink employees receive a number of fringe benefits which include gratuity funds, post paid mobile packages, credit cards and discounted memberships with Citi Bank, employee loans, blackberry handsets, transport facilities for ladies, health club and Jinnah Stadium memberships etc. Training of employees is taken an integral part of the HR department of Mobilink. Training Calendars are published for employees, informing them about training dates and their descriptions. These training sessions take place both within and outside the city. Employees are even sent abroad for training. These include managers and directors within Mobilink, to polish and enhance the management and leadership skills further. Appraisal of employees is as important as training for any organization and Mobilink is no exemption. Mid Year and Yearly appraisal are conducted by line managers of each employee. Input from the employee being appraised is also taken to enhance the benefits of the appraisal activities. This input includes both their job objectives and responsibilities but also suggestions on what line managers could do more for support.
4.4 MARKETING ANALYSIS
In today’s contemporary business world, marketing plays an important role. Mobilink that has a number of competitors in the mobile industry, need to use their marketing plan and strategies effectively to attract customer loyalty. The marketing department at Mobilink anticipates, and satisfies the customer’s communication needs. This includes consumer behavior research and translating this research into services and pricing plans. The Marketing team also helps in identifying new business opportunities and develops plans to exploit those profitably. It also designs and implements brand strategies and communication plans.
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Internship Report The major ways in which Mobilink markets itself and its products are through the following ways: • • Electronic Print
4.4.1 Electronic Media The major way in which today’s organizations promote its products and services is through television, not only because it’s economical but also because the visual and audio aids help in promoting its product. Mobilink uses an aggressive advertising campaign on television to promote its products. These advertisements, while communicate an image of modernity and newness, still tend to show the heritage of Pakistan. The heritage of Pakistan and its people signifies Mobilink, as being the favorite cellular company of Pakistan. Mobilink has also for years, has tried to create different personalities for its brands: Indigo and Jazz, to distinguish them from other competing brands. Mobilink’s Indigo brand relied heavily on two factors toward establishing its brand equity: brand ambassadors that exuded style and sophistication, and a unique classy look that permeate all forms of its Indigo brand communication. It also played on the aspirations of young business professionals through the atmosphere and the locales of Indigo’s ads. On the other hand, the Jazz brand creates an image of fun, catering more to the youngsters and teens of the country. Not only that, it has also over the years created an image of bond among the members of the Jazz members, achieved due to the lowest rates and packages that Jazz has to offer. With Jazz advertisements, it’s all about having a show and tell tableau.
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Internship Report Other ways, in which Mobilink is marketing its products, is through its website and radio. The website of Mobilink is built in a way to provide updated information about its products, with dedicated pages for both its brands, Indigo and Jazz. Furthermore, the website also contains a gallery feature, from where users can view a wide array of print and television advertisement, created by Mobilink over the years. The use of Radio has also been used to promote the packages of Mobilink. Advertisement on radio, mostly inform listeners on the new packages and their details. 4.4.2 Print Media Print advertisements are another major way in which Mobilink advertises its product to the masses. Print media advertisements are printed in major English and Urdu newspapers across Pakistan. The messages of these advertisements are mainly of new packages that Mobilink may introduce over time. Figure 4.1: Print Advertisements of Mobilink
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4.4.3 Advertising Agency and Brand Ambassadors Mobilink uses the services of International Advertising (Pvt) Limited (IAL) SAATCHI & SAATCHI. IAL was established in 1966. IAL clients include PIA, P&G, Devan Mushtaq Motor Company (DMMC), PSO, Engro Foods Limited, National Foods and Sony Ericsson etc. Furthermore, it became the first agency to affiliate itself with an international agency- SAATCHI & SAATCHI, a top player in the global advertising arena. Furthermore, Mobilink uses its brand ambassadors to promote its products in both the electronic and print media. These brand ambassadors come from the fields of acting, modeling, singing and cricket and are few of the most famous and talented stars of Pakistan. The brand ambassadors are as follows: Mobilink GSM, An Orascom Telecom Company 37
Internship Report Table 4.8: List of Brand Ambassadors of Mobilink
Furthermore, stars like Shahid Afridi, Shoaib Malik, Shakeel, Behroze Sabzwaari, Sunita Marshall and Samina Pirzada have also appeared in Mobilink advertisements, from time to time.
4.5 ENVIRONMENTAL ANALYSIS
4.5.1 Industry and Market Analysis 220.127.116.11 Major Product Lines Market Segment Mobile Industry has been very effective in introducing new and innovative products and services over the years. The major product lines can be segmented into, three categories, which are as follows: 1. Consumer Packages 2. Value Added Services 3. Corporate Packages and Services These product lines have a range of different services, catering to different market segment. 18.104.22.168.1 Consumer Packages
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Internship Report The consumer packages of the mobile Industry include the prepaid and postpaid packages being provided by the different cellular providers of Pakistan. Prepaid packages, due to their nature is the most common type of package being used today by millions of Pakistani’s. Prepaid packages provide a sense of affordability, whereby consumers have the option of only recharging their accounts, when needed. This affordability has led to a massive increase in the prepaid subscriber base, with everyone from housewives to teenagers; to electricians to small shop owners all using prepaid packages. The main user segments of prepaid packages include the lower, middle and middle upper class of the country. Furthermore, a number of people use prepaid packages as a second number, which also include people from the upper class. Mobile companies today have used immense popularity of prepaid packages to introduce packages that are targeted to different segment. These include Telenor’s Djuice, targeted towards teenagers and young individuals and Mobilink’s Ladies First, targeted towards house wives. Furthermore, packages that bill at 1min, 30 second and per second have also been introduced by mobile companies. Postpaid packages were introduced, keeping in mind, the businessmen and executives. Postpaid packages, due to their nature provided the benefits of connectivity 24/7, without the fuss of scratch cards and recharge of accounts. Furthermore, as competition rose in the mobile industry and new entrants came; postpaid packages were made more affordable. The work of Warid in this concern is an example, creating postpaid packages as affordable as prepaid ones. The main market segments, towards which the postpaid packages are targeted, include small and medium businessmen, industrialists, bureaucrats and people of the upper class. However with the affordability of postpaid packages, people from the middle class have also been seen using post paid packages. 22.214.171.124.2 Value Added Services Mobilink GSM, An Orascom Telecom Company 39
Internship Report Value Added Services have become an essential tool for generating revenues for mobile companies today. Starting in the early years, from wallpaper and ring tones download, today mobile companies provide a range of services to their customers. Some of the popular services include, religion services, music services, which includes song dedication, voice and timed messages, sports and cricket services, food and recipe services, WAP/GPRS/EDGE, themes, wallpapers, games and ringtones downloads, credit share, MMS, voice mail, email, missed call alert, conference call, mobile TV, web2sms and many more. Value added services have been designed by companies, so that there are services for every segment of their users and that these services completely satisfy them, as and when needed. 126.96.36.199.3 Corporate Packages and Services Cellular providers in Pakistan are also providing corporate clients with services catered to them. Corporate clients due to their huge operations have special requirements. Mobile packages and tariffs; secure email and instant web connectivity, being some of the most important issues. Today mobile companies provide BlackBerry solutions, Mobilink and Warid being forefront in this technology, furthermore to add to this innovative service, companies today are providing SMS marketing feature, SMS management facility, fax mail, Wireless connectivity through EDGE, private numbering plans, closed user groups and mobile email to their corporate clients. All above features and many more have helped corporate clients to manage their operations effectively and efficiently. 188.8.131.52 Growth Rate of Entire Industry
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Internship Report The mobile industry has seen phenomenal growth over the years. Today there are five major competitors competing for their subscriber base, increasing the services provided, reducing their call rate and having aggressive marketing campaigns. Simply put, competition is heating up in the mobile industry. In July 2008, according to Pakistan Telecommunication Authority (PTA), the total subscriber base in the mobile industry reached to more than 89 million to 89,325,296. This was an increase of 41.4% from December 2007. Although this is phenomenal growth, analysts believe that it would be even higher, if taxes would have not increased, in the financial budget. The mobile industry saw phenomenal growth from 2005-2006. According to PTA, on average 2.3 million subscribers were added every month during 2006-07. Furthermore, in 2003-04 the sector was offering 466,068 direct and indirect employments, which in 2006-07 more than doubled to 1,366,698 employments. Also the cellular mobile density or mobile penetration in the total population has also increased over the years. In July 2008, the mobile density reached 55.62%. It was 54.7% in Dec 2007 and 39.94% in Dec 2006, according to official figures. Also during 2006-07 the revenue of mobile industry was Rs.133 billion, an increase of 48% from pervious year However, none the less, the growth has subsided since 2006, from 170.2% in December 2006 to 80.7% in December 2007, the major reasons of which include the crackdowns on SIM registration, rising taxes and the general economic conditions of the country.
4.5.2 Competitor Analysis 184.108.40.206 Major Competitors
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Internship Report 220.127.116.11.1 Ufone Pakistan Telecommunication Mobile Limited (PTML) is a wholly owned subsidiary of PTCL, established to operate cellular telephony. The company commenced its operations, under the brand name of Ufone, from Islamabad on January 29, 2001. Since its inception, Ufone changed the image of mobile phones from a luxury only affordable by the elite, to a necessity affordable by the common man. Ufone’s primary focus always remained on their valuable customers, introducing services over time to fulfill their need and demands. Ufone’s slogan has always remained “It’s all about U”. As a consequence of PTCL’s privatization in 2006, 26% of its shares were acquired by Emirates Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone has also been handed over to Etisalat. Now, under the management of Etisalat, Ufone tends to concentrate on customer needs and benefits and its management is even more determined than ever to be the leading cellular player in the market, because Ufone has been known for providing superb propositions and quality service to its customers and tends to keep that reputation in the future. Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a subscriber base of over 18 million in July 2008, according to PTA and a market share of 21% during the time period. Currently, Ufone has network coverage in more than 750 cities, towns and across all major highways of the country. It also provides international roaming to more than 195 live operators across 119 countries. Currently Ufone is under the agreement with Huawei, which will provide its future oriented Energy GSM solution to expand Ufone's network to cover over 2200 cities, towns, villages and all major highways in the country. The network also allows Ufone subscribers to enjoy high-speed wireless data service and enables the telecom service provider to evolve into 3G smoothly. Mobilink GSM, An Orascom Telecom Company 42
Internship Report 18.104.22.168.2 Telenor Telenor Pakistan is 100% owned by Telenor ASA and adds on to its operations in Asia together with Thailand, Malaysia and Bangladesh. Telenor acquired the license for providing GSM services in Pakistan in April 2004, and had launched its services commercially in Islamabad, Rawalpindi and Karachi on March 15, 2005 and on March 23, 2005 Telenor started its services in Lahore, Faisalabad and Hyderabad. Telenor’s investment in Pakistan is the single largest direct European investment in Pakistan. By the end of July 2008, the total subscribers of Telenor exceeded 18 million, with a market share of 20%. Telenor’s network covers more than 3000 cities, towns and highways throughout Pakistan. Furthermore, Telenor Pakistan has more than 5,000 cell masts throughout Pakistan, making it the 2nd largest network in Pakistan and 3 rd in terms of customer base. Telenor has a strategic alliance with Nokia Siemens Networks for expansion in Pakistan. With USD 1 billion already invested, Telenor has extended agreements with its vendors, including Nokia Siemens for network expansion and services until 2009. The agreements will result in USD750 million worth of orders from Telenor Pakistan. 22.214.171.124.3 Warid Warid Telecom is a joint venture between Abu Dhabi Group & SingTel Group. In 2004, Warid Telecom International LLC, purchased a license for operating a nationwide mobile telephony network, (WLL) and long distance international (LDI) for $291 million US dollars and was the first venture of Warid Telecom International LLC. Warid Pakistan launched its services in May 2005 and is based in Lahore. Abu Dhabi Group is one of the largest business groups in the Middle East and the single largest foreign investor in Pakistan. Abu Dhabi Group entered into a strategic alliance with Singapore Telecom. Subsequent to this transaction in July 2007, Mobilink GSM, An Orascom Telecom Company 43
Internship Report telecom giant SingTel acquired 30% percent equity stake in Warid Telecom, Pakistan, for US$758 million- valuing the company at an enterprise value of $2.9 billion. This partnership is part of a strategy to support Warid Telecom’s continued growth and to enhance its market position. In July 2008, Warid’s total subscribers were more than 15 million subscribers and enjoyed 4th position in the market with a market share of 18%. In June 2008, Warid Telecom announced it would invest $1.5 billion by end of this year and $2.5 billion by end of 2009 to expand and modernize its network in Pakistan. 126.96.36.199.4 Zong China Mobile Pakistan (CMPak) is a 100% subsidiary of China Mobile. The pioneering overseas set up of China Mobile came through acquisition of a license from Millicom to operate a GSM network in Pakistan. With ambitious plans to cater to the fastest growing Pakistani market and to win over the ever demanding Pakistani customer, CMPak's edge comes from the experience and expertise of running the world's largest telecom service and the commitment they make to setting quality and customer relations standards. ZONG is the first International brand of China Mobile being launched in Pakistan. On 22nd January 2007, Millicom International Cellular S.A. announced that it would sell its 88.86 percent stake in Paktel Ltd. to China Mobile for $284. On 4th May 2007, Paktel was renamed to CMPak and then, on 16th May 2007, China Mobile announced that it had upped its stake in CMPak to 100%. It later re-branded Paktel to Zong. In July 2008, the total subscribers of Zong were more than 4 million and enjoyed 5th position in the market with 5% share in the market. So far CMPak has invested more than US$ 700 million in the telecom sector in Pakistan and an additional US$ 800 million will be invested till the end of year 2008.
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Internship Report 188.8.131.52 Their Market Shares According to official figures in July 2008, there were a total of 89m subscribers (89,325,296) in the mobile industry, Ufone had 18 million (18,368,074) subscribers and was second in market share to Mobilink, followed closely by Telenor with 18,329,428 subscribers, a difference of just 38,646 subscribers. This difference was 3,312,712 subscribers at the end of 2007. Warid was forth with 15 million (15,774,299) subscribers. Warid has also lost to Telenor in terms of market share since 2006, when it was third in the industry. In July 2008, Zong had 4 million (4,446,024) subscribers and was fifth overall. Instaphone had only 351,135 subscribers during this time. In 2007, Ufone still remained second (14,014,044) in terms of mobile subscribers and Telenor third (10,701,332), followed closely by Warid (10,620,386), which remained forth. Zong was fifth (1,024,563) and Instaphone sixth (333,081). The total subscribers in 2007 were 63 million (63,159,857). 184.108.40.206 Their Goals and Strategies 220.127.116.11.1 Ufone Ufone is one of the major competitors of Mobilink and has sustained a good market share over the years. It has remained second overall for a number of years. However just recently, Telenor, which had gained third position in 2006, in the industry, is giving strong competition to Ufone and even achieved second position in the first quarter of 2007. The main goal of Ufone is to provide its customers with the most effective and efficient manner of communication. The main goal of Ufone has always been of providing its customers with the state of the art services at the most simplest rates in the industry. Its goals have always revolved around U (its customers), which can be seen in its punch line or slogan “it’s all about U”. Furthermore, by accomplishing its Mobilink GSM, An Orascom Telecom Company 45
Internship Report goal, Ufone would be able to sustain its market share in the industry and remain in the second position and defend its position from competitors like Telenor. The main strategies of Ufone to accomplish their goals surround around providing services that fulfill the needs of the society at all levels of the society. Ufone was the first mobile company to stop charging for incoming calls, first to introduce GPRS, first to start bundle SMS packages and recently its call rates have greatly reduced and have become even simpler. Furthermore its commitment can also been seen from the fact that it’s slogan of “it’s all about u” has not changed over the years. 18.104.22.168.2 Telenor Telenor since its inception in 2005, has been an aggressive company, trying to gain market share from other competitors, first it took the third position from Warid (another company that started in 2005) in 2007 and is now giving stiff competition to Ufone (currently second13) and is favorite in gaining the position from its rival company. The main goal of Telenor is to help its customers get the full benefit of communications services in their daily lives. This is also reflected in their vision, which is “we’re here to help”. The main goal of Telenor is to provide services, which take use of the latest technologies and are also new to the industry, thus providing their customers with the full benefits of communications, which other companies are not able to provide. Telenor’s slogan or punch line also reiterates their goal which is “the smart call”. Henceforth, by accomplishing its vision, Telenor would be able to take the second position in the industry and can then provide competition to the market leader-Mobilink. The strategies used by Telenor to achieve its goals is by being creative, that is providing new and modern services, that take advantages of new technologies but are also easy to understand and use. Some of the creative products introduced by Telenor over the years include: Easy Load, Smart Share, mobile TV, largest network of Mobilink GSM, An Orascom Telecom Company 46
Internship Report EDGE, Pic Share, international packages like Djuice and many more. All these services are very creative, never been introduced before and helping all its customers around Pakistan. 22.214.171.124.3 Warid Warid started its operations in May 2005, and enjoyed a good market share in the industry, however it has lost its subscribers to its competitors in recent years, leading to its loss of position in the industry. The main goal of Warid is to maintain and strengthen its current market share and increase to positions, which it earlier held in the industry. The major strategy used by Warid is to create a sense of confidence among its customers that it is the best network for their lives. That is it provides the best calling and sms rates, including the value added services. Its slogan, “life ka network” also provides emphasis to this point. Warid had earlier efficiently promoted its postpaid packages as affordable as its prepaid packages, a strategy that increased its postpaid customers significantly in the mobile industry, at a time when overall post paid connections were decreasing. Currently its agreement with SingTel will also provide emphasis to its goals and associated strategies. 126.96.36.199.4 Zong Zong, a recent entrant in the mobile industry is a subsidiary of China Mobile. Zong’s inception was the result of the takeover of Paktel by China Mobile in 2007. Being a new entrant in the mobile industry, its goal is to gain market share, currently Zong is a small part of the industry, but however it aims to increase its market share reach above 10% by 2010.
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Internship Report The main strategy of Zong in this concern is to allow people to communicate at will, without worrying about tariffs, network coverage, capacity issues or congestion. Its slogan “Say it All”, provide the emphasis to their strategy. Currently Zong is providing packages with the lowest call rates. Furthermore it has also introduced features, which were not present earlier. These include change of happy hours, changing SMS packages and internet packages on the discretion of its customers. 4.5.3 Technology Analysis 188.8.131.52 Technical Methods That Affect the Industry Mobile networks are one of the most technical aspects of any mobile company and the technology changes affecting the networks have changed considerable, since the first mobile company Paktel was introduced in Pakistan. Paktel’s networks ran on Advanced Mobile Phone System (AMPS). AMPS was the analog mobile phone system standard developed by Bell Labs. AMPS were a first generation cellular technology that used separate frequencies, or "channels", for each conversation. AMPS used considerably more computing power in order to select frequencies; however cell centers could flexibly assign channels to handsets based on signal strength, allowing the same frequency to be re-used in various locations without interference. However it suffered from some weaknesses when compared to today's digital technologies. Since it is an analog standard, it was very susceptible to static and noise and had no protection from eavesdropping using a scanner. However with the introduction of Mobilink in 1992, Pakistan’s mobile industry entered into the second generation of mobile networks with GSM. GSM (Global System for Mobile Communications) is the most popular standard for mobile phones in the world. Its promoter, the GSM Association, estimates that 82% of the global mobile market uses the standard. Its ubiquity makes international roaming very common between mobile phone operators, enabling subscribers to use their phones in many parts of the world. GSM differs from its predecessors in that both signaling and Mobilink GSM, An Orascom Telecom Company 48
Internship Report speech channels, which are digital, and thus is considered a second generation (2G) mobile phone system. This has also meant that data communication was easy to build into the system. GSM also pioneered the short message service (SMS), which is now supported on other mobile standards as well. Most GSM networks operate in the 900 MHz or 1800 MHz bands. Currently all mobile networks of Pakistan have entered the 2.5G. Mobile networks entered the 2.5G, by implementing the General Packet Radio Service (GPRS). It is a packet oriented mobile data service available to users of GSM. GPRS can be used for services such as Wireless Application Protocol (WAP) access, Short Message Service (SMS), Multimedia Messaging Service (MMS), and for internet communication services such as email and World Wide Web access. Later on, Enhanced Data rates for Global Evolution (EDGE) was introduced, EDGE is an upgrade that provides a potential three-fold increase in capacity of GSM/GPRS networks. Although EDGE is a 3G technology, but it is considered a part of 2.5G technologies, however sometimes separately referred to as 2.75G. Currently the Pakistan Telecommunication Authority is planning to launch 3G licenses in Pakistan, starting from the end of 2008. 3G networks enable network operators to offer users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency. Services include wide-area wireless voice telephony, video calls, and broadband wireless data, all in a mobile environment. Additional features also include HSPA (High Speed Packet Access) data transmission capabilities able to deliver speeds up to 14.4Mbit/s on the downlink and 5.8Mbit/s on the uplink. Furthermore 3G networks offer a greater degree of security than 2G predecessors. 184.108.40.206 Innovation The mobile industry of Pakistan is considered by many as the most innovative industry of Pakistan. Innovation means introducing new things or methods, and the Mobilink GSM, An Orascom Telecom Company 49
Internship Report mobile industry has kept this promise by introducing new and innovative services for years. In recent years, most of the innovative services have been introduced by Telenor; these services being innovative took the Pakistani market by storm and have become part of our daily lives. Examples of these services include Easyload and Smartshare. Although Telenor is seen as the most innovative company right now, we cannot diminish the contributions of other competitors to the Pakistani mobile industry. Some of the innovative services introduced by the different service providers are as follows: • • • • • • • • • • • • Introduction of dynamic SIM’s by Ufone Introduction of GPRS capabilities of Ufone Introduction of voice controlled services by Mobilink Introduction of Bundle SMS packages by Ufone Introduction of voice SMS by Telenor Introduction of emergency credit buying by Mobilink Introduction of dedicated website for downloads by Warid Introduction of credit share by Telenor Introduction of BlackBerry services by Mobilink Introduction of mobile television by Telenor Introduction of caller tunes by Mobilink Introduction of backup of contact lists by Ufone
These and many more services have helped make the mobile industry what it is today. With innovations, being the hallmark of the mobile industry of Pakistan, future prospects are bright. Also with swap of mobile operators becoming very easy using Mobile Number Portability (MNP), and competition based on tariffs, innovation becomes a must to create a competitive advantage. Furthermore, introduction of 3G services in the years to come would also increase the innovative service provided by Mobilink GSM, An Orascom Telecom Company 50
Internship Report the mobile operators. Future innovation would take advantage of the current network capabilities and additional benefits of 3G networks, including the high speed data transfer services. 4.5.4 Strategies at Mobilink Major strategies employed by the organization at various levels are 220.127.116.11 Corporate Level Strategy As their corporate level strategy, they have entered into partnerships with different organizations. On the basis of findings, it appears that for the past few years (1999-2003), Mobilink had a focus on internal growth. All this is evident from the fact that since the deregulation of the mobile service industry of Pakistan, Mobilink has undertaken various efforts to ensure that it changes its stance from concentrating on its existing market to growing its market presence. The main reason for this change is mainly to keep up with the competition and to retain and increase its market share. This transition is obvious in Mobilink’s repositioning itself and hitting the market with a new face with the catchphrase “Reshaping communication” With the threat of new entrants into the industry after the deregulation, Mobilink’s strategy took a new turn. To keep abreast with the company, Mobilink took the following steps during the last 2 years: • Expanded its international roaming Service scope in 14 more countries including Vietnam, Germany, Bangladesh, Ukraine, Iran, Venezuela, Nigeria, South Africa, Ethiopia, Uganda, Sudan, Bahrain, Caribbean Islands. Bilateral roaming agreements signed with 100 countries around the world to have true roaming service operational in 151 operators of the world. • PROMOTIONAL CAMPAIGNS LAUNCHED
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Internship Report o JAZZ BUNDLE OFFERS: These bundles include a handset, a JAZZ connection and airtime worth Rs. 200 o INTERNATIONAL SUMMER PROMOTION: Discounted international tour packages to Sri Lanka, Malaysia and Maldives o “JAZZ-AUR-SUNAO”, “LIFE MEIN JAZZ LAO” (a change in the marketing strategy) o Indigo packages deliver nation wide cellular freedom at local Call rates o Exclusive deals to 6 northern area destination including Chitral, Galliat, Hunza, Kaghan , Skardu and Swat. o Roam the World: year long promotion including travel to the Holy Land in Ramadan, avail amazing offers at the Dubai Shopping Festival, be a part if the FIFA World Cup in Germany or visit Paris, Milan, London and NY. 18.104.22.168 Business Level Strategy As their business level strategy it has focused on Differentiation strategy ever since it started. Mobilink has always made successful attempts to distinguish their products or services from other in the industry. They make their product unique through: 22.214.171.124.1 Advertising • • Highly creative people in the marketing dept Billboards, TV commercials, bringing in famous personalities from media to endorse their packages 126.96.36.199.2 Distinctive Product Features • • Value added services Online billing
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Internship Report • • GPRS enabled Mobilink also started 3 friend and family number with a charge of 2.25/min still expensive as compared to Warid but giving incentive to subscriber there is an additional cost of RS 25 to add friends and family number. • International roaming: Bilateral roaming agreements signed with 100 countries around the world to have true roaming service operational in 151 operators of the world. 188.8.131.52.2 Exceptional Service • There are certain areas of Pakistan where PTCL connections are not available; the PTCL cables have not reached yet, but Mobilink has its service in those areas. • • Providing services in 413 cities Best customer service in the cellular market: Biggest Call Center in Pakistan, which is there to assist the customers 24 hours. 184.108.40.206.3 New Technology • • • Introduced GSM tech- bye to AMPS? GPRS system – fast and inexpensive MOBILINK GSM Short Message Service Center allows Vehicle Tracking and Fleet Management services that are being provided by Tracker (Pvt.) Ltd., under the brand name of C-Track, a company licensed by Pakistan Telecom Authority (PTA). Tracker currently operates from Karachi but can provide these facilities at all those locations where GSM coverage is available. Their differentiation strategy is usually targeted at people who are not particularly concerned with price, so it can be quite profitable e.g. indigo and blackberry are relatively expansive packages; blackberry is mainly targeted for the business class who can afford it. In this way, the revenue generation remains high. Mobilink offers Mobilink GSM, An Orascom Telecom Company 53
Internship Report tariff plans that are exclusively designed to cater to the communication needs of a diverse group of people, taking into account occasional users to businessmen. To achieve this objective, mob offers both postpaid (Indigo, relatively expensive) and the prepaid (JAZZ, relatively inexpensive) solutions to their customers. 220.127.116.11.4 Low Cost Strategy Mobilink does not follow a low cost strategy. Mobilink is a giant in Pakistani mobile industry Tel. Since it first started its operations, it has been focusing its products on the upper strata of the society. That is why its rates are higher than its competitors, Ufone, Warid, Telenor, etc. 18.104.22.168 Functional Level Strategy 22.214.171.124.1 Sales and Marketing • • Differentiation Advantage: Because they target the customer groups they offer tariff plans that are exclusively designed to cater to the communication needs of a diverse group of people, taking into account occasional users to businessmen. To achieve this objective, they offer both postpaid (Indigo) and the prepaid (JAZZ) solutions to their customers • The marketing department immediately identifies and responds to the customer needs. 126.96.36.199.2 Commitment to Total Customer Satisfaction: Customers are at the heart of my success. They have placed their trust and confidence in us. In return, I strive to anticipate their needs and deliver service, quality and value beyond their expectations. 188.8.131.52.3 Passion for Business Excellence:
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Internship Report I strive for excellence in all that I do. I aspire to the highest standards and raise the bar for myself everyday. This commitment to delivering world-class quality translates into unmatched service and value for my customers and all stakeholders. 184.108.40.206.4 Trust & Integrity: At Mobilink, I take pride in practicing the highest ethical standards in an open and honest environment, and by honeying my commitments. I take personal responsibility for my actions, and treat everyone fairly, and with trust and respect. 220.127.116.11.5 Respect for People: My relationships drive my business. I respect and esteem my employees and all stakeholders. I believe in teamwork, empowerment and harmony. 18.104.22.168.6 Responsible Corporate Citizen: As the market leader, I recognize and fulfill my responsibility towards my country and the environment I operate in.
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CHAPTER 5 FINDINGS AND RECOMMENDATIONS
5.1 FINDINGS & PROBLEMS
The findings are the facts that I have discovered from the analysis of the Mobilink and in the light of those findings I have given the suggestions, which are realistic and adoptable for the organization. After critically analyzing both the operations and financial data of Mobilink I have summarized the findings of the report. These analyses are mainly based on my practical working & experience at the Mobilink during internship. 5.1.1 Job Rotation and Advancement The main problem that I have identified within the SALES department as a whole is the lack of job rotation within the department and not enacting on the job advancement rules. According to my findings, no official job rotation takes place within the department, even though the employees informally try to learn about the working of other departments through their peers. They show keen interest in learning new things as all the operations within the department are interlinked. Furthermore the only time, officially, when an employee is told about the working of another part of the department, is only when he is moved to that part, for example, when an employee initially working for sales operation department is transferred to off indirect sales because of shortage of employee. This learning should not be considered as a job rotation, because this shift is permanent for that given employee.
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Internship Report Furthermore, at Mobilink, the rules and procedures for job advancements are laid out however it has been seen that junior executives, especially those at associate level are not promoted to specialist levels, even though they have fulfilled the main requirement- years of experience with Mobilink. This creates dissatisfaction within the employees. 5.1.2 Unequal distribution of work Work is not equally distributed. On one hand some employees have to work all day without relaxing while some others have very little to do. This not only creates confusion among employees but also hurting and disturbing the overall setup of the company. And above all it results in dissatisfaction among customers as well. 5.1.3 Lack of staff Staff of the indirect sales is less and workload is too much on the existing staff especially in operations due to which they are unable to give proper time to their franchises. 5.1.4 Mismanagement of Internees At Mobilink the selection of internees was based on nepotism basis. Some internees even did not hold a commerce or business qualification, but they were working due to some relationship with manager or some other employee of branch. Moreover there was no proper plan to train the internees. 5.1.5 Favoritism and Nepotism The promotions are mostly powered by senior’s favoritism or depend upon their wills and decision. This adds to the negative factors, which denominate the employees thus resulting in affecting their performance negatively.
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Employees have very limited authority; they have to take the approval from management authority for every thing that is out of routine which is very time consuming.
The mobile industry has seen phenomenal growth over the year, showing growth rate of more than 80% in 2007. This growth is not new to the industry, as previous years have shown substantial growth as well. This growth is a direct result of the increased competition in the mobile industry, resulting into better services at reduced rate. Furthermore, this has favorably affected our economy as a whole, generating revenues for the government, through direct and indirect taxation and creating employment opportunities for the people. The mobile industry of Pakistan is considered by a majority of prospective employees as the best industry for a job. Although the mobile industry has seen substantial growth over the years, many observers feel that the industry may become saturated and will show lower growth rates as a result of increased taxation and the general economic conditions of Pakistan. Although the concerns may be valid to some extent, but with PTA, introducing the 3G platform in the coming years and a major part of our population still without mobile connectivity, especially in distant villages, there is still optimism that the mobile industry will not become saturated and there is still place for competition in the industry. Mobilink has been in operation since 1994, and since then has become the market leader by providing its customers with the state of the art products and services. Mobilink has for years enjoyed a good market share of the total industry; its current market share is 36%. Mobilink GSM, An Orascom Telecom Company 58
Internship Report Even though Mobilink has been a market leader, for so many years, providing the most technological advanced products and services, it has for a number of years been facing strong competition from Telenor and Ufone, which has resulted in a decrease of its market share. This has led Mobilink to a policy of diversification, by introducing products like Mobilink PCO and WIMAX services. Although Mobilink has diversified, it still is providing competitive products and services for its core products-Jazz and Indigo. Finally, internships are an important part of the academic program, as they provide us with the practical experience during our academic career. I am very grateful that I received an internship at Mobilink as it was a great learning experience on how a multinational company works and further improved my skills of team working and critical decision making.
5.3 RECOMMENDATIONS AND SUGGESTIONS
As identified earlier, the problem that I identified was the lack of job rotation within department and not enacting on job advancement rules and procedures. Some of the recommendations to this problem are as follows: Firstly I would recommend that the department officially start job rotation. The major benefit of which would include even more motivated employees, with enhanced skills. One of the major arguments against job rotation is that without it, employees will perform only one task and will become specialized in that particular job. Furthermore, the argument also suggests, that with job rotation, only general information is imparted to employees, not essentially helpful in doing complex tasks. However, in today’s business environment, multitasking is becoming more and more essential and thus rotation becomes essential in making employees multitask.
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Internship Report Furthermore, the organization structure of the treasury department makes it easy for job rotation, as all sub departments major functions are interlinked to each other and mostly all departments currently have more than one associate employee, except cash management. Secondly I would also suggest that specific job related training should also be imparted to the employees, this would have an additional benefit of further improving their current skills and knowledge, while attaining new through job rotation. Also professional counseling programs should also be started to provide employees with the information, regarding future prospects at Mobilink and in the mobile industry. Lastly, I would suggest, that Mobilink adheres to its job advancement procedures because for an employee that has worked with Mobilink for more than 2-3 years, they should be awarded with the fruits of job advancement, as I believe that the criteria of job advancements currently used is a standard in most MNC’s and job advancements are a part of career growth. Furthermore, job advancement s will create future leaders for Mobilink. Thirdly the policy makers of Mobilink should reconsider their call and SMS rates as they are no more a monopoly in the country now they are to face competition, which by no regard is easy. Lastly I will say that human being are prone to experiment; same is the case here as more telecom companies are entering the competition people are moving more towards them so for the skew of retaining their customer Mobilink should become more dynamic by introducing new and more customer friendly packages.
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• • • • • • • • • • Wikipedia (www.wikipedia.com) Mobilink (www.mobilinkgsm.com) Pakistan Telecommunication Authority (www.pta.gov.pk) Ufone (www.ufone.com) Telenor (www.telenor.com.pk) Warid (www.waridtel.com) Zong (www.zong.com.pk) Orascom Telecom (www.otelecom.com) The News (www.thenews.com.pk) Articles used: o Mobilink o Ufone o Telenor Pakistan o Warid Telecom (Pakistan) o Paktel o China Mobile (Pakistan) • Reports o Orascom Telecom Annual Report 2007 o Orascom Telecom Annual Report 2006 o Mobilink’s Balance Sheet and Income Statement
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