Table of Contents Wiki Editing Tips Assignment General Notes & Change Log Assignment Case Study Dialog Telekom

Limited: Leader in Mobile Telecommunication Introduction History Industry Background Vision Mission Corporate Values Organizational Goals Culture Organizational Structure Board Of Directors Senior Management Products & Services Mobile ISP Global Broadband Dialog SAT Rewards Programs Operations Coporate Social Resposibilities Reference Case Analysis Dialog Telekom Limited Executive Summary Introduction Internal Environment Analysis Strategy Structure Systems Style Staff Superordinate Goals Skills Financial Analysis External Environment Analysis PESTEL Political Economical Socio-Cultural Technological

Ecological Legal Five forces Threat of New Entrants Bargaining Power of Buyers Threat from Substitutes Bargaining Power of Suppliers Rivalry among Competing Firms SWOT Analysis Strengths Weaknesses Opportunities Threats Strategic Alternatives & Recommendations Corporate Strategy Business Strategy Functional Strategy Implementation Evaluation & Control Conclusion Presentation Slides Slide : External Environment Analysis Slide : PEST Analysis Political Economical Socio-Cultural Technological Legal Five forces Threat of New Entrants Bargaining Power of Customer (Buyer) Threat from Substitutes Bargaining Power of Suppliers Rivalry among Competing Firms SWOT Analysis Strengths Weaknesses Opportunities Threats Slide 3 Slide n Appendix Appendix A: Financial Statements

Sri Lanka's flagship Telecommunications Company operates Dialog GSM. Dialog Internet. . Dialog Global has established itself as a premier provider of International Services in Sri Lanka As espoused in its signature. web based chat and/or email to support the company's ever increasing customer base. Mobile Banking. Information on Demand services. the company provides 24x7 support for all its services to its customers. is a major step towards 3G (3rd Generation) technology. and is a Subsidiary of the Telekom Malaysia Group. The company's thrust towards the expansion of its portfolio of services continues with relentless momentum. Dialog's service agents are available round the clock via person to person interaction. the company prides itself in its commitment to.5G GSM. In addition to the above cutting edge service developments. "The Future Today". the country's pioneer Mobile Satellite Service Provider. offering higher data speeds. The company prides itself in a customer servicing infrastructure which is unrivalled by any other service provider in the country. the country's largest mobile phone network. The company is also a key player in the Internet Service Provision Market with its state of the art ISP. Research. Dialog GSM extended its regional leadership in mobile technology with the introduction of Multi-Media Messaging (MMS) in 2002 placing itself among the first 35 networks in the world to support this break through mobile telecommunications technology. the most recent additions being the Mobile-Wallet a state of the art mobile commerce application enabling secure payment for a wide range of products and services via a mobile phone and location based services. and also operates Dialog SAT. interactive Short Messaging services for entertainment as well as business applications were some of the Value Added Services (VAS) which were in commercial operation in 1998 well ahead of regional networks. billed as a flagship installation in Sri Lanka. Following an aggressive entry in to the International Services Market. Development and New Technology introduction. enabling the exchange of multi-media content between mobile phones and even to/from the Internet. mobile email. GPRS . With the recent launch of its state of the art contact centre.Dialog Telekom Limited: Leader in Mobile Telecommunication Introduction Dialog Telekom. the company was instrumental in extending the scope of mobile telephony to mobile data and a host of value added applications within the first few years of its operation. Dialog GSM has the distinction of placing Sri Lanka as the first in the country in the region and among the first 40 countries in the world to support High Speed Packet Based Mobile Data Services with the launch of GPRS (General Packet Radio Service) in 2001. and achievement trail in. packet based data communications and end to end IP (Internet Protocol) based connectivity. The network also provides a range of Voice Portal Services providing voice based entertainment services ranging from Sports news and greetings to the registration for medical appointments.a key element of 2. Powered by a dedicated staff of over 150 service professionals.

a wide variety of community development initiatives have been initiated by the company. ranging from support for nationally recognised initiatives directed at uplifting the Hearing and Speech impaired. The company's research and development efforts have also been directed at the use of mobile communications technology for the benefit of the community. the skills. Centered on its CHANGE . and attributes its success to."Transforming Their Future Today" programme. through the launch of Satellite Mobile Telephony Services under the brand name of Dialog SAT. The company has been recognised as a world leader in this respect and has the distinction of being the only operator in the world to win 3 GSM World Awards (from the world GSM body) for its innovations in the use of wireless technology.The company believes in. Through the years during which the company grew to being a hall mark for Sri Lankan technology excellence on the global mobile telecommunications map. With robust linkages in to the Global network of Telekom . The last of these awards was won for the company's unique SMS based Blood Donation network established in collaboration with the National Blood Transfusion History Dialog GSM has spearheaded the mobile industry in Sri Lanka since the late 90's propelling it to a level of technology on par with the developed world. it has also worked aggressively towards developing the potential of several segments of the community. The company has pursued a strategy of broadening its portfolio of telecommunications services and in 1999 launched Dialog Internet a fully fledged ISP connected through to the Internet Backbone of Telekom Malaysia within the Multi Media Super Corridor in Cyber Jaya. followed closely by International recognition in the form of the (Malcolm Baldridge) Asia Pacific Quality Award in 2002. supporting the very latest in multimedia and mobile Internet services. dynamism and bountiful potential of the people of Sri Lanka. The relentless pursuit of excellence in high technology service provision earned the company the distinction of being the first Telecommunications operator in South Asia to receive ISO 9001 certification.2 billion people in 99 countries across 3 continents. Dialog SAT brings with it the extensive coverage of the Thuraya Satellite Mobile Telephony Services. now available throughout the length and breadth of Sri Lanka and reaching 3. The Commitment of the company to excellence in business practices led to the winning of the National Quality Award (Large Scale Service Category) in 2001. Dialog GSM is the country's largest cellular network providing services to over half a million customers (as of 2002) across all nine provinces of the island. the Disabled and the nation's Children. The liberalisation of the International Telecommunications market in 2003 provided an opportunity for the company to launch its latest power brand . The company operates a 2. a forerunner in the International Services market.5G GSM network. through to the sponsorship of sports enabling Sri Lankan talent to be showcased on the international stage. and also provides International Roaming facilities in over 100 countries. The company has pioneered a new dimension in mobile telephony in 2002.Dialog Global.

. Significantly the partial liberalisation of the telecommunication industry became the ground breaking transformation in this process (Asoka. devaluation of currency. 27 of 1996 converted STA into Telecommunications Regulatory Commission of Sri Lanka (TRCSL). power. nine years after the industry was recognised as a separate entity the first private investment materialised when Celltel a private mobile operator entered the market. TRCSL has became the sole body to inquire into matters related to telecommunications industry in Sri Lanka. not a result of a crisis. operations and regulation and assigned responsibilities to the ministry. In 1997. Rs 108 per US dollar. In 1991 the department was transformed into a corporation naming it as Sri Lanka Telecom (SLT) through the enacting of the Sri Lanka Telecommunications Act No. In a way this is a positive approach since the developing countries can improve their balance of payment problems through exports and consumers can benefit from high quality products and services offered at comparatively low prices due to cheap labour in developing countries. In 1980 the government split the then tightly coupled posts and telecommunication services into two departments. Nevertheless this was a result of a gradual process. 2005). The terrorist activities prevailing in the country though is a key decisive factor. By 1989. purchasers and other users. The exchange rate has decreased from Rs 50 per US dollar a decade ago to. As a result the Department of Telecommunication was formulated. . the regulator respectively. unification of exchange rates and removal of import export restrictions. This was a major mile stone in the liberalization process after the initiation in 1980s.Malaysia Bhd. Hence arguably these were not key decisive factors in the investment patterns (Rohan. However STA did not have the independence. Industry Background Fundamental economics describes that in order to grow you need investments and in order to invest you need to save. TRCSL maintains and promote effective competition within the industry. Human capital development. SLT and Sri Lanka Telecommunications Authority (STA). The privatisation programs that were launched by the Sri Lankan government to attract foreign investment were a trial and error type approach. globally. 25 of 1991. wholesale and Private Network services. 2006). structure. has been constant for the past twenty years. the company has added a new dimension in International Service provisioning in the country with the commissioning of a state of the art gateway infrastructure providing access across the globe for retail. Exhibit 1 displays investment details from 1993 to 2005. However a popular trend in developing countries is to depend on foreign investment for growth. technology transfer and increased international trade are some positive impacts of foreign investments on the industry. These trends have brought fundamental changes in service oriented industries such as Telecommunication. SLT was partially privatised by sale of a 35% stake to NTT of Japan and Sri Lanka Telecom Ltd (SLTL) was formalised. resources or accountability and was performing unsatisfactorily. The act separated policies. It also promotes research and development activities for the industry in order to make Sri Lanka the hub for international transit services in the region. While protecting and promoting the interests of consumers. Hence. Hence economies are shaped by policies like tariff lowering. the Sri Lanka Telecommunications Act No.

. Since 1991 the teledensity (number of telephones per 100 persons) for both fixed and mobile sectors has increased (fixed lines from 0.4 in 2004). With the adoption of competition-oriented regulations during mid 90¶s over government funded investments there have been positive indicators of a more natural market.Exhibit 1: Major Investors in Fixed and Mobile Operators. investments by private operators exceeded that of SLTL for the first time indicating the start of a normal market-based industry.1 in 2004 and of mobile phones from 0.1 in 1991 to 11. The Island. 1993-2005 y Nine point six percent of Dialog¶s stake was opened to public on the 7th July 2005 and it was over subscribed by six and half percent within one hours of IPO opening (Daily News. 8 July 2005.7 in 1991 to 5. Exhibit 2 displays the annual growth in the industry. investments in the industry was driven by government decisions on how much revenue the state owned institute can reinvest and on the nature and extent of foreign credit and aid facility. During the reign of government monopoly. 9 July 2005) Source: Asoka (2006) The reforms were not solely initiated by the government but mainly imposed by the World Bank and International Monitory Fund through structural adjustment programs as conditions for support. International organisations such as World Trade Organisation and International Telecommunication Union stimulate the telecommunication industry liberalisation. For example in 2002.

data transmission and other telephony services. interconnection revenue. and sale of handsets. Telex. low infant mortality rate and long life expectancy). Sri Lanka despite its many advantages and early opening up of the economy is lagging behind India. Factors include better social conditions (high literacy rate. The turnover for fixed line operators comprise of income received from sources such as. strategic location and an educated and trainable work force. other service income. The turnover for mobile operators comprises of income received from rental income. rental income. receipts from other network operators-domestic (interconnection) and international. . which had followed relatively closed economic policies until recent but after mid 90s has aggressively attracted and dominated foreign investments. in comparison Sri Lanka has not attracted significant private investments into the sector. Sri Lanka compared to its neighbouring countries has many advantages apart from most favourable policies towards foreign investors. However. domestic call revenue.Exhibit 2: Annual Growth Rate of Fixed and Mobile Sectors Source: TRCSL Exhibit 3 describes the turnover from 1994 to 2005. value added services.

However. spurred by an empowered set of dedicated individuals who are driven by an irrepressible desire to work as one towards a common goal in the truest sense of team spirit. However. 2006). declining number of public payphones. For example LankaBell¶s request to utilise CDMA technology was approved only in 2002 after a long hold. Mission "To lead in the provision of technology enabled connectivity touching multiple human sensors and faculties. quick supply.Exhibit 3: Turnover of Mobile and Fixed line Operators Source: TRCSL Some of the reasons for slow growth can be aggregated to decisions taken by TRCSL. Suntel faced a similar problem and they were allowed to use the technology only in 2004. The tariff rebalancing permission. affordable initial price (prepaid systems). The fixed line private operators were restricted to wireless operations putting the wire-line exclusivity on SLT and the operations of international telephone services were solely vested on SLT. opening up of new market segments (war-torn areas) due to peace building efforts etc. given to SLT at privatization for five consecutive years added the situation to a further deterioration by the regulator. quality of mobile services in Sri Lanka appears to be low because some operators have been insufficiently capitalized to maintain network capacity in the face of rapid demand (Asoka. competition among operators. shortage of fixed line supply." . and through the delivery of quality service and leading edge technology unparalleled by any other. Vision To be the undisputed leader in the provision of multi-sensory connectivity resulting always. Again discriminatory type responses by TRCSL have led to slow growth in the sector. competition in the mobile sector is positive for a number of reasons such as. responsive and flexible business processes. in the empowerment and enrichment of Sri Lankan Lives and Enterprises. expansion of coverage. through committed adherence to customer driven. constant improvements in mobile phone technology.

Information System. Sales Marketing and Support Services. competitive resilience and quality of empowered resources. consumer first choice and ownership of heart and mind share of Sri Lankan consumers The achievement of leadership in term of management practices. Business and Finance. The deliverance of the best product in the market place through leadership in customer service. The primary role of an SMC is to provide strategic and operational leadership in all functions of the Company. brand recognition. product quality. internal strengths. and financial market recognition as the highest valued mobile communication operator in Sri Lanka. through adaptation of best practices and the active pursuit in new business in which corporate strengths could be exploited in the interest of growing the value of the company y y y Culture Dialog Telekom Organization culture can be summarized as a performance-driven culture.Corporate Values y y y y y y Total commitment to our customers Dynamic & human centered leadership Commitment to task & team work Uncompromising integrity Professionalism and accountability Foremost concern for respect & care Organizational Goals y The deliverance of industry best return on investment to the shareholders of the company. Organizational Structure The operations of the Company are managed through a faculty of Strategic Management Committees (SMC). Achievement of leadership in terms of (economically) effective subscriber base. Technology. focused on the delivering of corporate targets within the core functional areas of Service Delivering. provision and adaptation to emerging technologies and convergence with the internet. . where good work result in more work and more rewards and benefits.

Executive Director Non . Planning and Development General Manager .Network Operations and Fundamental Network Coordination Head . Regulatory Affairs.Executive Director/Chairman Executive Director/Chief Executive Non .Engineering Operations and Information Technology General Manager .Customer Service .Executive Director Senior Management y y y y y y y y y Director / Chief Executive Chief Financial Officer General Manager .Executive Director Independent Non . Management Information Systems and Enterprise Risk Management General Manager .Corporate Planning. Administration and International Business / Company Secretary General Manager .Executive Director Independent Non . Corporate Development.Engineering.Sales and Marketing Head .Board Of Directors y y y y y y y Non .Legal.Executive Director Non . Quality Systems.

Network Planning Head .Corporate Planning and Quality Management Products & Services Dialog Telekom product and services are distributed across the following business areas.Information Technology Head .Human Resources Management and Development Head .y y y y y Head . As a GSM Operator apart from Call Origination and Termination.Corporate Finance and Internet Business Head . y y y y y y y y y y y Call Diversion Call Conferencing Missed Call Alert Call Hold Call Waiting Voice Mail CLI IDD Roaming SMS Star call In addition as referred in the following diagram. Dialog provides various value added services for it's customers. Mobile Dialog entered in to Sri Lankan market as the first GSM (2G) operator of South Asia and currently they have launched the 3G Technology again as the first operator in the South Asian region. Dialogs mobile telephony portfolio tries to make a right balance between prices against provided products and services. .

Global Dialog acts as a global operator providing the following services to the global market. Dialog received the ability to work as a transmission and communication operator. y y y y International call Terminating. y y y GPRS (mainly an enhancer of the core GSM service Dialog Offers) WiFi Solutions.ISP Dialog Internet was launched in 2001. Dialog provides services in the following areas using their ISP backbone. Dialog SAT . formerly known as MTT. Broadband After acquiring Dialog Broadband (Pvt) Ltd. This enabled them to provide customer specific voice. In addition to act as a Internet Service provider. data and video solutions using their country wide transmission backbone. Web Billing. International call Originating. Transferring (switching) Global IPLC.

which implies that they balance their core business case with community needs. There are four dimensions of strategic CSR thrust at Dialog Telekom to which all these CSR initiatives can be categorized into. named as Dialog . Their CSR initiatives are applied within a local context. values and ethics across economic. Based on the wide spectrum of consumer segments addressed by the Company. y The first ever research lab for Telecommunication Technologies Research opened at the University of Moratuwa. cultural and traditional boundaries. several rewards/loyalty programs have been designed with specific focus on key segments. Few of those are. y Business Integral CSR which challenges Dialog Telekom to integrate CSR in business planning and decision making. They also embed CSR across fundamental business processes internally and as well as external project oriented CSR such as Social Investments and the Company Change Trust Fund initiatives. social. Technology for CSR to create services and products with high social value y y y There are so many successful and effective CSR projects that have been initiated by Dialog Telekom. y y y Star Point scheme Club Vision/Priority customer Nexus Points Operations Coporate Social Resposibilities Corporate Social Responsibility (CSR) is a culture by itself for Dialog Telekom that drives them on visioning to empower all Sri Lankans equitably. plan and believe.Dialog SAT technology provides access disregarding the location and this was implemented as an integration of Thuraya and Dialog Technologies. integrating resources.University of Moratuwa Research Laboratory. Rewards Programs Dialog Telekom supports a comprehensive portfolio of customer rewards programs focused on rewarding customers for loyalty and continued usage of Dialog Telekom services. It is integral part of their business in whatever they do. . Corporate Philanthropy which is channeled through the Change Trust Fund Action Oriented CSR which spans within local communities in times of need and disaster.

GSM World Award 2002 2002 GSM in the Community Award on Wireless Accessibility for SMS 112. creating a virtual classroom. GSM World Award 2001 2001 GSM World Award for the idea behind the Change Trust Fund initiative.y The Disaster Management Centre. GSM World Award 2003 2003 GSM in the Community Award on Best Use of Wireless in Emergency Situations for Dialog¶s blood appeal. Regulation and FDI: Sri Lankan Telecommunications Industry Case Analysis . and is compliant with the internationally accepted alerting protocol ± CAP. a SMS based emergency call facility for the hearing and speech impaired. is currently piloting Sri Lanka¶s first mass alert early warning system. y y Few awards that Dialog Telekom has received in recognition of the CSR initiatives are. internships and soft skills development to prepare these scholars for a position of community leadership and service. It can be used to issue customized alerts to selected recipients instantaneously. and transmits alerts through the GSM network. together with Dialog Telekom Limited. A teaching studio has been established at the ministry specifically for the purpose. The Digital Bridge enables lectures conducted at a central location to be transmitted live to remote schools. which would be used for charity. matching and donor management system Reference Rohan Samarajiva & Anupama Dokeniya with Sabina Fernando. As an entirely non-commercial exercise Dialog partnered with the Ministry of Education to build the Digital Bridge. The Disaster and Emergency Warning Network (DEWN) uses GSM communication technologies and devices. Dialog Telekom Limited has identified a great opportunity to use its infrastructure and core competencies to bridge the divide in level of education between the urban and rural areas. a unique system where Dialog post-paid customers are given the opportunity to donate half a percent (0. they support interaction between the scholars and their employees.5%) of their monthly bill up to a maximum of SLRs. Regulation and Investment: Sri Lanka Case Study (Report on the World Dialog on Regulation) Asoka Fernando (2006). which facilitates mentoring. and for the teachers and students to interact. Shan Manikkalingam & Amal Sanderatne (2005). 25/= with the company matching the contribution. The Dialog scholarship program go beyond the short-term gain to develop the intellectual capital of Sri Lanka¶s future leaders.

Next the external environment of Dialog Telkom has been analyzed based on PESTEL factors and Five Forces Model. Dialog Telekom has clearly defined vision. in the empowerment and enrichment of Sri Lankan Lives and Enterprises Mission . Vision To be the undisputed leader in the provision of multi-sensory connectivity resulting always. a mobile satellite service. the company provides international services. Finally all levels of strategies have been recommended together with programs required to implement those. It starts by giving a basic overview of Dialog Telecom Limited. The company also provides Internet services through Dialog Internet . supporting an International Gateway infrastructure providing retail and wholesale international voice and data services under the brand name of Dialog Global. Dialog Telekom Limited is a subsidiary of Telekom Malaysia International and a member of the Telekom Malaysia Group. All these are used to perform the SWOT analysis to derive strategies to be developed to suit Dialog Telekom¶s environments keeping alive its objectives. Introduction Dialog Telekom Limited is the largest mobile operator in Sri Lanka with over 3 Million subscribers representing over 60% market share in the mobile communication sector. In addition to its core mobile telephony business. It also includes evaluation steps required to assess the success of strategy implementation in Dialog Telekom and how controlling can take place.Dialog Telekom Limited Executive Summary This is a case analysis for Dialog Telekom Limited. Dialog Telekom is also the largest listed company on the Colombo Stock Exchange in terms of Market Capitalization with a market capitalization (as of 30 September 2006) of SL Rs 161 Billion.a fully-fledged Internet Service Provider (ISP). Then the internal environment analysis gives a view of its resources. mission. Dialog Telekom also operates Dialog SAT. based on the strategic management perspective. corporate values and goals as given below. its operations and performance. structure and processes while financial analysis included in the same shows the current standing of the company in terms of financials. the Premier Mobile Telecommunication Company in Sri Lanka.

Also recent past it has acquired CBNSAT. product quality. internal strengths. provision and adaptation to emerging technologies and convergence with the internet. business and functional levels. through adaptation of best practices and the active pursuit in new business in which corporate strengths could be exploited in the interest of growing the value of the company y y y some more needed to be added Internal Environment Analysis 7S model has been used as a primary tool to analyse the internal environment Strategy Dialog strategies are visible in the company's corporate. responsive and flexible business processes. and DERANA TV Channel with . competitive resilience and quality of empowered resources. The deliverance of the best product in the market place through leadership in customer service. and financial market recognition as the highest valued mobile communication operator in Sri Lanka. consumer first choice and ownership of heart and mind share of Sri Lankan consumers The achievement of leadership in term of management practices. and through the delivery of quality service and leading edge technology unparalleled by any other. brand recognition. a sattelite TV transmission company. Achievement of leadership in terms of (economically) effective subscriber base. They have already diversified their business across many areas during the last few years. For instance. through committed adherence to customer driven. by acquiring MTT.To lead in the provision of technology enabled connectivity touching multiple human sensors and faculties. spurred by an empowered set of dedicated individuals who are driven by an irrepressible desire to work as one towards a common goal in the truest sense of team spirit Corporate Values y y y y y y Total commitment to our customers Dynamic & human centered leadership Commitment to task & team work Uncompromising integrity Professionalism and accountability Foremost concern for respect & care Organization Goals y The deliverance of industry best return on investment to the shareholders of the company. Dialog managed to strengthen it's transmission backbone.

These technology initiatives can be considered as a strategy used to capture the market by effectively saying ahead from the competition in the technology and innovation sphere. because it effectively enabled Dialog to provide tailor made solutions to the local market. Nokia phones with Sinhala language support and Tsunami warning system for mobiles are just to name a few such examples. Structure The Company¶s business and operations are managed under the supervision of the Board of Directors comprising of five (5) non executive directors and one (1) executive director. On the other hand. In addition to reach the customer. The progress of each project is monitored in a monthly basis through different strategic committee meetings. Dialog tries to introduce latest technologies into the market considering global mega trends (refer diagram) through it's comprehensive Research & Development wing. The business plan is formulated at the beginning of the year considering main objectives of the company. Cargills-Dialog alliance to allow Cargills customers to settle Dialog bills is just one such example. Divisional structure can be identified in company level but performances of the divisions are measured through different strategic committees. the Dialogs initiative to setup the Dialog Research Lab at the University of Moratuwa is of importance.along term objective of a value chain convergence. Among them. The Board has the power to appoint executive directors including the CEO. Dialog has created many alliances with other business corporations. Systems .

Used for human resource management and all the day to day functions are carried out through this system. Seven percent (7%) of the total HR cost is devoted to training and development. Skills Dialog team consists of number of individuals with distinctive capabilities and competences from top to bottom. CCBS (Customer Care Billing system) ± Currently existing billing system is going to be migrated in to a new system to provide more customer centric services. HRIS . The core policy on filling vacancies spells out the Company¶s intention to attract the best with the aim of exploiting the individual¶s potential while providing career development opportunities irrespective of communal or gender differences. Annual manpower planning and recruitment is carried out in parallel with the business plan preparation. different ethnics and nations are teamed up and driven towards a common set of goals and objectives at Dialog Telekom. get-together. y y y SAP ERP (Enterprise Resource Planning) ± This was launched in 2006 January to integrate identified key process in the company . All the employees will have a number of recreational opportunities such as trips. The capabilities required by potential employees are based on the requirements of the business plans applicable to respective departments of the Company in any given year. Superordinate Goals All individuals with different backgrounds. The company has been successful in focusing the entire team towards a single vision by incorporating all individuals¶ goals and personal objectives together. Strict deadlines are imposed while performance and progress are very closely monitored at all levels of the organizational structure. Rewards and benefits schemes are in line for the top performers and better achievements. sports«etc to take some time off from busy work schedules. Style The management style always depends on targets and objectives. Dialog uses several systems to execute their business strategies successfully. Staff The Company currently employs a workforce of 2500 who in turn are considered pivotal to the organization¶s growth and success. Dialog is proud to have a very energetic and talented CEO in the caliber of .Apart from the technical back bone. The training needs for individuals and teams are identified from the competency requirements arising from the Company¶s business plan and employees¶ annual performance review. For instance. Recruitment to the Company is governed by several policies.

During the past two decades. due to political direct intervention. terrorist activities have remained constant as well. However TRCSL encourages local research and development. literacy rate is high. The country also has an educated and trainable work force. The country comparatively has not performed well enough to adapt technological changes on a timely manner. The fall of the exchange rate over the years happened on a gradual pace. The attitude towards foreign direct investments needs to be improved. the country as a whole and specifically the industry has not grown as it was foreseen at the time of liberalisation. For example the shift from analogue to digital and the adoption of CDMA technology materialised in a slow pace. In addition to that Dialog is served by a team of top class individual in the Sri Lankan Industry with lot of talent and exposures. Nevertheless Sri Lankans inherit a bureaucratic attitude from the colonial administration that results in inefficiencies and discrimination. Ecological . Economical Unstable macro economic environment and trade policy regime has a negative impact on the industry. infant mortality rate is low and life expectancy is long. Financial Analysis External Environment Analysis PESTEL Political Sri Lanka has very positive foreign investment policies. However Sri Lanka lags dynamics incorporated by India to attract foreign direct investments.Dr Hans Wijesuriya. Technological Sri Lanka depends on technology transfers from foreign direct investments. though Sri Lanka identified importance of liberalisation early as in 1977. Since the inception of liberalisation policy it has undergone massive reforms in this sector. However. bureaucratic attitudes inherited from colonial reign and poor governance. Socio-Cultural Sri Lanka has better social conditions for example.

they are able to keep certain segment of buyers tied to them. Five forces Threat of New Entrants The most awaited fifth mobile operator license for Sri Lanka has been awarded to AIRTELL.Legal TRCSL. It ensures fair enforcement of Government policy. However people are very cost conscious. Bargaining Power of Buyers In Sri Lanka buyers/customers are not strong as compared to customers in Western countries. inefficiency and discrimination. However TRCSL has been criticised over the years for information asymmetry. However as per TRCSL there will not be any further licenses issued which creates an entry barrier for any others to the market. The number of customer groups to protect themselves is almost non-existing in the Sri Lankan context. As there are four other operators and switching cost is negligible. Lankabell and Suntel are the substitute telecommunication providers which one can go for if he/she is looking at connectivity without mobility (eg. Bargaining Power of Suppliers . This is quite evident from the demanding nature of customers in the Western countries. and provide feedback to the policy making units. particularly with the award of CDMA licenses. standards and support are comparatively not major concern if they exist to a basic level. for home usage). bargaining power of buyers will increase. fixed line communication operators (SLT. Hence quality. hold operators accountable for performance. address consumer issues. Suntel & Lankabell) create the substitution effect. However this is still a smaller market as compared to the total market. buyers tends to go for the lowest rates. Threat from Substitutes In strict Mobile Telecommunication sense there is no substitute technologies like VOIP over wireless which is popular here in Sri Lanka. monitor changing industry needs. India¶s largest mobile operator. as such when switching costs are fewer. With this the threat of competition increases. However in general. SLT. the regulatory body takes up multidimensional roles. But with the increasing number of Value Added Services (VAS) provided by Dialog Telekom.

RingIN Tones. Dialog Telekom does not own a national backbone hence has to depend on local providers. 8. With this the bargaining power of upstream providers (eg. The diversity of the rivals in the industry is another factor. Sri Lanka being a small country with a comparatively smaller number of data/voice users the traffic generated is quite low. 5. With numerous collaborations with other Telecom Corporations. MTT and few other VSAT operators who have direct access to the national back bone. Telekom Malaysia Group. Also the amount of investment for the new services as well as expanding the coverage and capacity is quite high. Content Providers for VAS and peering partners are high. which reflects how it stands apart from others due to above factors. 4. 3. . It is only a few like SLT. They have a variety of Value Added Services like Star Call. e-Channeling via mobile. This is also another differentiator which gives Dialog Telekom the competitive edge. Greater CSR involvement. Photo Technica & D-Services are to name a few. These are becoming popular among the users and most operators provide only basic services. Relationship with a telecommunication giant in the region. 7. while most other operators compete on rates and coverage. reflected via the CSR initiatives that has taken place. has enabled Dialog to have a global reach with services such as High Roaming and Satellite Coverage.There are suppliers both local as well as international for Dialog Telekom in various operations it performs. 2. As reflected in the financial analysis the financial stability of the organization with all the current investments. Push N Talk. SWOT Analysis Strengths 1. there are few factors which have given the edge to Dialog Telekom over others. specially International ISPs). Strong Public Relations that has been built up over the years. Hence Dialog has surpassed all the mobile operators as well as it has gained more subscribers than incumbent SLT. Rivalry among Competing Firms Even though the competition is high in the Sri Lankan mobile communication market. The product and service characteristics offered are different to most other operators. As such Dialog Telekom competes on value addition and differentiation. Hence these suppliers are quite powerful and certain suppliers are indirectly competitors as well. Aggressive marketing strategy allowing Dialog brand name to be carried to every corner of the country and hence to have a good and stable Brand Equity. For this reason Dialog Telekom has recently acquired MTT and now it is part of the group and operates as a subsidiary known as Dialog Broadband Network. has a greater competitive advantage. For network connectivity back haul is critical. 6. As the first mover of GSM in Sri Lanka technology. Strong infrastructure and hence the mobile telecommunication coverage is one of the widest and best in Sri Lanka.

Threats 1. Lack of pricing innovations compared to the competitors. Employee turnover is high in the front-office (Call Centre and Help Desk). 7. 7. Technology advancements especially in the realms of mobile multimedia technologies and the advent of the next (3rd) Generation of mobile communications. MMS. The 5th Mobile operator license in Sri Lanka has been offered to India's Bharti Airtel Ltd to launch the 2G and 3G services in 2007. Decreasing trend in Quality of Service due to the rapidly growing customer base. Greater level of customer satisfaction via high quality customer support. All 3 existing CDMA service providers too pose a different kind of threat. Intelligent network services. is one of the fastest growing sectors in Sri Lanka¶s 19.9. 6.5 million users have mobile phones as at end 2006. 14. GPRS/WAP. Potential to reap benefits of Value Chain Convergence. 12. Extended breath of product range. 3. 4. SMS. EDGE. Decreasing level of motivation of internal employees due to multiple strategies of very high impact being deployed simultaneously without managing the resulting confusion and disillusionment. 10. Skilled and dedicated Management Team 16. High level of corporate business knowledge retention through low employee turnover (exception is the front-office staff). Weaknesses 1. All 3 other existing GSM Mobile service providers pose a threat at different magnitudes. 5. The strategic partnership with Vodafone UK. . 11. 3. 2. 15. 13. 5. Low fixed line penetration. Boosting company image through investors confidence reflected via share prices. Continuous development of the communication industry. 4. The acceptability of the Value Added Services (VAS) by the users hence increasing the probability of success of any new VAS initiative. Distributed nature of the Head Office in the city of Colombo due to non-expandability of current location. 6. Strong island wide distribution network. IVR«. No Clear focus for a broader market even though there is a huge investment on advertising and value addition through technical innovation. 3. 2. Telecom. Technology leadership with high technical innovation. 2.etc. This is powered by there Applied Research & Development initiatives in areas such as GPRS. Opportunities 1. Poor performance as an ISP. Well established customer base.5 million people and the Central Bank estimates that 4.

) 5.4. 7. In concentration Dialog Telekom can follow the vertical growth strategy to take the benefit of the value chain convergence opportunity that is existing in Sri Lankan context. Uncertainty due to the escalating counter terrorist campaign. The first alternative will move Dialog Telekom further away from the competition and create a monopoly temporarily for converged industries of telecommunication. content & media and retail. ‡ Stability strategy to continue with current activities without any changes to the direction would be the second alternative. 8. It can use this time to stabilize the organization due to the changes took place due to multiple strategies it adopted earlier such as acquisitions and investing on innovative developments. the Mobile wing of fixed line telecom giant SLT is focused on cost-leadership competitive advantage strategy through its low cost pre-paid product to the mass market. And after some time they can adopt their long-term beneficial value chain convergence option depicted in first alternative. ‡ Growth strategy to expand the activities of Dialog Telekom further would be the first alternative. which will help to get back the loosing internal employee motivation. Due to customer awareness the rapid change in customer preferences and their growing needs. The second alternative will give Dialog Telekom and its employees much needed breathing space. The recommendation would be to implement the second alternative initially to stabilize the organization without any other drastic change in the direction. Here Dialog Telekom can utilize pause/proceed with caution strategy to have only incremental improvements while the weaknesses stated are overcome. Strongest Competitor. social and economical conditions and the laws and regulations and their interpretation (Eg : TRC regulations) 6. For instance Dialog had to switch off all base station in northern province during the last few months due to military operations by the Sri Lankan government forces. 9. the Key Success Factors and the SWOT analysis the directional strategy alternatives would be as follows. However unfocused highspeed growth to capture the market without stabilizing the existing acquisitions can disassemble everything. Strategic Alternatives & Recommendations Corporate Strategy Considering the current performance. Changes in technology. Since the current product lines have real growth potential concentration of resources on those would be ideal. Changes in currency exchange rates and high inflation which is badly effecting the global business. (Remember more than 80% of Dialog subscribers are low income prepaid users. Business Strategy . Volatile changes in the political.

hence they cannot be applied directly to Dialog Telekom's other strategic business units like DBN and CBNSAT. most ideal should be to have culmination of both differing from the segment of the market. The recommended alternative depends on the competitive scope in this situation. This can improve the customer loyalty and thereby can charge a reasonable premium rate than competitors. Popular Food Chains etc. Currently they have stated this with some banks and some supermarket chains as mentioned above. But people who are using purely as a voice/SMS only are shifting as most of them are cost conscious and there is no much of a different in coverage. There should be new packages to attract new customers as keeping existing customers who require basic voice .. Competitive scope is an important factor when considering competitive strategies. Mobitel. Considering both alternatives and there pros and cons of each. The second alternative which Dialog Telekom can try to implement is cost leadership to overcome the threat of lower rates provided by competition. y The first alternative for the competitive strategy would be to improve on the current strategy of differentiation. Hence if Mobitel improves on its VASes it would become a serious threat. It can improve this by having unique value added services for each of its current strategic business units DBN.The business strategy alternatives available for Dialog Telekom to improve the competitive position in the industries it operates would be as follows. Since the VAS are less in Mobitel the switching from Dialog to Mobitel is not much in urban people who use these VASes. Simultaneously Dialog Telekom should look at strategic alliances as a corporative strategy to gain competitive advantage by working with other organizations. Stock Brokers. However this can be vastly improved to include alliances with Insurance Companies. CBNSAT and Dialog Telekom itself. y Typically the differentiation strategy is more likely to generate higher profits than low-cost strategy. Functional Strategy Most of these functional strategies are developed considering Dialog Telekom operations. However differentiation strategy implementation may involve higher investment than low cost strategy. Functional strategies based on the strategic choice of corporate and business strategies should be as follows. y The Marketing strategy currently followed by Dialog Telekom should be slightly modified to accommodate the business strategy of cost focus. Dialog Telekom should have a focused differentiation strategy in the market where people are valuing the VASes and cost focus in the market where usage is purely for voice/SMS. at which stage it would be only the rates which decides the attraction of that segment of the market.

Hence if applicable.& SMS. This is mainly because there is no major distinctive and/or core competencies of Dialog Telekom in the above areas. R&D/Technology strategy is critical for its performance. copyrights and other legislative means. This will be mutually beneficial to both the parties. DBN and CBNSAT. y Dialog Telekom should not do any changes to there current Financial strategy as they are going to have pause/proceed stability corporate strategy. 1st level Call Center operation etc apart from the already outsourced operations like cleaning and transportation. Dialog Telekom being a technological leader. y y y y y y Implementation Evaluation & Control . Dialog Telekom is known for its quality innovations due to their high emphasis on Research & Development. The Information Systems developed should be aligned with corporate and business level objectives. more efficient and effective operations flow with all business units. The current Information Systems strategy should also be changed to handle enterprise ICT development in much more strategic level. This requirement has arisen from the recent expansions and acquisitions. Dialog Telekom should aggressively follow these protective legislations. Also change management would be required in creating a common culture among Dialog Telekom. Apart from this Dialog Telekom should outsource certain operations such as legal. This product/package development for the existing market can be supported by improving the current ³pull´ marketing strategy for advertising and promotion. It should review its programs and procedures to suit the new stabilizing corporate strategy. Advertising. IS/IT infrastructure support. It should improve on its current team based working environment to self-managing work teams which is more suited for an organization where rapid growth is anticipated in future. The Human Resource Management strategy is another key functional strategy for Dialog Telekom. Hence they could further improve there financial stability as there are no major growth strategies to be implemented. They should further improve R&D capabilities by having strategic alliances with their major technology vendors. The Operational strategy of Dialog Telekom should be streamlined to have a common. This is because most of these vendors are the pioneers in developing latest technological developments. However these precious research and their development work needs to be protected by patents. And also there should be an integrated approach among business units as much as possible.

2. Inflation has reached more than 20%. 2. Porter's Five Forces Analysis 3. Terrorism & counter-terrorism Economical 1. Educated and trainable work force. Technological 1.Risk averse. Low infant mortality rate Long life expectancy. . SWOT Analysis Slide : PEST Analysis Political 1. Socio-Cultural 1.Conclusion Presentation Slides Slide : External Environment Analysis 1. Poor adaptation of technologies in a timely manner . 3. The gradual fall of the exchange rate over the years. High literacy rate. TRCSL encourages local research and development. bureaucratic attitudes and poor governance exists 3. 3. 5. inefficiencies and discrimination exists. 2. Positive foreign investment policies. 4. 6. 2. Sri Lanka depends on technology transfers from foreign direct investments. political direct intervention. Better social conditions than other developing countries. However. 2. Legal 1. Telecommunications Regulatory Commission of Sri Lanka (TRCSL). Unstable macro economic environment has a negative impact on the industry. Ensures fair enforcement of Government policy. Bureaucratic attitudes. 3. PEST Analysis 2.

Push N Talk. Fifth mobile operator license awarded to AIRTELL. Threat from Substitutes 1. Value Added Services becoming very popular among the consumers. RingIN Tones. 4. Photo Technica & D-Services. Bargaining Power of Suppliers 1. 5. 4. Hence these particular suppliers are very powerful. Customers are very cost conscious. Bargaining Power of Customer (Buyer) 1. Monitor changing industry needs. 2. 2. However as per TRCSL. e-Channeling via mobile. Switching costs are low.3. Alternatives are fixed line and the more recent CDMA connectivity. Addresses consumer issues. there won't be any more licenses awarded. 3. Quality. SWOT Analysis . standards and support are comparatively not major concerns if they exist at a basic level. Local & International Suppliers for Dialog Depends on SLT. However this is still a smaller market as compared to the total market. VAS examples: Star Call. Acquisition of MTT and the creation of the new subsidiary known as Dialog Broadband Network. 4. 3. MTT and a few other VSAT operators to access the national backbone. Five forces Threat of New Entrants 1. This creates an entry barrier for any others to the market. 3. Dialog has an edge because of their VAS & differentiation strategy and the huge customer base. Consumer protection groups are almost non-existing. 3. 2. Rivalry among Competing Firms 1. 4. 3. 2. 5. Very minimum. Compared to Western countries. Hold operators accountable for performance. and provide feedback to the policy making units. 2. Very high competition with continuous price/coverage wars. customers are not very strong in their demands.

ISP woes. Confusion. Real Estate Issues. 3. 5. 6. 4. High Employee Turnover . Strong Island Wide Distribution Network. Strong Infrastructure. Weaknesses 1. 2. 3. Competition. 3. Alliances and Global Coverage. 7. Economical. 2. Technology Advancements Threats 1. 6. Value Chain Convergence. Strategic Partnerships. Wide Product Range. 4. Skilled and Dedicated Management Team. 5. Slide 3 Slide n Appendix . 5. Lack of Focus for a Broader Market. Telecom.Front Office Gap in Quality of Service Against Growing Customer Base.Strengths 1. 8. 2. Lack of Pricing Innovations Against Competitors. Technological & Legal Spheres. 2. 7. 4. First Mover of GSM Technology in Sri Lanka. Low Fixed Line Penetration. Well Established Customer Base & High Quality of Customer Support. Strong Public Relations & Greater CSR Involvement Technology Leadership through Applied Research & Development. 3. Aggressive Marketing Strategy & Stable Brand Equity. Volatile Changes in the Political. 9. Managing Customer Expectations. Disillusionment & Decreasing Motivation of Employees. The acceptability of the Value Added Services (VAS). Social. 6. a Fastest Growing Sector in Sri Lanka. 4. Opportunities 1. Terrorism & Counter-Terrorism.

Appendix A: Financial Statements .

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