Internship Report for Mobilink

Submitted By: Usman Ali BBA-6(B) 01-111052-094

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Table of Contents
1 2 EXECUTIVE SUMMARY...................................................................................... ..........................3 . INTRODUCTION..........................................................................................................................5 . 2.1 2.2 3 CENTRAL BACKGROUND INFORMATION.................................................................................................. .........................5 COMPANY BACKGROUND..................................................... ..................................................................................6 .

COMPANY ANALYSIS...................................................................................................................8 . 3.1 OPERATION ANALYSIS...........................................................................................................................................8 . 3.1.1 Network............................................................................................................................................. ........8 3.1.2 Operational Departments.................................................................................................... .....................9 3.1.3 Subscribers and Market Share..................................................................................................... ...........10 3.2 FINANCIAL ANALYSIS.................................................................. ........................................................................11 . 3.2.1 Operational Results............................................................................................................................. ....11 3.2.2 Balance Sheet Results...................................................................................................... ......................12 3.2.3 Ratio Analysis...................................................................................................................................... ....12 3.3 HUMAN RESOURCE ASSESSMENT............................................................................................................................14 3.4 MARKETING ANALYSIS......................................................... ...............................................................................15 . 3.4.1 Electronic Media.................................................................................................................................. ....15 3.4.2 Print Media............................................................................................................................... ...............16 3.4.3 Advertising Agency and Brand Ambassadors........................................................................................16 .

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ENVIRONMENTAL ANALYSIS................................................................................. .....................18 . 4.1 INDUSTRY AND MARKET ANALYSIS...........................................................................................................................18 4.1.1 Major Product Lines Market Segment....................................................................................................18 . 4.1.2 Growth Rate of Entire Industry..............................................................................................................20 . 4.2 COMPETITOR ANALYSIS........................................................... ............................................................................21 . 4.2.1 Major Competitors................................................................................................................................. ..21 4.2.2 Their Market Shares....................................................................................................................... .........23 4.2.3 Their Goals and Strategies................................................................................................................... ...24 4.3 TECHNOLOGY ANALYSIS.......................................................................................................................................26 4.3.1 Technical Methods That Affect the Industry............................................................................................ 6 2 4.3.2 Innovation.............................................................................................................................. .................27

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DEPARTMENT WORKED DURING INTERNSHIP................................................................ ..............28 5.1 ACTIVITIES DONE WITHIN CASH MANAGEMENT DEPARTMENT............................................................................................28 5.1.1 Daily Activities................................................................................................................... .....................28 5.1.2 Occasional Activities................................................................................................................. ..............29 5.1.3 Month End Activities.......................................................................................................... .....................30 5.2 TASKS PERFORMED DURING INTERNSHIP....................................................................................................................31 5.2.1 Daily Activities................................................................................................................... .....................31 5.2.2 Occasional Activities................................................................................................................. ..............32 5.2.3 Month End Activities.......................................................................................................... .....................33

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IDENTIFICATION OF A MAIN PROBLEM AND FINDINGS.................................................................34 6.1 JOB ROTATION
AND

ADVANCEMENT..........................................................................................................................34

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CONCLUSION............................................................................................................................34 . RECOMMENDATION...................................................................................... ............................35 . APPENDIX................................................................................................................................36 . 9.1 9.2 9.3 WEB RESOURCES.............................................................................................................................................36 REPORTS..................................................... .................................................................................................36 . ORGANIZATIONAL STRUCTURE (EXTRACT)..................................................... .............................................................37 .

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Table of Illustrations

Figures
FIGURE FIGURE FIGURE FIGURE FIGURE FIGURE 1: 2: 3: 4: 5: 6: COMPARATIVE FIGURES OF COVERAGE & CELL SITES......................................................... .............9 PRINT ADVERTISEMENTS OF MOBILINK..................................................... ................................16 PRODUCTS OFFERED BY DIFFERENT MOBILE COMPANIES.............................................................. ..19 GROWTH RATES IN MOBILE INDUSTRY 2005-JULY 2008.................................. ...........................20 SEGMENTATION OF TOTAL SUBSCRIBERS IN JULY 08................................................................. .....23 SEGMENTATION OF TOTAL SUBSCRIBERS IN DECEMBER 07................................................... ...........23

Tables
TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE TABLE 1: AN OVERVIEW OF MOBILINK’S NETWORK...................................................... ..............................8 2: NUMBER OF MOBILINK SUBSCRIBERS FROM 2005-JULY 2008.......................................... ...............10 3: MARKET SHARES OF MOBILINK FROM 2005-2007................................................. ....................10 4: PROFIT COMPARISON BETWEEN 2007 & 2006.............................................. ...........................11 5: BALANCE SHEET COMPARISON BETWEEN 2007 & 2006..............................................................12 6: CURRENT RATIO COMPARISON BETWEEN 2006 & 2007....................................................... ........12 7: FIXED ASSETS TURNOVER COMPARISON BETWEEN 2006 & 2007........................................ ............13 8: DEBT RATIO COMPARISON BETWEEN 2006 & 2007.................................................. .................13 9: RETURN ON COMMON EQUITY COMPARISON BETWEEN 2006 & 2007...............................................13 10: DESIGNATIONS OF MOBILINK’S EMPLOYEES........................................................ .......................14 11: LIST OF BRAND AMBASSADORS OF MOBILINK........................................................ ....................17

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1 Executive Summary
The mobile industry of Pakistan has seen phenomenal growth in recent years. The total mobile subscribers in 2007 were more than 63 million, a growth of more than 80% from the previous year. The telecom sector of Pakistan was deregulated in 2003, and mobile industry being a part has seen phenomenal growth ever since. Many analysts believe that Pakistan is one of the fastest growing telecom markets in the world. Currently there are six diverse companies making the mobile industry of Pakistan, Mobilink being one of them. Other companies include Ufone, Telenor, Warid, Zong and Instaphone. Mobilink enjoys being the market leader with a 36% market share as of July, 2008. Pakistan Mobile Communications Limited (PMCL) launched its operations in August 1994, under the brand name of Mobilink. Initially it was a joint venture between Motorola and the Saif Group. Later on in April 2000, Orascom Telecom bought 38.6% stake in PMCL, later increasing it to 68.69%. In April 2001, Orascom Telecom took over management control of the company and as of December 31st, 2007, Orascom Telecom owns 100% of the share capital of Mobilink. Mobilink offers both postpaid (Indigo) and prepaid (JAZZ) solutions to their customers. Mobilink was awarded a 15-year license in July 1992 to establish and operate a digital cellular telecommunication system using the GSM 900 standard. Mobilink has been growing its network ever since, providing 2G, 2.5G, GPRS and EDGE compatibility. 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. Pakistan Mobile Communications Limited (PMCL) or Mobilink is currently headed by President and CEO Zouhair A. Khaliq. Mobilink’s headquarter is located in Islamabad and has eight different departments. All major decisions regarding Mobilink are taken centrally in Islamabad. To assist with the operations, operational departments are further located in all four regions, including north, south and AJK. Mobilink’s finances are as strong as its operations and customer base. For the year ended December, 2007, the total profit after taxation was more than Rs 4bn. Furthermore Mobilink’s fixed assets have shown a rise in 2007, so have the long term liabilities and shareholder equity. Mobilink being the market leader is also able to attract the most talented professionals. Its current employee force consists of more than 4500 unique individual. Mobilink hiring takes place through its website and is know for offering 4

competitive packages to its employees. Furthermore, it training and appraisal programs are an essential part of the HR department. Attracting customers is a tough job and that is why the marketing department of Mobilink develops a number of marketing campaigns to attract customers. Furthermore it also takes the help of a leading advertising agency of Pakistan and uses brand ambassadors from various walks of life to promote its products and services. The mobile industry provides three major product lines, which include the consumer packages, value added services and corporate packages. The consumer packages include the postpaid and prepaid packages; the value added services provide entertainment, information and a lot more to their subscriber, while the corporate packages have been introduced to cater to the needs of large businesses and corporate clients. The mobile industry of Pakistan has witnessed phenomenal growth periods over the years. As of July 2008, the growth rate of the entire industry was more than 40%. There are four major competitors of Mobilink. Ufone is the closest with a market share of 21% in July 2008, followed by Telenor with 20%, Warid by 18% and Zong by 5%. I did my eight weeks internship at the cash management department within Mobilink Treasury. Some of the work that I did during my internship includes making the cash position, making transfer letters, making encashment and international payments and working to open new accounts of Mobilink. The main problem that I identified during my internship period was the lack of job rotation within the department and not keeping up with the policies of job advancements. Some of the suggestions in this respect were the introduction of compulsory job rotation within department, introducing job specific training to employees and adhering to the criteria laid out by the HR department for job advancements in complete faith. Lastly I would say that Mobilink became the market leader by introducing new products and services that took full advantage of new technologies over the years and I hope that it will tend to do so in the coming future and provide stiff competition to any challenger that poses a threat to its leadership in the market.

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2 Introduction
2.1 Central Background Information
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% 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 20031. 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 direct European investment in Pakistan, setting precedence for further foreign investments in the telecom sector. In 2004, Warid Telecom International LLC,
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Daily Times July 27, 2007

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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 terminateddue 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.

2.2 Company Background
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 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 20083. Mobilink offers exclusively designed tariff plans that cater to the communication needs of a diverse group of people, from individuals to businessmen to corporates

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Orascom Telecom Annual Report 2007 PTA Website

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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.

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".

Mobilink's Values
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.

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.

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.

Respect for People
Our relationships drive our business. We respect and esteem our employees and all stakeholders. We believe in teamwork, empowerment and honor.

Corporate Social Responsibility
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
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Mobilink CEO Speaks About 2008 Plans (www.telecompk.net)

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3 Company Analysis
3.1 Operation Analysis
3.1.1 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 years5. 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, 20076.
Table 1: An Overview of Mobilink’s Network7

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Orascom Telecom Annual Report 2007 Orascom Telecom Annual Report 2007 Mobilink Website

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Not only is Mobilink’s network very modern and technologically advance, but it is also very competitive, when compared to other mobile networks.

Figure 1: Comparative Figures of Coverage & Cell Sites8

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Orascom Telecom Investor Presentation November 2007

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3.1.2 Operational Departments Mobilink is headed by President and CEO Zouhair A. Khaliq, who reports directly to the Chairman and CEO of Orascom Telecom Naguib Sawiris. Furthermore the operations of Mobilink are divided into eight different departments, which are as follows: 1. 2. 3. 4. 5. 6. 7. 8. Human Resource Administration and Security Sales Marketing Customer Services Corporate Affairs Technical 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. 2. 3. 4. North South Central AJK

3.1.3 Subscribers and Market Share 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: Number of Mobilink Subscribers from 2005-July 20089

Year Subscribers % Change

2005 7,469,085 -

2006 17,205,555 130.3

2007 26,466,451 53.8

July-2008 32,056,336 21.1

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
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PTA Website

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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 3: Market Shares of Mobilink from 2005-200710

Years Market Share Change

2005 51.4% -

2006 46.3% (5.1%)

2007 39.8% (6.5%)

3.2 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, 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. 3.2.1 Operational Results
Table 4: Profit Comparison between 2007 & 2006

Description Revenue
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December 2007 70,914,424,384

December 2006 In Pak Rupees 55,871,865,120

Orascom Telecom Annual Reports 2006-2007

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Profit Before Interest & Tax Profit Before Taxation Profit After Taxation

15,603,089,144 6,976,257,786 4,151,660,417

12,545,001,838 7,372,726,009 4,100,392,601

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 haveincreased 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. 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. 3.2.2 Balance Sheet Results
Table 5: Balance Sheet Comparison between 2007 & 2006

Description Fixed Assets Current Assets Current Liabilities Shareholders Equity Long Term Liabilities

December 2007 138,159,488,742 16,313,779,738 51,742,026,278 23,523,324,157 79,207,928,045

December 2006 In Pak Rupees 104,896,145,585 18,193,085,605 50,934,936,367 16,329,320,280 55,824,974,543

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.

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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 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. 3.2.3 Ratio Analysis 3.2.3.1Current Ratio
Table 6: Current Ratio Comparison between 2006 & 2007

2007 0.31:1

2006 0.35:1

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.

3.2.3.2Fixed Assets Turnover 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 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. 2007 0.51 2006 0.53

Table 7: Fixed Assets Turnover Comparison between 2006 & 2007

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3.2.3.3Debt Ratio 2007 84.7% 2006 86.7%

Table 8: 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. 3.2.3.4Return on Common Equity
Table 9: Return on Common Equity Comparison between 2006 & 2007

2007 17.6%

2006 25.1%

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.

3.3 Human Resource Assessment
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 15

Experienced Candidates

All employees at Mobilink are designated accordingly, which is as follows:
Table 10: Designations of Mobilink’s Employees

Grade/Employee Post Associate

Designation A-2 (Junior Associate) A-1(Senior Associate)

Description Entry Level/Fresh Candidates Min 2 yrs. Experience Required Min 4 yrs. Experience Required Min of 5-6 yrs. Experience Required Manager Senior Manager/HOD of

Specialist

S-2(Junior Specialist) S-1(Senior Specialist/Asst.

Manager

Manager) M-2 M-1

Sub Departments Director Departmental Head 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.

3.4 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.

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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. The major ways in which Mobilink markets itself and its products are through the following ways: • • Electronic Print

3.4.1 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. 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.

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3.4.2 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 2: Print Advertisements of Mobilink11

3.4.3 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 arena12. 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:
Table 11: List of Brand Ambassadors of Mobilink

Name Iman Ali
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Profession Model

Brand Being Promoted Jazz

www.brandsynario.com IAL SAATCHI & SAATCHI website (www.ialideas.com)

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Wasim Akram Vaneeza Ahmed Zainab Qayum Shan Strings

Cricketer Model Model Actor/Model Singers

Jazz Indigo Indigo Indigo Mobilink World

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.

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4 Environmental Analysis
4.1 Industry and Market Analysis
4.1.1 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. 4.1.1.1Consumer Packages 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 20

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.

4.1.1.2Value Added Services Value Added Services have become an essential tool for generating revenues for mobile companies today. Starting in the early years, from wallpaper and ringtones 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. 4.1.1.3Corporate 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.
Figure 3: Products Offered By Different Mobile Companies

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4.1.2 Growth Rate of Entire Industry 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 mould be even higher, if taxes would have not increased, in the financial budget. The mobile industry has seen phenomenal growth over the years, as seen below:

Figure 4: Growth Rates in Mobile Industry 2005-July 2008

As the above figure shows, the mobile industry saw phenomenal growth from 20052006. According to PTA, on average 2.3 million subscribers were added every month during 200607.

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 23

the crackdowns on SIM registration, rising taxes and the general economic conditions of the country.

4.2 Competitor Analysis
4.2.1 Major Competitors 4.2.1.1Ufone 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 futureoriented EnerG 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. 4.2.1.2Telenor 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.

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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 3rd 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 Semens for network expansion and services until 2009. The agreements will result in USD750 million worth of orders from Telenor Pakistan. 4.2.1.3Warid 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, 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. 4.2.1.4Zong 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 25

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 rebranded 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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4.2.2 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.

Figure 5: Segmentation of Total Subscribers in July 08

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).

Figure 6: Segmentation of Total Subscribers in December 07

4.2.3 Their Goals and Strategies 4.2.3.1Ufone 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 revoloved around U (its customers), which can be seen in its punch line or slogan “it’s all about U”. Furthermore, by accomplishing its 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 27

the first mobile company to stop charging for incoming calls, first to introduce GPRS, first to start bundle SMSpackages 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. 4.2.3.2Telenor 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 beingcreative, 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: EasyLoad, SmartShare, mobileTV, largest network of EDGE, PicShare, international packages like Djuice and many more. All these services are very creative, never been introduced before and helping all its customers around Pakistan. 4.2.3.3Warid 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
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As of July 2008 (PTA figures)

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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. 4.2.3.4Zong 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. 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.

4.3 Technology Analysis
4.3.1 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 firstgeneration cellular technology that usedseparate frequencies, or "channels", for each conversation. AMPS used considerably more computing power in order to select frequencies; however cell centers couldflexibly 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 29

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 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. 4.3.2 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 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 30

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 Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction of of of of of of of of of of of of dynamic SIM’s by Ufone GPRS capabilities of Ufone voice controlled services by Mobilink Bundle SMS packages by Ufone voice SMS by Telenor emergency credit buying by Mobilink dedicated website for downloads by Warid credit share by Telenor BlackBerry services by Mobilink mobile television by Telenor caller tunes by Mobilink 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 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.

5 Department Worked During Internship
I did my 8 weeks internship at the cash management section of the treasury department of Mobilink. The cash management section is one of the three sections of the treasury department. The organizational structure extract of the finance department can be seen in the appendix of the report.

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The importance of cash management is immense for a company, including Mobilink. If at any time a company fails to payoff an obligation when it is due, because of the lack of cash, the company is insolvent and insolvency is the primary reason firms go bankrupt. Efficient cash management means more than just preventing bankruptcy. It improves the profitability and reduces the risk to which the firm is exposed. At Mobilink, the main responsibilities of the cash management sections include the collection, concentration, and disbursement of cash. It includes its efforts of timely collection of income from its major sales centers and franchises. Revenues attained from international roaming partners are needed to be encashed efficiently as well. Furthermore, paying off the liabilities generated through daily operations and financing activities and finally developing short-term investment strategies for Mobilink. Some of the activities done within cash management are as follows.

5.1 Activities Done Within Cash Management Department
5.1.1 Daily Activities 5.1.1.1Opening Cash Position The opening cash position is created daily and contains the following sections: 1. Cash in hand: Contains the closing balances of all the major franchises and sales centre’s of Mobilink. It is added to identify the amount of money that would come into the bank accounts of Mobilink. There are more than 500 major franchises and business centres in this list. 2. Details: The details contain the major bank accounts of Mobilink. These include the major current and saving accounts in which major collection comes. There are more than 40 such different accounts. Furthermore some accounts are for specific purposes, for example MCB account is used to pay commissions for the franchises and NBP-Mirpur is used to pay the taxes in AJK. Furthermore different saving accounts pay different interest rates, Askari Bank with the highest of 13.65%. Other categories include the DSRA (Debt Servicing Reserve Accounts); these are used for debt servicing of long term loans. These are saving accounts, with the purpose of collecting money till the repayment amount is achieved, after which, as a part of standing instructions, the following collections are transferred to main saving or current accounts. Cash Margin Accounts, these are lien marked accounts for specific purposes like credit cards and different guarantees. Overdraft Accounts, these includes the number of accounts, with which Mobilink has overdraft facilities. Fixed Deposit Accounts, theses are the accounts with which Mobilink has some fixed deposits, if any. Short Term Loan Accounts, theses are the accounts used when Mobilink wants any short term loans. Foreign Currency Accounts, there is only one foreign currency account of Mobilink, which is with CitiBank and is used for off shore marketing expenses and international receipts. Sinking Fund Accounts, maintained by Mobilink, contains funds 32

3.

4.

5.

6.

that are set aside to pay the license fee, paid out to PTA and Utility Accounts, to pay utility bills of Mobilink are the other types of accounts. Liabilities: In this section, major liabilities for the month are recorded in the following categories: taxes, commissions, payroll, and repayment of loans, roaming partner’s payments, payments against Form M and Link Direct International (LDI), a subsidiary of Mobilink payments. The liabilities are updated as needed, with amounts; bank used for paying off and date of payment. Cheque Float: In cheque float, the major liabilities of different vendors are recorded. They are divided into three different regions, which include Islamabad, Karachi and Lahore. The intimidation of the cheque’s released comes from the accounts payable department, while the clearance coming from daily bank statements. All payments of vendors are made from CitiBank. LC and IC’s: This section includes the Import Contract (IC) and Letter of Credit (LC) payments that have to be paid out for the foreign transactions that take place with Mobilink. The intimation comes from the Trade department of Mobilink Treasury. The Main and Forecast summary: The Main Summary includes both the revenues and liabilities of Mobilink on a given day, while and the Forecast Summary is made for the current & following month.

5.1.1.2Cash Transfers The cash transfer take place every day and includes the transfer of collections and payment from and to different banks. The major collection of funds takes place in Allied Bank Limited, Habib Bank Limited, Standard Chartered Bank and United Bank Limited. These banks receive the most collection on daily basis but pay less interest, thus all collections from these banks are transferred to a bank that pays more interest, currently transferring to Askari Bank, as it pays a better interest rate of 13.65%. . Also transfer of collection funds from other banks can take place as and when required by Mobilink. Furthermore all transfer of funds for paying off liabilities take place from ACBL to the bank required. These transfers for paying off liabilities take place as required, and are not usually on daily basis.

5.1.2 Occasional Activities 5.1.2.1Encashment Occasionally, international roaming income is received by Mobilink from other cellular operators around the world. However as these receipts are in foreign currencies and are thus needed to be encashed, on an intimidation from the bank. Furthermore according to the SBP Foreign Exchange Policy, companies can only keep 35% of the total foreign exchange earned in their foreign currency accounts, the remaining 65% needs to be converted to PKR.

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5.1.2.2International Payments Furthermore occasionally Mobilink has to pay for international roaming charges to international cellular operators or other international payments, like paying for training activities for Mobilink employees. Payments can either be made by debiting the foreign currency account maintained with CitiBank or by debiting the PKR account and obtaining foreign currency exchange rate against that amount and paying off the liability. 5.1.2.3Account Opening As needed, the department will open new accounts with banks as needed, which could be for specific reason, for example the new HSBC overdraft account or just to facilitate the vendors or franchises of Mobilink. Furthermore requirements with current banking accounts are changed as and when required, including the interest rate offered, lien marked and overdraft facilities. Document required for account opening are as follows: 1. Account opening form duly signed by the CEO 2. Request letter on company letter head 3. NTN Certificate 4. Certificate of Incorporation 5. Memorandum and Article of Association 6. CNIC and Passport of all Board of Directors and Signatories 7. Signature cards signed by all signatories and stamped 8. Form 29 9. List of board of directors 10.Board resolution 5.1.2.4Credit Cards Mobilink provides corporate AMEX card to directors and above. Activities regarding credit card applications, their payments and limits enhancement etc are handled by the department.

5.1.3 Month End Activities 5.1.3.1Interest Income Sheet The interest income is calculated for those accounts that either pay interest semi annually or on the 1st of each month. There are total 8 banks in this list, including Bank Alfalah and NIB. Furthermore this includes the TDR’s booked by Mobilink. All this information is passed onwards to the accounts department of Mobilink. 5.1.3.2OD Sheet Mobilink takes on overdraft facilities daily from different banks, which gets off set from the collection, however sometimes it is not offset and remains outstanding. On the outstanding amount, interest payments are to be paid and are calculated at the

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month end and passed on to the accounts payable department. However the actual payments are made on quarterly basis while accrual is calculated on monthly basis. 5.1.3.3Calculation of Cash Flow Statement Cash Flow Statement consists of three major parts: 1. Capex (Capital Expenditures) 2. Opex (Operating Expenditures) 3. Financial Charges Revenue information is received from the revenue monitoring department (Finance Operations) bifurcating the total revenue earned form postpaid and prepaid connections. Average revenue earned is 7-8 Billion PKR. Furthermore information regarding financial charges is taken from the financing department of Mobilink Treasury.

5.2 Tasks Performed During Internship
5.2.1 Daily Activities 5.2.1.1Creating Opening Cash Position Updating the balances of the major current and saving accounts maintained by Mobilink, these include accounts maintained in CITI, DB ACBL, ABL, HBL, SCB, UBL, MCB, NBP, NIB, FBL and RBS. Furthermore balances are also taken of accounts from whom any payment may be due, to assess the funds, to be transferred on the next day. Some accounts are to be adjusted like SCB account is to be adjusted to the lien marked amount. Updating the cheque float, this includes adding new cheques released on that day. The information of the new cheques released, is received from the accounts payable department and then using the DB direct & CITI bank’s website to see the cheques that have been cleared from the CITI’s current accounts maintained in Islamabad, Lahore and Karachi. Furthermore, updating the cash in hand section as and when information is received. The information is received from the operations department within the finance department, and as the information of more than 500 franchises and sales centers is not easy to get daily, the information is only updated 2 or 3 times a week. 5.2.1.2Cash Transfers After calculating the amount of liability to be paid out from various banks on the following day, transfer letters are prepared to transfer funds to the bank in which they are required. Furthermore, all major collections, that comes from four major banks, which includes Allied Bank, United Bank, Habib Bank and Standard Chartered, is transferred to Askari Bank daily. The instructions for fund transfers are

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on the same day pay order basis and all instructions to the banks are forwarded through fax and then confirmed. 5.2.1.3Other Activities Filing the photocopies of the transfer letters that were faxed daily was another task that I performed. Furthermore original transfer letters were also needed to be sent out to the respective banks and also updating the payments file daily were some of the other tasks performed daily.

5.2.2 Occasional Activities 5.2.2.1Encashments As soon as Citi bank provides us with a notification on an encashment, a conversion rate is asked, to convert the 65% of the total amount to Pakistani rupee. When the bank provides us with the detail, an inward remittance rate sheet is made, which shows the total remitted amount, the 35% and the 65% amount of the amount, in both foreign currency and Pakistani rupee. Furthermore a letter to Citibank is also made, issuing them the authority to convert and transfer the 65% of the encashment into the account and also transferring the 35% of the amount to the dollar account of Mobilink. Lastly a Form R is made to notify the SBP that 65%of the total amount has been converted to Pakistani rupee, as stated by the foreign exchange ordinance of Pakistan and lastly all the above letters are attached, with the original notification letter and then sent to Citi bank to go through with the transaction. As part of my internship, I had to make all these letters and then send them to the bank. 5.2.2.2International Payments As stated earlier, international payments are made either on international roaming charges or international charges made by the different departments of Mobilink. As soon as our department receives the Payment Authorization Form (PAF), which is used for inter department expenditures and approvals, with the completion form and the original invoice, a payment order and a purchase requisition or the original invoice for non departmental expenditures, the department issues an letter to the bank for the payment, including the amounts and all banking details like the SWIFT No, beneficiary bank name and the account title. Furthermore a Form M is also submitted to bank, which gives them the authority to debit our PKR account and buy the foreign currency at a conversion rate agreed. These letters are then forwarded to the bank, for the transaction to take place. As part of my internship, I had to make all these letters and then send them to the bank.

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5.2.2.3Account Opening Mobilinkoften open accounts as to help out with operation, including, during my internship with Barclays and UBL. As a task, all the main items were provided to the banks. The main items provided to these bank included the Memorandum and Articles of Association, Letter of Incorporation, Board Resolution, Form 29, which shows tells about the director of a company and the NIC or passports of all the people in the board of resolution and NTN certificate. All these documents are attested by the company secretary of Mobilink and are provided to the bank, with the bank account opening form and request letter from Mobilink. 5.2.2.4Credit Cards Credit card of SCB AMEX are provided to all directors and above of the company and when they want to either increase their limits or wanted to give out advance payment s into their credit cards because they were going abroad, or any other expense, letter of authorization are sent to the Relationship manager handling the Mobilink AMEX card. These letters of authorizations are made after discussions with the HOD and his final signing of the letters. As part of my internship tasks, I had to make these letters of authorization.

5.2.3 Month End Activities 5.2.3.1Interest Income Sheet Each month all the banks to which interest was accrued are calculated. First all of the bank statements for the period are collected from the accounts department and then using the applicable rates, all the balances are added to the interest income sheet and the interest income is calculated. As part of my internship, I had to calculate the interest amount for the month.

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6 Identification of a Main Problem and Findings
6.1 Job Rotation and Advancement
The main problem that I have identified within the treasury 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 treasury 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 trade department is transferred to off shore financing because of shortage of employee. This learning should not be considered as a job rotation, because this shift is permanent for that given employee. 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.

7 Conclusion
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. 38

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%14. 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.

8 Recommendation
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. 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
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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’sand job advancements are a part of career growth. Furthermore, job advancement s will create future leaders for Mobilink.

9 Appendix
9.1 Web Resources
• Wikipedia (wikipedia.com) Articles used: ○ Mobilink ○ Ufone ○ Telenor Pakistan ○ Warid Telecom (Pakistan) ○ Paktel ○ China Mobile (Pakistan) Mobilink (mobilinkgsm.com) Pakistan Telecommunication Authority (pta.gov.pk) Ufone (ufone.com) Telenor (telenor.com.pk) Warid (waridtel.com) Zong (zong.com.pk) Orascom Telecom (otelecom.com) The News (thenews.com.pk)

• • • • • • • • • • •

9.2 Reports
Orascom Telecom Annual Report 2007 Orascom Telecom Annual Report 2006 Mobilink’s Balance Sheet and Income Statement15

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For internship report only, not to be copied.

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9.3 Organizational Structure (Extract)

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