This action might not be possible to undo. Are you sure you want to continue?
Assignment 3: Market Strategy For Teletalk
M.Des 1.1 Name: Harshal Desai Lecturer: Dr Kelvin Lee Date of Submission 9/30/2011
Word Count: 4405
TABLE OF CONTENTS Executive Summary .................................................................. 3 Teletalk Pvt. Ltd. ........................................................................ 4 Spice Mobile .............................................................................. 5 P.E.S.T.E.L. Analysis .................................................................... 6 Political Trends ........................................................................ 6 Economic Trends .................................................................... 7 Social Trends ........................................................................... 9 Technological Trends ............................................................ 9 Environmental Trends .......................................................... 10 Legal Trends .......................................................................... 11 Market Research .................................................................... 12 Market Dynamics ................................................................. 12 Competitive Landscape .................................................... 14 Macro-Economic Outlook .................................................. 15 S.W.O.T. Analysis ................................................................... 16 Strategic Proposal .................................................................. 17 Tactical launch plan ........................................................... 17 Products and services ...................................................... 18
Pricing ................................................................................. 18 Brand Communication AND ADVERTISING ................... 23 Sales and distribution channels ...................................... 23 Contingency plan................................................................ 24 Conclusion ............................................................................... 25 Works Cited ............................................................................. 26 APPENDIX ................................................................................. 28
With the Telecommunication sector booming in Nepal, the industries compete in terms of introducing new features and cheaper costs of mobile handsets. The market is nearly saturated with cell phones ranging from prices of Rs 2000 to Rs 65000, catering to all types of consumers. The overall economy is still quite low with nearly 25% of the nation living below the poverty line and a vast majority of the people earning a bare minimum of $1500 annually. While reducing the price of mobile handsets is one strategy, it is not a truly effective one. Our report focuses on examining the Nepal market in depth, analysing the political, economic and social trends, researching on an average consumer and eventually giving out a more effective holistic solution. Based on our research, we aim to increase market revenue for Teletalk and expand their consumer base, and at the same time, create new job opportunities in the market to contribute towards the betterment of the country’s economy.
TELETALK PVT. LTD.
Teletalk is a fast growing Telecommunication and IT Company in Nepal. It is also a licensed supplier of BlackBerry, Spice and Colors handsets in the Nepal market, the latter being an in-house brand, and functions through several retailers set up across the country. The current supply chain network has allowed Teletalk to venture into CDMA mobile handsets in Nepal. They have a strong business ties with trader bases in China namely Lenovo, Konka, Inventec Appliances for obtaining mobile handsets and other accessories for Nepal market. Teletalk works with both CDMA and GSM telecom operators in Nepal, exploring possible corporate opportunities, and provides the operators with feedbacks and recommendations to strengthen the industry and keep up with the global technology. The firm is associated with one of the country’s leading telecommunication organisations, Nepal Telecom that has a customer range of 4.02 million subscribers. (Teletalk: Company Background) Teletalk’s vision is to manufacture, deal and supply quality mobile handsets and service for telecom and IT sector in the country. They intend to revolutionize the market with their superior telecom services and venture into new quality electronic and telecom products. With integrity and honesty at the heart of their business, they are determined to attain distinction in Nepal. (Teletalk: Mission & Vision)
Spice Mobile is a global organisation and one of the leading mobile handset brands in the Indian market. With over 30 years of experience, they have built few of Asia’s most successful joint venture partnerships in innovative technologies. They were the first Indian company to market high-end printing systems, manufacturing 3.5” floppy disks, setting up private telecom services, launching a handset for less than Rs.1000 ($24.5 SGD), another first in creating a dual mode handset and recently launching India’s first 3D cellphone. Their brand promise is to deliver quality and use their intelligence and familiarity to discover innovative means to revitalize the market and delight people by providing them reasonable value for their services. (Spice: About Us) Teletalk launched Spice Mobile in the Nepal market in mid-2008. It rapidly grew in the market offering mid and premium level mobile phones. Teletalk imports these handsets from India and has currently brought over fifty models in the Nepali market. (Teletalk: Spice Mobile)
Before recommending any market recommendations, we need to
investigate at the current trends in the Nepali market.
These will provide
better clarity on the overall telecommunication market and allow us to compare whether Teletalk is keeping pace with current trends or has fallen behind.
In 2004, the government introduced open licensing and restructuring of the Nepal Telecommunications Corporation as part of its Poverty Reduction Strategy. Global firms received trade prospects including provision for infrastructure to set up an expanded GSM network and to install a new CDMA network. Nepal has been a difficult market due to political instability, having gone through 15 governments in the last 14 years, and subjected to an eight year long “People’s war” launched by Maoist insurgents in February, 1996. This affected the speed of globalization and Nepal fell back in the race. While the government is open to foreign investments, the bureaucratic suspensions, disorganisation and widespread exploitation delayed implementation of these policies. (Zita, 2004) Apart from inconsistent government policies, foreign companies need to factor in the political risks during the eight-year-old Maoist insurgency as many organisations, specifically from U.S. were often extorted and faced intimidation threats. (Zita, 2004) The political instability still exists as the Nepali public felt like “the government is at best, useless”, stating that the politicians are obsessed to achieve power, forcing the public to make their own arrangements to supply homes with water, electricity, to fix the local roads and maintain the drain pipes. The public tends to favour the private sectors rather than the government. This
realization came during January 2011 when political candidates were more concerned about the vacant Prime Minister’s seat rather than preparing for a potentially devastating earthquake. (Panday, 2011) To sum up, due to the disorderly political segments it is hard for businesses to stick with the plans within the specified period. Thus, the bureaucratic systems of the government greatly hamper the growth of the service sector.
Nepal's gross domestic product (GDP) for 2008 was assessed at USD $12 billion making it the 115th-largest economy in the world. Nepal is isolated from the world’s major land air and sea routes, having just one main airport in Kathmandu. Their ideal trade route is by road from India and the only possible entry by sea is via Kolkata. Currently India is Nepal’s largest foreign investor and trading partner, greatly increasing the potential market and development of the telecommunication sector in Nepal. Internally, there is a lack of a developed road system, with 22 out of 75 districts lacking road links. This makes it difficult to distribute products within the country. (Zita, 2004) Nearly 86% of the population still lives in rural areas and depends on agriculture as their primary source of income, though only 20% of Nepal’s terrain is suitable for growing crops. (Rai, 2004) A long-standing economic treaty reinforces a close affiliation with India. The country obtains foreign relief from India, Japan, the UK, the US, China, Switzerland, and Scandinavian countries. Poverty is severe in the country with the per-capita income being roughly USD$1,000. (CIA World Fact Book : Nepal Economy) On the fiscal side, the government commenced numerous transformations on revenue utilisation, including the introduction of an income disclosure scheme and execution of a performance-based encouragement system for tax officers. This resulted in 32% growth and was the first time income tax
collection exceeded customs revenue. External grants also expanded up by 70% as donors supported Nepal during the political transition. A majority of this money was directed towards raising salaries and wages of civil servants and security forces, while the remaining was invested in the IT and Telecom sector (Acharya, 2010)
Figure 1: Revenue Indicators in 2009 1
The gross national income (GNI) based on Purchasing Power parity (PPP) ranks Nepal as the 30th country with the lowest GNI, with the comparable average income of a Nepali citizen being USD$1471 annually. (Nations Online: Countries by Gross National Income) Most of Nepal’s economic trends have the lowest percentage worldwide. Almost 40% of its population have no access to healthcare and education; nearly half the children under the age of five are malnourished; 38% of the population is living below the poverty line earning barely Rs 150($4 SGD) a day. With little to no access to proper education, science or technology, the literacy rates in the country are low at only 53.7%, although these do not include literacy in Information and Communication Technologies (ICT). (Zita, 2004)
Image retrieved from http://www.adb.org/documents/books/ado/2010/NEP.pdf
Socio-cultural trends consist of various class, structure, principles, morals, social institutions, etc. Nepal has a multicultural society, with the dominant religion being Hinduism at 81%, Buddhism at 10.7% and other minorities at 8.4%. (Zita, 2004) The telecom industry must take note of the socio-cultural environment for expanding its policy and strategy. Socio-cultural environment influences the demand and supply of goods and services, particular mobile handsets as new features at a cheaper rate are in constant demand. The most auspicious festival is the Dashin Festival or Durga Puja Festival, which lasts for a total of 15 days. It is the ideal time for new market strategies to be implemented as the festival attracts many Nepalis all over the world to come back and celebrate with their families in Nepal.
Nepal Telcom has suffered from years of administrative uncertainty. Since there was only one operator, the Nepal Telecommunications Corporation (NTC), the lack of competition prevented expansion of basic mobile services. There was one line per 1000 people in the rural regions with over 60% rural districts having no telecommunication service whatsoever. In contrast, Kathmandu had 21% telecommunication services with an estimated future demand for 290,000 lines, which was much more than what the suppliers could provide. (Zita, 2004) By early 2007, the NTC and the other private operators set up aspiring objectives for network expansion, aiming to attain a penetration percentage of 20% in 2010. By end of 2009, the total telephone penetration had reached 30% having over 7.6 million mobile subscribers. Fixed line growth remained slow, having just 3% increase in market penetration by 2010.
Despite the mobile handset growth, there was a substantial difference between the high coverage levels in the cities and in underdeveloped rural areas. However, the minimum basic access was made available to most of the rural area with only 306 out of 3914 villages lacking telecom services. To keep up the pace with future demand, it is estimated that Nepal needs to invest around US$135 million in the telecommunication sector. (Evans, 2010) Internet facilities are still inactive, with user penetration at a total of 2% in 2010, and broadband facilities are virtually non-existent. People seem to be favouring mobile wireless technology more over the fixed lines. (Evans, 2010) Recently the Nepal Telecommunications Authority (NTA) initiated a study measuring the feasibility of 4G technology in Nepal. This would allow faster data transfer speeds and superior quality video conferencing options. 4G technology can allow users to surf at an internet speed of 100Mbps while current telecom operators provide only 3.4Mbps under the 3G networks. NTA Chairman Bhesh Raj Kanel stated the study is at a preliminary stage and their team is reviewing data from other countries using 4G technology. Once the analysis is complete, the final report will be submitted to the Radio Frequency Policy Determination Committee (RFPDC) where they will take necessary action and meet with the respective stakeholders. (NTA starts study on 4G technology, 2011) ENVIRONMENTAL TRENDS
At the 18th session of the United Nations Commission on Sustainable Development, an official from Nepal stated, “The management of waste has become further challenging with the increase in hazardous waste as the situation becomes more complicated, confronting the continuing and worsening effects of electronic waste” (Pradhan, 2010) Nepal had expressed a Solid Waste Management Bill in 2008, which provided instructions for handling and categorizing solid waste types. However, it was specifically silent about electronic waste management.
Also, the country is highly vulnerable to bad climate, intensive rainfalls, increasing intensity of floods, glacial lake outburst, dry spells etc. Not only do these hazards cause damage and loss to human lives, they also hamper development of the country. According to (Pradhan, 2010) “ Going by the current rate, in ten years’ time it can be projected that more than two million Nepali people will be using computers and the internet. In addition, more than 25 people per 100 or 7.5 million Nepali people will be using mobile phones by 2020.” A typical mobile phone is disposed quite rapidly as new, better and cheaper models flood the market routinely, with mobile phone users changing their handsets roughly every six to twelve months. According to information available, a typical personal computer has three to five years of good use before it needs to be replaced, upgraded, or completely discarded. One can imagine how much e-waste mobile phones will generate in a decade or so. Nepal needs to quickly adapt its current policies to include the role of ICTs in a sustainable development and set up a separate division for electronic waste to monitor and maintain the process.
Nepal had developed two liberal policies and authorized framework for the Telecommunication sector: - the National Communications Policy in 1992, and a Telecommunications Act in 1997 that established the Nepal Telecommunications Authority (NTA). A new draft was adopted in early 2004 to remove the restrictions on investment and accelerate a broader market opening. The policy introduced a multi-service and multi operator environment and to liberalise the telecommunication sector completely so that it can be open for new operators without limitations. It also commercialized the NTC, reducing the government ownership, being restructured to keep pace with the increasing demands. (Zita, 2004)
As of 2011, the country’s population was roughly 29 million, out of which only 18 million people had a source of income. The agriculture work force constitutes 75% of this labour with industry and services being the remaining 25%. Nearly a quarter of the population is below the poverty line. (CIA World Fact Book : Nepal Economy) With an average income being roughly $1500 annually, the cost of living expenses in Nepal is shown below:
Figure 2: Distribution of cost of living expenses in Nepal2
Based on the statistics, an average consumer spends only 11.6% of the $1500 or approximately $175 on other markets, which fall in our category. As of December 2010, there are only 841,698 subscribers for fixed line telephones whereas mobile handset subscribers range at 9.19 million. Nepal Telecommunications is leading with 5.11 million subscribers and Spice Nepal Pvt. Ltd, which is rebranded to NCell Pvt. Ltd, has a market penetration of 4.08 million subscribers. (Federation of Nepalese Chambers of Commerce and Industry: Industrial Factor Costs , 2010)
Image retrieved from http://www.numbeo.com/cost-of-living/country_result.jsp?country=Nepal
Teletalk Pvt Ltd rapidly expanded its market by providing quality mobile handsets to middle and lower-middle class individuals at a much cheaper rate than their competitors provide. Since Spice cell phones are widely popular in India, the brand carried enough recognition to be purchased by the local Nepal Population. Sanjay Agrawal, director of Teletalk Pvt. Ltd. stated there is a vast market for the mobile phone industry in Nepal as people living in the rural regions have begun embracing the new mobile technologies that help them be connected and increase business ventures. TeleTalk is the first cell phone company in Nepal to introduce Indian mobile phones in the Nepal market and to introduce both CDMA and GSM handsets to consumers. Teletalk supports three major brands, namely, Spice mobile phones that are priced between Rs 2,200 to Rs 25,000 with sales growth rising at an annual rate of 15%, while handsets by Colors are available in the range of Rs 2,100 to Rs 10,000, with sales growth rising at a 5% annual rate. HTC handsets cater towards businesspersons and high-income people, priced between Rs 17,000 to Rs 55,000. (Teletalk: Bringing mobile Technology to Rural Folk, 2010) Recently Teletalk introduced a new scheme in conjunction with their new Colors X-9 mobile phone. These scheme gives you a cash offer on every X-9 cell phone purchase, along with a scratch coupon with a potential to win up to Rs1000. It will be valid only through the Dashain Festival and will end on 1 st November. (Teletalk Dashain Offer, 2011)
Current competition among the telecommunication operators is based on wider network coverage, a variety of prepaid service plans, GPRS facilities, increasing purchasing power of people by reducing costs of mobile handsets etc. Rival telecom operator NCell, has already revealed its strategy of wanting to upgrade their networks to 4G once the government grants the licensing. Ncell is asking for frequencies ranging from 700-2600MHz for this service. NTA currently has recommended WiMax(Worldwide Interoperability for Microwave access), a protocol that can allow up to 40Mbps and is awaiting the committee’s decision on frequency allocation for the service. (NTA starts study on 4G technology, 2011) Phones have also become a status symbol in Nepal. For the people, flaunting stylish expensive phones gives them confidence while meeting and talking with others. They consider an expensive phone flaunts the success they have attained in life. Nokia recently sold two of its most luxurious cell phones in the Nepali market, the 8800 series, at Rs. 100,000 each. The features of these models are out-dated by modern standards, but it is the sapphire studded joystick and a titanium casing that boosted the price. While those who use cell phones purely as a means for communication don’t see any difference between a plastic joystick and a sapphire one, for some men mobile phones are akin to what gold or diamond jewellery are to women. As new phones enter the market with latest technologies, with an added demand for style, the resources used in developing the phones and the money invested into giving them a luxurious look are increasing the average market price. (Republica: Business and Economy, 2009)
Nepal’s macroeconomic stability is sustained over the past few years, but the recent global crunch is has slowed down the progress of Nepal’s economy and exposed its structural weaknesses. Increasing fees and cost have resulted in growing foreign exchange investments despite the lacklustre export performance. Recently, however, international capitals have dropped considerably due to a slowdown in transfer of funds and accelerating imports partly because of continued rapid credit growth in the second quarter of 2009/10. (Sharma) Nepal currently faces issues of increasing inflation. The annual average consumer inflation has increased by 13% in 2009. Secondly, the high rate of unemployment and loss of trade has set back the standard of living in many districts. The ultimate goal of a government should be to generate economic growth that favours the public. The macroeconomic complications are sure to give rise to cost of living at the household level unless the short-, medium- (Three Year Plan under preparation) and long-term policies are prepared based on professionally acceptable economic forecasting. (Pyakuryal, 2010) While the country’s potential is quite high, progress is delayed due to poor business climate, power shortages, infrastructure needs, weak governance and difficult employment associations. These issues need to be addressed immediately. (Sharma)
Strengths Caters to all classes, lower, middle and upper class. Wide range of handsets available from Spice Dual-Sim Handsets Average price range of Rs 2000- Rs15000 Associated with the NTA, has over 9 major service centres across Nepal. Introduction of new Colors Handsets every 4-6 months. Opportunities Assembling Spice phones in Nepal Introduction of instalment plans Promoting in-house brand, Colors Expanding cell phone variety in in-house brand to reduce import costs Eco-friendly initiatives 4G expansion Better promotion offers than competitors in terms of pricing. Setup cellular service at Mt Everest.
Weaknesses Customer complaints about terrible network service (Towers or New Services?, 2010) No licence to distribute Nokia, Sony Phones Limited options for the Niche market
Threats Rival company already developing strategies for 4G technology. Difficulty introducing new features, product saturation imminent.
TACTICAL LAUNCH PLAN
We are proposing a business strategy to increase market share of Teletalk and simultaneously benefit the public and the government by boosting the country’s economy and creating new job prospects for the people. The strategy involves setting up an assembly base for Spice Mobiles in Nepal, having just the spare parts imported from India, and selling them at a low interest rate on a 12-month instalment plan so mid-range phones are available to the lower-middle class target audiences. We are choosing Spice Mobile over Colors because of its wider brand awareness and diverse product range.
PRODUCTS AND SERVICES While this strategy can be applied to mid-level phones of all ranges, for sake of clarity our data focuses on the absolute low end and a middle price range of cellphones, costing Rs 2000 and Rs 5000 respectively. Importing just the spare parts allow greater quantity of parts to be traded into the country. This also decreases the cost in terms of tax by an estimated 40% since it is cheaper to export spare parts rather than the complete product. By establishing an efficient assembly building, the sector introduces new job prospects within the industry, increasing employment rates. It would also boost the repairing service since people are more aware of the construction of the product. This would create an higher overall revenue in the market The phones would be sold at a 12% interest from the current market rate, however the money could be paid in a twelve month instalment. This allows the lower-middle class ability to afford mid-range cellphones.
The following figures have been derived from the Federation of Nepalese Chambers Of Commerce and Industry, with a copy of the Industrial Factor costs report attached in the appendix for reference.
Current Population of Nepal is 25,000,000, out of which 18,000,000 people have a net income above the poverty line. Approximately 500,000 are using Nepal Telecom while 400,000 use the rival company Ncell. This still leaves 9,000,000 people who can be potential targets as our secondary market. For implementation of our scheme, first we would need to look at the industrial area and construction costs to set up an assembly division in Kathmandu. We have picked Kathmandu since it is the primary trade city of Nepal.
COST OF OVERALL ASSEMBLY LINE
COST OF INDUSTRIAL AREA 5400 SQ.FT
CONSTRUCTION COST ( APPROX RS.1300 P.SQ.FT X 5400 SQ.FT)
TOTAL COST OF INDUSTRIAL AREA AT 5400 SQ.FT
Table 1:COST OF ASSEMBLY LINE (SOURCE: APPENDIX POINTS 1 & 2)
In a 5400 sq.ft. plot, we can accommodate 450 employees, giving approximately 10 sq. ft. space for each employee, with the remaining amount excluded due to construction of walls, pillars etc. By creating a job opening for 450 people, their annual salaries would be differentiated according to skill level. Teletalk will also provide a 30% bonus p.a. (assumed estimate) to boost employee morale and to generate interest in the brand. Based on these estimates, the total salary cost for employees is:
AVG SALARY P.M.
TOTAL SALARY P.A 495,000 1,190,000 460,000
BONUS 30% P.A. SALARY
TOTAL COST OF LABOUR INCLUDING BONUS 643,500 1,547,000 598,000
HGHLY SKILLED SKILLED UNSKILLED
100 250 100
4,950 4,760 4,600
148,500 357,000 138,000
Table 2: SALARY COSTS OF EMPLOYEES (SOURCE: APPENDIX POINT 5)
Let us assume that the company wants 10% profit on the manufacturing cost of the mobile phones and the total sales demand from both, existing subscribers and new consumers (Total consumer target: 9,500,000) is 200,000 mobile handsets per year, with a majority being sold at Rs 2000. instalment scheme and profits made without using the instalment scheme. We conducted a comparison analysis between profits made while using the
WITHOUT INSTALMENT SCHEME
NO. OF HANDSET MADE P.A
COMPANY COST PER HANDSET RS
PROFIT 10% PER HANDSET RS
RETAIL PRICE PER HANDSET RS
TOTAL COST PRICES P.A. Rs
TOTAL RETAIL PRICE P.A. Rs
HANDSET AT RS. 2000 HANDSET AT RS.5000
270,000,00 0 225,000,00 0
300,000,00 0 250,000,00 0
495,000,00 550,000,00 0 0
Table 3: PRICE STRUCTURE WITHOUT INSTALMENTS
Now, considering the 12-month instalment scheme, if Teletalk charges 12% interest p.a. on the existing retail price of the mobile handset, the overall cost structure changes to :
WITH INSTALMENT SCHEME
NO. OF HANDSET MADE P.A
COST PER HANDSET
PROFIT 10% PER HANDSET
RETAIL PRICE PER HANDSET
12% INTEREST ON RETAIL PRICE
TOTAL RETAIL PRICE PER HANDSET
TOTAL RETAIL PRICE P.A.
RS HANDSET AT RS. 2000 HANDSET AT RS.5000 150,000 1,800
Table 4: PRICE STRUCTURE WITH INSTALMENTS
To calculate the total net profit, we factor in the manufacturing costs and annual salaries from our data. We also estimate 10% additional cost for insurance for employees in case of accident at the workplace. Based on the Industrial factor costs report, we estimate the industrial bank loan to have 10% interest rate (Appendix point 10), and another 10% to serve as commercial/industrial insurance in case of earthquakes, fire hazard, riots etc. Water and electrical charges are also assumed from the report at their maximum value (Appendix points 3 & 7) along with transportation charges from Mumbai (Appendix point 8) since Mumbai is the leading trade city in India. Since there is always a chance of damage to products or wastage, we estimated a further 10% cost on manufacturing the handsets.
This gives us a final net profit comparison of
WITHOUT INSTALMENT TOTAL RETAIL PRICE P.A SUBTRACTING COSTS: COST OF MANUFACTURING ANNUAL SALARIES INSURANCE FOR EMPLOYEES INTEREST ON INDUSTRIAL 10% ON RS 11,220,000 COMMERCIAL/INDUSTRIAL INSURANCE 10% WATER CHARGE P.M RS. 25000 ELECTRIC CHARGES P.M RS.50000 TRANSPORTATION CHARGES P.M RS. 100000. DAMAGE/WASTAGE 10%TOTAL COST OF MANUFACTURING -495,000,000 -2,788,500 -278,850 -1,122,000 -1,122,000 -300,000 -600,000 -1,200,000 -49,500,000 -495,000,000 -2,788,500 -278,850 -1,122,000 -1,122,000 -300,000 -600,000 -1,200,000 -49,500,000 550,000,000 WITH INSTALMENT 613,000,000
Table 5: NET PROFIT COMPARISON
In conclusion, using the instalment scheme, Teletalk can earn an estimated net profit of Rs 61 million in their first year of business.
BRAND COMMUNICATION AND ADVERTISING Teletalk Pvt Ltd would be the first company to sell their Spice Mobile Handsets on a 12-month instalment basis. The company, under the NTA, already has nearly 5.1 million subscribers. Still approximately 9 million consumers are not using any form of mobile communication. By using the 12-month instalment program, our primary consumers would be interested to purchase a higher quality cell phone, and the potential secondary market would get an incentive to purchase newer models at a lesser cost than provided by the competitors. The scheme could be introduced after the assembly setup is completed, which would take roughly six to twelve months depending on the speed of construction. If we assume a maximum of twelve months, then the scheme could be introduced at an opportune moment during the next Dasain Festival in October 2012, which is the most auspicious festival in the Nepalese annual calendar. During this time, people often return from different parts of the world to celebrate the festival together in their country. The instalment plan would serve as an ideal gift during this fifteen-day festival. SALES AND DISTRIBUTI ON CHANNELS Current sales and distribution channels could remain as they are since the market penetration through the channels is providing a satisfactory result. Research would need to be undertaken in order to find out estimated demand of the handsets under the instalment scheme to check if the distributors can handle the quantity of the orders. In the event that demand rises beyond amount of distribution, then there would be a need to set up additional sales and distribution centres across the city in the form of smaller retail outlets.
In the event that the 12-month instalment plan does not appeal to the mass market, additional schemes could be implemented to further entice the target consumer. One such scheme could include group purchasing where a family or a group of friends can get 10% discount on the retail price under the instalment plan should they purchase a mobile handset together. This would especially be successful during the festival as it is a common occurrence to provide gifts for an entire family. Another scheme could be a good faith policy where if the instalments are paid within the allotted time then the final month payment receives a refund of Rs 100, which is still affordable and does not consume too much of the company’s profits, and at the same time, makes the consumer happy. There would be instances where consumers may stop paying altogether due to numerous circumstances. To prevent a loss, countermeasures could be placed within the phone, effectively locking the SIM card similar to T-Mobile in the USA. The instalment plan could also be backed up by a bank, ensuring that if the consumer does not pay up the charges, the amount will be undertaken by their bank. However, based on current projections, even if the instalment scheme does not work, Teletalk still makes enough profit just by setting up an in-house assembly line for Spice Mobile handsets.
By successfully penetrating the market with this new offer, Teletalk should boost up market revenue, and follow their vision to revolutionize the Nepal market with superior telecom services. The reduced cost of expenditure, in terms of importing parts, could be used by the government to invest in other sectors such as land development, military, architecture etc. Setting up just one assembly chain opens up roughly 450 job prospects. By having a network of assembly chains across the country, the number can greatly increase giving even unskilled workers an opportunity to work on a decent job with insurance and bonus plans. The knowledge of the IT and Telecom sector would improve since Teletalk is actually manufacturing the Spice mobile phones. This has potential to increase more service centers, further increasing job growth. By adopting this strategy, Teletalk could effectively slash their competition and commendably contribute towards a part of the solution for the economic instability within the country. It would open the market to many more consumers and significantly increase the overall GDP of the telecommunications industry.
Republica: Business and Economy. (2009, April 20). Retrieved September 28, 2011, ls&news_id=3573 Federation of Nepalese Chambers of Commerce and Industry: Industrial Factor Costs . (2010). Retrieved September 28, 2011, from Fncci.org: http://www.fncci.org/indicator.php Teletalk: Bringing mobile Technology to Rural Folk. (2010, August 25). Retrieved September 28, 2011, from Myrepublica.com: http://archives.myrepublica.com/portal/index.php?action=news_detai ls&news_id=22534 Towers or New Services? (2010, April 06). Retrieved September 28, 2011, from TechSansar.com: http://techsansar.com/nepali-it/towers-or-newservices-what-are-nepalese-telecom-operators-up-to-1412/ NTA starts study on 4G technology. (2011, May 26). Retrieved September 28, 2011, ls&news_id=31696 Teletalk Dashain Offer. (2011, September 21). Retrieved September 28, 2011, from The Himalayan Times: http://www.thehimalayantimes.com/fullNews.php?headline=Teletalk+ Dashain+offer&NewsID=303444 Acharya, Y. (2010). Economic performance of Nepal. Retrieved September 28, 2011, from ADB.org: http://www.adb.org/documents/books/ado/2010/NEP.pdf CIA World Fact Book : Nepal Economy. (n.d.). Retrieved September 28, 2011, from CIA.gov: https://www.cia.gov/library/publications/the-worldfactbook/geos/np.html from Myrepublica.com: http://archives.myrepublica.com/portal/index.php?action=news_detai from Myrepublica.com: http://archives.myrepublica.com/portal/index.php?action=news_detai
Evans, P. (2010, October 01). Nepal - Telecoms, Mobile, Internet and Forecasts. Retrieved September 28, 2011, from Budde.com.au: https://www.budde.com.au/Research/Nepal-Telecoms-MobileInternet-and-Forecasts.html?r=51 Nations Online: Countries by Gross National Income. (n.d.). Retrieved September 28, 2011, from NationsOnline.org: http://www.nationsonline.org/oneworld/GNI_PPP_of_countries.htm Panday, K. (2011, January 14). What now? - Geopolitical Instability in Nepal. Nepali Times, pp. 1-2. Pradhan, K. (2010). 2010 - ICTs and Environmental Sustainability. Retrieved SEptember pdf Pyakuryal, B. (2010, January 21). 2010: Nepal's Macroeconomic outlook. Retrieved September 28, 2011, from Nepalieconomy.blogspot.com: http://nepalieconomy.blogspot.com/2010/01/2010-nepalsmacroeconomic-outlook.html Rai, T. (2004). Mobile and Fixed Wireless Communication Technology in Nepal. New Mexico: Magnus Consulting Group Pvt. Ltd. Sharma, R. (n.d.). The Rising Nepal: Challenges, Opportunities before NRB's Governer. Retrieved September 28, 2011, from Gorkhapatra.org.np: http://www.gorkhapatra.org.np/gopa.detail.php?article_id=32515&ca t_id=7 Spice: About Us. (n.d.). Retrieved September 28, 2011, from Spiceglobal.com: http://www.spiceglobal.com/Corporate/AboutUs.aspx Teletalk: Company Background. (n.d.). Retrieved September 28, 2011, from Teletalk.com.np: http://teletalk.com.np/company-background/ Teletalk: Mission & Vision. (n.d.). Retrieved September 28, 2011, from http://teletalk.com.np/mission-vision/ 28, 2011, from giswatch.org: http://www.giswatch.org/sites/default/files/gisw2010countrynepal_en.
Teletalk.com: http://teletalk.com.np/spice-mobile/ Zita, K. (2004). Nepal Telecom Brief. USTDA South Asia Communications Infrastructure (pp. 1-10). New Delhi: Network Dynamics Associates LLC.
The following is a partial report for Industrial Factor Costs from the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). The full report is available on the FNCCI website at : http://www.fncci.org/text/ind_fact.pdf
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.