Analysis of Sales and Marketing strategies in Pakistan Telecom Industry

Market Overview Of Mobile Companies in Pakistan With the monthly additions average around 2.5 million subscribers, 2007 has been a phenomenal year for the mobile market growth in Pakistan. Mobilink gained the most subscribers (5.45 million) in period 2007. Its market share has been decreasing gradually but thats expected with the increase in competition and telecom industry. At the top is Mobilink, the Pakistani unit of Egypt-based telecom company Orascom. It has been operating in Pakistan since 1994. Subscriber share is 35% at the end of Sep 2007. Telenor was the fastest growing company, 45% of their current subscribers (5.35 million) were gained this year. No doubt that Telenor has emerged as a strong contender. It took a small lead over Warid in March and has been able to maintain it. The rate of growth for Ufone has been impressive as well. It gained 5.32 million of the approx 20 million new subscribers in first 8 months in year 2007 in Pakistan. Paktel has been barely able to reverse the negative trend of subscriber losses. The Pakistan Telecommunication market reached the 90 million subscriber market in September 2008, almost double from 2006 numbers. The growth slowed after that and at the end of November 2008. The total mobile subscriber number was 90.5 million.

Mobilink
The major brand in Pakistan is Orascoms Mobilink, which as of April 2008 had a market share of 37 percent. Mobilink initiated operations in 1994, and for the longest time reaped the reward of being a first-mover in the country using GSM technology. Mobilink has remained innovative, and continues to be a pioneer in branding with its packages: The Jazz Prepaid and the Indigo Postpaid connection. Mobilink has tried to communicate an image of modernity and newness over the years, The brand immediately began by focusing on the customers, launching a campaign that culminated in consumers designing the brands initial logo. Ufone further refined its strategy by 2005 when, under the new ownership of Etisalat, it was re-launched with a new logo and a colorful campaign that targeted teenagers and the youth with its pre-pay package. This was also a reflection of the increasing competition from the likes of the Norwegian-based Telenor, and the UAE-based Warid Telecom. Mobilink sub-brand Indigo 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. Mobilink is the market leader and it is because of its strategies. Some of the strategies are as follow. 1. There are products which are catering to different segments like indigo for upper segment and jazz for middle segment etc. 2. The prices which they charge are also affordable according to the customers. 3. It aims to have the largest customer base and therefore providing services in maximum locations.

Mobilink, an Orascom Telecom Company, has selected Motorola to deploy a WiMAX 802.16e-2005 access network in Pakistan. According to the agreement, Motorola will design, plan, deploy, and optimize a WiMAX network for Mobilink. Motorola will also enable quicker adoption of the operators WiMAX offering by providing integration and support services as well as indoor and outdoor CPE (customer premises equipment). The late night call is also introduced by the Mobilink on which they charged 6 rupees per hour from 11pm to 7am.When Mobilink introduced that package, then their profit is increased upto 10% because at that time this package is only offer by the Mobilink. After this they introduced a new package that was jazz octane through which people send sms to any network only on 20 paisas by charging Rs.1 per day. Later on they introduced more and more packages and after some time their profit become less because of the competitors but they also maintain their position because of the high quality product, services and offers. Now the major competitor of the Mobilink is Zong. The most controversial idea behind these packages is the timing: from 11pm in the night till 7am in the morning. These packages are purely targeting the younger generation. The majority of the peoples like prepaid instead of postpaid indigo. To increase the customer of the postpaid, they make different strategies to convince the people towards postpaid by offering different type of discounts and facilities but they are failed. Recently Mobilink introduced a package that is Call on any network at same price as they charge Mobilink to Mobilink. On this package their profit is increase and their sale is also increase upto 5% compared to last year sale. Through Mobilink Pco the Sale of the Mobilink is also increases because of the rural sector. They provide the Mobilink Pco to those areas where the other network cannot work.

Telenor
Norways Telenor, a recent entrant with about a billion US dollar investment in Pakistan has been doing well, based on its recent earning report. It has about 20% of the market share. When Telenor enter in to Pakistan, It sees many opportunities, and now that it has network and grasp on the market. It is working on new strategies which include a focus on mobile Internet, mobile broadband and diversification in new directions and regions. When Telenor came to Pakistan they ist target that area which are not targeted by the other networks like Warid, Mobilink and Ufone. They provide their services to that areas where the other network not reach and in that area their sales was on the peak. Telenor was the first telecommunication network, which introduced the Internet in mobile phone first time. Through this they capture the 5% market and at that time their sales was increase very quickly. After this they introduced many packages like djuice, which offer 23 paises per message on any network. After this they introduced another package talk shawk, which is very popular now a days. In talk shawk they offer different type of discounts. Through talk shawk package the sales of the Telenor is increasing day by day. Telenor also introduce late night package which offer Rs.4.99 per hour from 12am to 7am, but this package did not get any profit because of the dropping calls and peoples mostly prefer Mobilink and Zong for late night calls. After unsuccessful of that package they introduce a package, which is called day package that is Rs.5.99 per hour

from 9-12 and 2-5pm from which their profit is increase but in a very short amount. Telenor was the first telecommunication network which introduced the Smart share first time in the market from which their profit and sales was increases upto 10%. They also introduce the TV in the mobile for which they charge a specific amount of money to see the TV on the mobile phone but their that idea was not popular and failed from which they get a very big lose.

Zong
CMPak (Zong brand), formerly Paktel, was the latest target of foreign acquisition. After it got acquired by China Mobile it was rebranded as Zong and launched one of the most successful and aggressive campaigns. Within a matter of few months, Zong has achieved a 6% market share. When Zong enter into the Market of the Pakistan then they capture the whole market by offering different packages. They develop different type of strategies to attract the customer. To achieve their target they minimize the call rates. Zong is the first telecommunication network in Pakistan, which offer life time free call to any one of the favorite number from 12am to 8am. Zong also introduced a special package that is day and late night package on which they call to any Zong number from 12pm-2pm and 12am to 8am only on Rs.3.99 per hour. From this package the sales of the Zong increases day by day and their market share reached to 9%. They also make strategies to increase their sale by offering unlimited sms by charging Rs.3 per day. They also make strategies to increase their sale by offering unlimited sms by charging Rs.3 per day. Because of this package most of the peoples switch towards Zong. When Zong introduced their mobile set at Rs.2000 which include Sim, 150 balance and also receive 150 balance free upto one year. At that time the sale of the Zong was on peak and their profit was increased upto 3%. Zong has unveiled wireless broadband for computers via a USB device with a special Internet (data) enabled SIM in it. It is not cheap. The one time cost of the USB modem is Rs. 10K (Zong insists on calling it Rs. 9,999) and the monthly charge is Rs.400 for unlimited downloads. The real questions are: is the speed really as high as Zong claims and if the user experience for surfing the web is up to the mark. Lets keep an eye on the service quality. The ZONG Internet USB Card is a device (with a SIM inside it) which can be inserted in your laptop/desktop PC (in the USB Slot) to provide you with access to the Internet. It works on the EDGE/GPRS network and gives you wireless Internet connectivity, anytime anywhere.

Ufone
Ufone, a wholly owned subsidiary of Pakistan Telecommunication Co. Ltd (PTCL), is now under the control of Etisalat group of UAE. It has 21% of subscriber share and added the most lines (2.4 million) from 2006-07. For those in Pakistan it is the one company where they can easily invest locally. After the privatization of PTCL, Ufone is now owned by Etisalat. Ufone was a subsidiary of PTCL (Pakistan Telecom Company Limited) the largest operator in Pakistan. Since the transnational operator Etisalat took over PTCL in 2006, Ufone has become a subsidiary of Etisalat. Ufone has a fast growing base of over 10 million subscribers thanks to its successful operations. The Company further expanded its coverage and has added new cities and highways. Ufone has network 3

coverage in more than 750 cities, towns and across all major highways of the country. Ufone adopted the policy of simplified tariffs with no hidden charges. As mobile users in the country have reached over 28 million at a very rapid pace, Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a subscriber base of around 6.5 million and a market share of nearly 25%. Ufone has seen a subscriber growth rate of over 200% in the last year, and since the start of 2005. Ufone added nearly 5 million subscribers onto its network. A remarkable achievement indeed, especially considering the fact that two new international players also entered into the market in 2005.Ufone also introduced different types of packages to increase their sales. Ufone offers 500 sms to any network by charging 60 rupees but the other network charge higher than Ufone except Zong. Through sms package the sales and the profit of the Ufone company is increased. The Ufone also offer the lowest late night package which is 3 rupees per hour but is not getting profit because of the dropping calls. To complete that lost they offer a day package which is from 9am to 12pm and 2pm to 5pm by charging Rs.5.99. On this package they recover the late night call package lost. The call rates of the Ufone is very low as compared to other networks. Before one year Ufone got a very big lose when they less the call rates below the Ptcl call rates. At that time they lost 2 billion rupees. Ufone is little late to the USB mobile Internet game but it has come up with the best offer yet: The USB stick is Rs.6999 and you get first 6 months free.

Ufone: Rs 6,999+6 free months+Rs.3000(500*6) = Rs.10,000. Zong: Rs 10,000+Rs.4800(400*12) = Rs.14,800. Telenor: Rs 12,700+Rs.6000(500*12) = Rs.18,700

IS there any opportunity for Voda fone in Pakistan? Opportunity for Voda fone is available in Pakistan because in Pakistan where less than half the 170m populations owns a cellphone but 2.5m new users connect every month. However, Vodafone's options here look limited, with the most attractive target Pakistan Mobile, controlled by Egyptian conglomerate Orascom. When the voda fone enter into India and Malaysia their profit and sale was on the peak and now a day the sale of the voda fone in India is very high and every one want to buy the Voda Fone. Now they are trying to enter into the Pakistan after successful strategies in India and Malaysia.The market is available for Voda fone but it will also affect the other telecom industry like Mobilink,Warid,Zong,Ufone etc, because the services and the packages which they offer in India is very high as compared to Pakistan telecommunication industry. Nawa-e-Waqt has reported (in its October 07, 2008 edition) that Orascom has entered into final stages of its talks with Vodafone to sell out 26 percent shares of Mobilink to UK based cellular company. Paper says that there were various sessions carried out between Orascom and Vodafone, and now they have almost closed this deal. However, value of this deal is still unknown. If the Voda fone come in Pakistan then the prices of the international call will be less as compared to other networks. If Telenor charge 20 rupees per minute from Pakistan to U.K then the Voda fone charge 8 rupees per minute like in India (Dawn news).