1.

Introducing the Company

1.1 The Company

Pacific Bangladesh Telecom Limited (PBTL) is the first mobile phone service provider in the Indian
subcontinent. The address of the Head office is: “Pacific Centre” 14, Mohakhali C/A Dhaka 1212.
PBTL was founded by Pacific Group Limited and Hutchison Whampoa Limited. CityCell is the brand
name under which Pacific Bangladesh Telecom provides wireless telecom or mobile phone service
and products to the general and other customers.

1.2 Pacific Group Ltd.

The Pacific Group is a group of companies under common ownership. The group has interests in
automobile service (Pacific Motors Ltd.), consumer electronics (Pacific Industries Ltd.), fisheries
(Bengal Fisheries Ltd.), tea (Noyapara Tea Company Ltd.) and telecommunications (Pacific
Bangladesh Telecom Ltd.). This group of industries was founded by renowned industrialist and
current honorable foreign minister – Mr. M. Morshed Khan.

1.3 Hutchison Whampoa Ltd.

Hutchison Whampoa Limited (HWL) is a Hong Kong-based diversified, multinational company with
its origins dating back to the 1800s. As part of the Li Ka-Shing group of companies, HWL's ultimate
shareholder is Cheung Kong (Holdings) Limited, which has a 49.9 % interest in the Company. In
terms of market capitalization, HWL is one of the largest companies listed on the Hong Kong stock
exchange. With over 150,000 employees worldwide, the Group operates five core businesses in 41
countries.

1.4 The Company History

In October 1990, Hutchison Bangladesh Telecom Limited (HBTL) was formed as a joint venture
between Bangladesh Telecom Limited (BTL) and Hutchison Whampoa Limited of Hong Kong. In
March of that year BTL had been issued a license by Bangladesh Telegraph and Telephone Board
(BTTB) for operating cellular, paging and other wireless communication networks.

However, soon there was legal dispute between BTTB and BTL regarding the refusal of BTTB to
provide Public Switch Telecommunication Network (PSTN) channels for connectivity to the BTTB
network. The Supreme Court then ruled in April 1993 that BTTB would have to provide PSTN
connections to HBTL, and that BTL would have to transfer the cellular portion to the license of
HBTL. BTTB gave HBTL the PSTN connections in August 1993 and HBTL began commercial
operation of the first cellular telephone service in Bangladesh in the same month. The owners of
HBTL decided to sell their stakes in the company due to the legal war. HBTL’s shares were divided

1
into two parts: Type A, which was held by BTL and Type B, held by Hutchison. Each type of share
represented 50% title of HBTL. Pacific Motors Limited bought the type A shares while Hong Kong
based financial investors Far East Telecom Limited bought the Type B shares.

On 12th February 1996, HBTL was renamed Pacific Bangladesh Telecom Limited. PBTL uses the
brand name CityCell to market its cellular products. In order to boost the financial and also the
managerial strength of PBTL, the shareholders of PBTL has completed the transaction under the
agreements in which Fujitsu Limited, Japan and Asian Infrastructure Development Company
(AIDEC), established in Cayman Islands, would acquire 10% and 20% equity shares in PBTL,
respectively on June 2000.

With this acquisition of 10% shares in PBTL by Fujitsu Limited, a Global Fortune 500 company, they
have further strengthened their presence in Bangladesh and also have demonstrated confidence as well
as their commitment to the Bangladesh market. Fujitsu has long been supplying Microwave links and
telecommunications equipment to BTTB and is clearly a leading market player in providing
telecommunication solutions in Bangladesh. Being 10% equity shareholder of the company Fujitsu is
in a position to nominate 1 (one) Director to the Board of PBTL.

Pacific Bangladesh Telecom

Limited (PBTL)

Pacific Far East Asian Inf. Fujitsu Ltd.

Motors Ltd. Telecom. Dev. Co. (FL)
(PML) Ltd. Ltd.
(FETL) (AIDEC)
(40%) (30%) (20%) (10%)

Fig 1: Ownership structure of PBTL (CityCell)

2
 1.5 History in brief
Table 1: Chronology of CityCell's Achievements
Date Event
Bangladesh Telecom Limited (BTL) was awarded a license to operate cellular, paging, and other
1989
wireless communication networks.
Hutchison Bangladesh Telecom Limited (HBTL) was incorporated in Bangladesh as a joint
Apr-90
venture between BTL and Hutchison Telecommunications (Bangladesh) Limited.
Aug-93 1st cellular operation in the South Asian sub-continent
Aug-93 HBTL began commercial operation in Dhaka using the AMPS mobile technology.
Dec-93 Pacific Motors Limited acquired the entire 50% share holding of HBTL.

HBTL was renamed as Pacific Bangladesh Telecom Limited (PBTL) and launched the brand
Feb-96
name “CityCell Digital” to market its cellular products.
Mar-97 1st to extend coverage to Chittagong.
Apr-97 CityCell began commercial operation in Chittagong.
Mar-99 1st to adopt CDMA technology. CDMA technology was first introduced by CityCell.
Jan-01 1st to set-up a communications backbone to Chittagong.
Apr-01 Dhaka-Chittagong microwave is launched.
Nov-01 CityCell introduced the 15-second pulse rate in the cellular industry of Bangladesh.
Jan-02 CityCell commences operations in the Sylhet zone.
Value Added Services (VAS), such as 24 hour billing information, news, services, sports, etc., are
Jan-02
introduced.
Mar-02 First operator in Bangladesh to offer off-peak rates.
July-02 First operator in Bangladesh to offer prepaid services with two-way PSTN (BTTB) connectivity.
Sep-02 CityCell extends coverage to Rangpur, Dinajpur, & Syedpur, the northern districts of Bangladesh.
Oct-02 Short Message Service (SMS) is introduced.
Jan-03 CityCell launched its services in the major northern business city of Bogra.
Feb-03 First operator in Bangladesh to introduce the One2One post-paid package.
Jun-03 CityCell reaches a coverage level of 40 districts out of a total of 64 (61 districts eligible).
Jun-03 Network capacity is increased to 240,000.

CityCell introduces “Amar Phone”, a postpaid mobile-to-mobile package offering the lowest
Aug-03
outgoing rate per minute in Bangladesh.
Sep-03 First operator in Bangladesh to introduce IDD and NWD for prepaid subscribers.
Oct-03 CityCell reaches a coverage level of 51 districts out of a total of 64 (61 districts eligible).
Nov-03 CityCell’s 24-hour customer call center opens. Network capacity is increased to 280,000.
Mar-04 CityCell opens its customer service centres 7 days a week countrywide.
June-04 CityCell launches RIM based handsets.
CityCell introduces, “Alaap Call me”, a pre-paid BTTB both-way connectivity package with the
Mar-05
unique “Call2Cash” feature to earn (talk-time) credits upon receiving CityCell calls.
June-05 Singtel acquires 45% equity stake of CityCell. Has a call option to acquire another 15% by 2007.

2. Mission, Vision, Objectives, Strategies

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2.1 Mission

PBTL’s mission statement is “To be the most successful cellular, paging and other wireless service
provider in Bangladesh by virtue of having greater operating expertise.” CityCell’s inherent
emphasis is on quality, not cheapness of service. The first priority is to provide a high end service that
can be used for both commercial and personal use.

2.2 Vision

The Vision of the company is “To to be the leader in the Telecom industry in the region and
provide a complete communication solution to the customers with a smile.” There is an emphasis
on strong customer relations. This is important to CityCell especially as, until recently, they
positioned their packages as high end packages (corporate and business users). Such customers will
require strong support for brand loyalty to develop.

2.3 Objectives

2.3.1 Qualitative Objectives:

 Increasing service offerings.
 Expanding the network.
 Creating innovative, unique, and cost-effective various products to customers.
 Increasing loyalty by focused customer retention program.

2.3.2 Quantifiable objectives:

 Increase subscriber base to 1 million by Dec 31, 2005
 99.5% overall network availability by the end of 2005
 Network coverage in 61 districts (out of eligible 61) by the end of 2005

2.4 Strategies

2.4.1 Functional Level Strategy

 PBTL’s focus is on efficiency, quality, innovation, and customer responsiveness.
2.4.2 Business Level Strategy
 PBTL applies cost leadership and differentiation strategies as its business level
strategies.
2.4.3 Corporate Level Strategy
 PBTL follows related diversification as their corporate level strategies.

3. Organizational Structure

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PBTL has a total of about 500 employees:

Fig 2: Organogram of Pacific Bangladesh Telecom Limited

3.1 Sales & Marketing: As the name implies, this division’s job is to conduct marketing promotion
of CityCell. The job of its employees is to maintain relationship distribution channel, media, and
corporate clients. This division also deals with value added services, brand and product design.

In the Sales Division there are Channel Sales, Corporate Sales and Direct Sales. In the Marketing
Division, there are Market Communications, Brand, VAS, Product Development and FWT &
Backbone Departments. The Senior Vice President is the Chief Marketing Officer of this Sales &
Marketing Division. Details about the departments have been discussed in the following chapter.

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3.2 Customer Service Operation, Billing and IT: This department deals with customer after the sale
occurs. Main activities of this department includes maintaining data base of the customers, preparing,
distributing, and collecting the bills, activating new connections, deactivating connections, helpline
service, interchanging of the CDMA sets, collecting the faulty and repairable sets, returning repaired
sets, changing CDMA sets and so on. This department is divided into three divisions:

a) Billing and IT b) Service Delivery

Billing and IT

Risk Management Revenue Generation

Fig 3: Billing and IT

Service Delivery

Front Office Account Verification Collections Workshop

Fig 4: Service Delivery

3.3 Finance and Commercial: This department is divided into two divisions, a) LC preparation and
Purchase, and b) Fund Management. Here LC is opened for purchasing of sets and equipment, and all
the funds collected are used and controlled for the maximum benefit of the company. This department
is also responsible for the budgeting which takes place once a year for the next three years.

Finance and Commercial

Commercial LC & Fund Management

Purchasing

Fig 5: Finance and Commercial

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3.4 Engineering: This department is responsible for the setting up and maintenance of the heavy
equipment and the major telecom channels required for providing services to customers. This
department is divided into 7 divisions. They are Switch, Central Base station, Microwave, Radio
Frequency, Base Transceiver Station, Power, Planning and development.

Engineering

Switch Microwave

Central Base Station Control Radio Frequency

Base Transceiver Station Power

Planning & Development

Fig 6: Engineering

3.5 Accounts: This department is responsible for collecting direct cash or check or charging credit
cards from the customers who are paying for the service and equipment. This department is also
responsible to maintain the balance of store where sets and equipments are gathered for future purpose
and present operation.

Accounts

All type of payments collection Store (Sets and equipments)

Fig 7: Accounts

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3.6 Administration and Human Resource: As the name implies, this department has three major
divisions. The Administration division is responsible for Contract, Legal and Protocol & Government
affairs. The Purchase & General Maintenances is responsible for Purchase & Support and Estate &
Properties, Maintenance & general security. The Human Resource department is responsible for
procuring future employees according. This department is also responsible for maintaining the
database of all employees, leaves, attendance, health care and related fields of employees.

Administration and Human Resource

Contract, Legal and Procurement Purchase & General Admin

Protocol

Fig 8: Administration and Human Resource

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4. Functions of the Sales and Marketing Division

The major marketing goal of this division is to capture a significant market segment that will yield
maximum revenue by means of passing on directly or indirectly high end cellular phone service.
Many clients provide telecom services to their locality by Tellular or Fixed Wireless package (FWT).
The rates of this package may be low but this is offset by the high frequency of usage and the strong
support claimed to be provided by CityCell.

SVP

VP

Manager Manager
Manager Manager Manager Manager Manager
Marketing Corporate
Product Development Brand Value Added Service Communication Channel Sales FWT and Backbone
Sales

Senior
Executive

Executive

Fig 9: Sales & Marketing Division

4.1 SVP

The office of the Senior Vice President of Sales and Marketing Division is responsible for
coordination of marketing activities across the company and to provide top level management with an
overall picture of the market situation.

4.2 VP
The Vice-President of the division oversees the product and business development scenario of
the company. He is responsible to the SVP of the division.

4.3 Product Development

This department is responsible for find out the innovative features that can attract the existing
and potential customers. Product development is one of the key departments in the company. While
developing new packages and talk plans this department has to keep in mind the profit and cost issue.
Under all these constraints the department has been producing exciting and new features which
ultimately attract customers.

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4.4 Value Added Service (VAS)

This is another department which also deals with product development but this department is
concerned only with the Value Added Services that the company offers. Value added services are
those other than basic voice calls. CityCell’s VAS department is one of leading VAS providers in the
country in terms of the number of wide range services that it is providing.

4.4.1 Short Messages Service (SMS)

4.4.2 Voice Mail Service
4.4.3 Call Conferencing

4.4.4 SMS Based Information Services

 Fun (Jokes, quotations, etc.)
 Financial Services
 Emergency Services
 Sports
 SMS Banking & others

Table 2: All of the Voice Based Information Services at a Glance

FoodFone (location based) *101

FireFone (location based) *911
PolicePhone (location based) *999
MediPhone (location based) *505
Automobile workshop (location based) *666
Flower shop (location based) *404
NTV NewsPhone *777
Channel I NewsPhone *444
ATN Bangla NewsPhone *333
WeatherPhone *122
EventsPhone *123
AirPhone *124
RailPhone *125
Exchange RatePhone *126
HoroscopePhone *127
PrayerPhone *786

4.5 Brand

The brand department of the company deals with image o the brand to the customers. It
basically helps the brand to portray its intentioned image to the potential target group. This
department along with the Marketing Communication department deals with the promotional
activities.

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4.6 Corporate Sales

There is a separate office of assistant vice-president for corporate sales who is also
responsible for corporate customer relations. Corporate customers are given high priority in terms of
sales and also in terms of after sales service. Of course this is due to the high usage and need for good
long term goodwill with such corporate clients. This department however deals mainly with sales to
corporate customers and maintenance of relations with both current clients as well as scouting out
potential new corporate clients, whereas the after sales service and other issues are dealt with by the
customer services operations section of the company.

4.7 Channel Sales

The assistant vice president responsible for channel management has the very important job
of setting up marketing channels by which packages are distributed among clients and by which
feedback is obtained from customers. This department is responsible for the selection of new dealers
and motivating them and current dealers to promote CityCell packages to their customers in their
respective areas. This department is also responsible for seeing that there is an excellent support
network for each dealer and that they are satisfied with their monetary or otherwise remuneration.

This department is also responsible for checking that each dealer does not cut into the sales of
another dealer in a very proximal region.

4.8 Marketing Communications

The chief responsibility of this department is logically, promotion and communication of new
products and product ideas to customers both directly through selection of advertising media, then
dissemination of information by means of advertisements; and indirectly through dealers by providing
them with promotional material. This department is also responsible for public relations which do not
include corporate relations. This is handled, as we have seen, by other departments. The responsibility
of this department is immensely important especially in the introduction stage of a package for
customers. They also provide help for other departments such as the front office and services
marketing in order to promote CityCell packages to both current and new customers. This helps very
much in handling cases of dissatisfied customers and also in case of adjusting customers with old
packages who have to be convinced to upgrade their packages to the new ones on offer.

The company sub-contracts its promotional materials production to local companies. A

regular number of events are held to integrate promotional activities with public relation exercises to
enhance the image of CityCell and better promote the packages on offer.

11
4.9 Product & Tariff design
This sub-department is under the Product Development department and is responsible for the
design of packages and the fixing of tariff rates which are actually the rates of usage for each package.
This department is also responsible for the coordination of market research for the whole company.
They will integrate knowledge gleaned from extensive market research into the design of new
packages that fulfills the needs of customers. This is done very frequently as the needs of even the
most stable of customer segments change and the company has to change the tariff structure of its
offered packages accordingly.

4.10 FWT and Backbone

This particular department looks after the Fixed Wireless Terminal clients and the packages.
FWT has been one of the most profitable sectors for the company. As a result this department has a
great significance to the company. PBTL has undertaken a commercial program to expand its business
activities to selling back-bone for data transfer to corporate clients. This network stretches from
Chittagong to Sylhet through Dhaka. It has immense potential and may generate significant revenues
for the company.

The overall structure of the sales & marketing department and its sections of CityCell has both
advantages and disadvantages in terms of organizational structural and respective functionality.

12
5. Products and Service offered by Pacific Bangladesh Telecom Limited

5.1 Post Paid Packages

5.1.1 ‘CityCell 1000’ (Regular): Commercial/ Business/ Personal use by high income
consumers. This product can reach the Local T&T, NWD, IDD and all Mobile service operators
across the country. It is one of the old packages of CityCell. Still this package is being provided to
many high income group consumers. Both small and large institutions and organizations subscribe the
service as their needs.
CityCell 1000 (Normal Scenario):
Monthly Subscription charge Tk. 1000
Outgoing Rate Peak (8AM-8PM) Off-Peak (8PM–11PM) S-O-P (11PM–8AM)
To Mobile (Zonal) 3.00 3.00 1.50
To Mobile (Interzonal) 8.00 8.00 8.00
To T&T 3.00 + BTTB 3.00 + BTTB 1.50 + BTTB
Incoming Rate
From T&T 2.00/min 2.00/min 1.00/min

CityCell 1000 (Roaming Scenario):

Monthly Subscription charge Tk. 1000
Outgoing Rate Flat Rate
To Mobile (Zonal) 3.00
To Mobile (Interzonal) 8.00
To T&T 3.00+BTTB
Incoming Rate
From T&T 3.00

5.1.2 ‘CityCell 500’ (Regular): Commercial/ Business/ Personal use by high income
consumers. This product can reach the Local T&T, NWD, IDD and all Mobile service across the
country. This is one of the regular packages which have the most number of subscribers. This package
is known and admired to all. The subscription fee and the tariff are affordable than the other mobile
operators are offering. These days not only high income group but also high medium and medium
income groups also use this service because of the lowest billing rate offered by CityCell.
CityCell 500 (Normal Scenario):
Monthly Subscription charge Tk. 500
Outgoing Rate Peak (8AM-8AM) Off-Peak (8PM-11PM) SOP (11PM-8AM)
To Mobile All Mobiles 4.00 3.00 1.50

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To T&T, NWD, IDD 4.00 + BTTB 3.00 + BTTB 1.50 + BTTB
Incoming Rate
From T&T 3.00/min 2.00/min 1.00/min

CityCell 500 (Roaming Scenario):

Monthly Subscription charge Tk. 500
Outgoing Rate Peak (8AM-8AM) Off-Peak (8PM-11PM) SOP (11PM-8AM)
To Mobile All Mobiles 4.00 3.00 1.50
To T&T, NWD, IDD 4.00 + BTTB 3.00 + BTTB 1.50 + BTTB
Incoming Rate
From T&T 3.00/min 2.00/min 1.00/min

5.1.3 ‘Mobile 250’ (Mobile to Mobile with BTTB Incoming and Limited Outgoing):
Personal use by middle income consumers. Significant number of customers is having this
subscription. It is very popular among students and medium salaried servicemen and a good number
people from different occupation are using this line.
Mobile 250 (Normal Scenario):
Monthly Subscription charge with CLI Tk. 250
Outgoing Rate Peak Off-Peak SOP
To Mobile (Zonal) 4.00 3.00 1.50
To Mobile (Interzonal) 6.00 5.00 5.00
To T&T N/A 3.00 + BTTB 1.50 + BTTB
Incoming Rate
From T&T 3.00/min 2.00/min 1.00/min

Mobile 250 (Roaming Scenario):

Monthly Subscription charge with CLI Tk. 250
Outgoing Rate Peak Off-Peak+SOP
To Mobile (Zonal) 4.00 3.00
To Mobile (Interzonal) 6.00 5.00
To T&T N/A N/A
Incoming Rate
From T&T 6.00 4.00
 Incoming from any mobile is free.
 1st minute from BTTB is free for all post paid cellular packages.

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 5.1.4 ‘Amaar Phone’ (Mobile to Mobile): Personal use by mainly medium income
consumers. Though not widely used but still this option is open for a group of people who just want
mobile to mobile connection in low rate.
Mobile to Mobile (Nation Wide Roaming Scenario):
Monthly Subscription with CLI Tk. 200 Nation Wide Roaming
Outgoing Peak (8AM–8PM) Off-Peak (8PM–8AM)
To Mobile 5.00 4.00
Pulse 15 sec. applicable from 2nd minute

5.1.5 ‘Tellular’ (Fixed Wireless Telephone): Commercial/Business use by commercial

institutions and business organizations. This package has been mostly used in village area, but
recently we have seen that in city area many people using this service for mobile to mobile business
because of low rate. High frequency antenna help the FWT sets to reach signals beyond the service
area.
Tellular (Fixed Wireless Telephone):
Monthly Subscription Fee Tk. 250
Outgoing Rate Per Minute
To Mobile (Within Zone) 2.50
To Mobile (Other Zone) 5.00
To T&T, NWD, IDD 2.50 + BTTB
Incoming
From T&T, NWD, IDD 1.50/min
From Any Mobile Free!

Package Target market segment

Aamar Phone Personal use by mainly medium income consumers
Shabar Phone Personal use by middle income consumers
CityCell 500 Commercial/business/personal use by middle/high income consumers
CityCell Premium Commercial/business/personal use by high income consumers
Commercial/business use by commercial institutions and business
FWT (Tellular) packages
organizations
Table 3: Current Post-paid packages: features and target segment

5.2 Pre Paid Packages

The new-generation subscribers are very interested with this service. It is also helpful for limited
income group of people. ‘Aalap’ pre-paid card is available everywhere and this service provides flat
rate and nation wide roaming. A very significant edge that CityCell pre-paid packages have over other
pre-paid packages from other companies is the package that features T & T incoming and outgoing.
Other benefits for the subscriber:

 SMS facility and other value added services

15
  Scratch card in a variety of denominations (e.g. Tk. 300, Tk. 400 and Tk. 550)
 Know the balance by dialing *811

5.2.1 ‘Aalap 24’ (Mobile to Mobile with T & T Facilities): Aalap 24 is mobile-to-mobile as
well as mobile-to-BTTB package. This plan gives subscribers –
 Access to any mobile in Bangladesh
 24-hour BTTB connectivity
 24-hour NWD and ISD facility
 Very attractive and simple tariff plan
 Freedom to choose 3 CityCell numbers and make calls at 50% reduced tariff under One2One
scheme.

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Aalap 24 (Also known as Aalap A)

Aalap 24/Aalap A

Call Type Call Charge1

To Any Mobile Tk. 2.50
Outgoing
To BTTB2 Tk. 2.50
From Any Mobile Free
Incoming
From BTTB Tk. 1.00

Notes:

1
For every 30 second pulse from the first 30 second
2
BTTB charges applicable
* For One2One calls to up to 3 CityCell numbers, talk for as low as Tk. 1.25/pulse

5.2.2 ‘Aalap B’ (Mobile to Mobile): In this option customer will have only mobile to mobile facility.
This option is offering pre-paid mobile in a low rate. This plan gives the subscriber –

 Access to any mobile in Bangladesh

 Lower tariff especially at peak period
 Freedom to choose 1 CityCell number and make calls at 50% reduced tariff under One2One
scheme.

Aalap B

Aalap B

Call Type Call Charge

Super Off Peak
Peak Off Peak
(8AM-8PM) (8PM-11PM)
(11PM-8AM)
Outgoing To Any Mobile Tk. 5.00/min Tk. 4.00/min Tk. 2.00/min
Incoming From Any Mobile Free Free Free

Notes:

* 20 second pulse after first minute

* For One2One calls to 1 CityCell number, talk for 50% of the above tariffs
* VAT applicable

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5.2.3 Aalap Call Me

Aalap Call Me is a full BTTB connectivity package with the unique and innovative call2cash feature.
This plan gives the subscriber –

 Access to any mobile in Bangladesh

 24-hour BTTB local/NWD/ISD connectivity
 Under the call2cash feature Aalap Call Me subscrivers will get Tk. 0.25 added to their
account every minute when they receive calls from other CityCell phones
 Freedom to choose up to 3 CityCells number and make calls at 50% reduced tariff under
One2One scheme
 CityCell to CityCell SMS at a reduced rate of Tk. 1.50

Aalap Call Me

Aalap Call Me

Call Type
Call Charge1

Outgoing To Any Mobile Tk. 2.50

To BTTB2 Tk. 2.50
Incoming From CityCell Mobile Tk. 0.25 credit per minute
From Any Mobile Free
From BTTB Tk. 1.00

Notes:

1
For every 30 second pulse from the first 30 second
2
BTTB charges applicable
* For One2One calls to up to 3 CityCell numbers, talk for as low as Tk. 1.25/pulse
* VAT applicable
* CityCell to CityCell SMS @ Tk. 1.50

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Fig 10: Post-paid & pre-paid package share of CityCell

19
6. Technology Comparison: AMPS, CDMA and GSM

6.1 AMPS: The most commonly used cellular system in North America, the Advanced
Mobile Phone System (AMPS) had also gained widespread acceptance in Asia (specially in Korea,
Hong Kong, Japan, Singapore, etc). An analogue system, this was introduced in the mid 80s and used
a technique known as Frequency Division Multiple Access (FDMA) to allocate Channels. Thus it
divides its entire allocation in sections of 30 KHz and uses each of these sections as channel. Thus
AMPS is able to provide 30 channels per 1MHz of frequency allocated. The principal behind AMPS
is analogous to dividing up a large hall room (the entire frequency allocated to the operator) into a
number of smaller rooms (channel) once the first pair has completed their conversation and left the
room (disconnected).

6.2 Code Division Multiple Access (CDMA): Code Division Multiple Access is a system in
which a subscriber uses the entire frequency for the entire period that his phone is active. Installing of
segregating users by frequency (FDMA) or time (TDMA) this technology segregates customers by
coding the signals in such a manner that each customer decrypts only one signal at any one signal at
any given time. This would be similar to allowing a large number of people into the hall room, but
requiring each pair to converse in a different language. Thus while everyone would hear everyone
else, this would just be more of background noise rather than interference. On the other hand, each
person would be able to understand this partner, because they would be speaking the same language.
One of major differences between CDMA and the other existing technologies is in terms of frequency
reuse. Using CDMA an operator would use the entire allocated frequency in every cell. The reuse
pattern, therefore, is in effect a ‘one cell reuse pattern’. Therefore, the operator can serve may more
customers per unit of allocated bandwidth compared to either AMPS of GSM. In general, CDMA
capacity is rated to be 10 to 20 times higher then analogue techniques such as AMPS, and 3 to 5
times higher than other digital cellular technologies such as GSM.

6.3 GSM: GSM stands for "Global System for Mobile Communications." It is mostly a
European system and is largely unused in the US. Introduced in the mid-80s, the Global System for
Mobile (GSM) Communications is a digital cellular used extensively in Europe and Asia. GSM is
interesting in that it uses a modified and far more efficient version of TDMA. GSM keeps the idea of
timeslots and frequency channels, but corrects several major shortcomings. Since the GSM timeslots
are smaller than TDMA, they hold less data but allow for data rates starting at 300 bits per second.
Thus, a call can use as many timeslots as necessary up to a limit of 13 kilobits per second. When a call
is inactive (silence) or may be compressed more, fewer timeslots are used. To facilitate filling in gaps
left by unused timeslots, calls do "frequency hopping" in GSM. This means that calls will jump
between channels and timeslots to maximize the system’s usage. To compare with the other systems,
it should be noted that GSM requires 1 Watt of output power from the phone.

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 6.4 Advantages of CDMA: There are numerous advantages of using CDMA technology, the
most important of which are:

(a) Higher Capacity: Since CDMA makes more efficient use of the available spectrum, it
can provide greatly increased capacity. CDMA capacity is rated to be 10 to 20 times higher than other
analogue techniques such AMOPS, and 3 to 5 time higher that other digital cellular techniques such as
GSM. With higher capacity, CDMA accommodates higher demands and supports new digital services
such as data transmission and mobile fixing.

(b) Simplified Planning: CDMA allows system planning to become much easier through the
use of the same frequency in every sector of every cell. As the entire frequency is used in each cell,
operators do not have to retune base stations, thus capacity expansion is quicker and simpler.

(c) Better Voice and Call Quality: The unique encoding scheme used foe each different
CDMA conversation virtually eliminates cross-talk and dramatically reduces the impact of
interference from other sources. Also, The larger bandwidth of CDMA signals (the signals use the
entire frequency versus only a portion for competing technologies) means that they are less prone to
fading compared to the narrower bandwidths of AMPS and GSM.

(d) Enhanced Security and Privacy: Since the signals are coded, it is very difficult to
intercept and decode a CDMA signal. This prevents eavesdropping and prohibits cloning and other
types of fraud. Also, due to the wider bandwidth, such phones are difficult to jam.

6.5 CDMA vs. GSM: A Technical Comparison

6.5.1 Advantages of CDMA:

 Increased cellular communications security
 Simultaneous conversations, less call drops, stronger network
 Increased efficiency, meaning that the carrier can serve more subscribers
 Low power requirements and little cell-to-cell coordination needed by operators
 Extended reach – beneficial to rural users situated far from cells
 Smaller phone sets

6.5.2 Disadvantages of CDMA:

 Due to its proprietary nature, all of CDMA's flaws are not known to the engineering
community for solving
 CDMA is relatively new, and the network is not as mature as GSM
 CDMA cannot offer international roaming, a large GSM advantage

21
6.5.3 Advantages of GSM:
 GSM is already used worldwide with over 500 million subscribers
 International Roaming permits subscribers to use one phone throughout Western Europe
CDMA will work in Asia, but not popular European destinations
 GSM is mature, having started in the mid-80s. This maturity means a more stable network
with robust features. CDMA is still building its network
 The availability of Subscriber Identity Modules, which are smart cards that provide
secure data encryption give GSM e-commerce advantages

6.5.4 Disadvantages of GSM:

 Lower voice clarity
 Less security for subscribers
 Frequent call drops
 Higher number of carriers/base stations required

22
1. Introduction to the Project

The topic of my internship project is “The prospect of discount services and loyalty program
under the customer retention scheme of CityCell”.
I have worked under the Value Added Service (VAS) division of the Sales & Marketing Department
for past three months.
During this period I had been assigned to create as many valued business partners as possible for the
discount services to be offered to a certain section of the subscribers in order to retain customers of
the telecom operator. My other responsibilities included maintaining various documents including
Memorandum of Understanding (MoU) papers, creating amendments if and when necessary, regular
update of relevant data and synchronizing information within CityCell and its new partners.

2. Significance of the Study

Though PBTL was the company which first brought cellular service in this subcontinent, it could not
be the market leader in the telecom industry, as of now. The growth rate of the company is slow. The
subscriber base might suggest the company is already in the 4 th position among the 4 active mobile
competitors. From my point of view, it is the technology which is not popular in this part of the world.
CDMA technology is the latest technology for mobile communication but maybe too advanced for
this market. But apart from the technology if an operator provides quality service (network, customer
care, VAS), offers some attractive packages, and takes initiatives for the subscribers, it is possible to
be the market leader.

This is where the other mobile operators have started to work effectively in a greater extent. After the
entry of banglalink (Orascom Bangladesh Telecom Ltd.), the telecom market has become volatile
with existing subscribers are migrating vigorously at the reduction of call rates and introduction of
attractive packages. Some operators have been seeing their subscriber base increase exponentially
while others are wistfully watching theirs decrease. In view of these, CityCell has decided to launch a
customer retention plan for its loyal and dedicated subscriber base.

Therefore I have found it challenging to be involved in a work from which the company can benefit.
Through my survey I have tried to find about the discount service acceptability among respondents,
the customer switching pattern and the satisfaction/dissatisfaction criterions among the existing
CityCell subscribers. I have also worked on possible avenues on which CityCell can work further to
offer attractive benefits to its loyal subscribers. Through my findings and analyses I believe it would
be easier for the company to take decisions about the areas they have to reshape or develop regarding
their customer retention plan.

23
3. Objectives

3.1 Broad Objective

To have an in-depth analysis into the prospect of the Customer Retention Scheme of CityCell

3.2 Specific Objectives

 To conduct a competitor and industry analysis of the telecom market and present its potentials
 To assess PBTL’s current state of operation and future direction
 To carry out a SWOT analysis of CityCell
 To find out the satisfaction level of the subscribers
 To trace the specific areas where the subscribers are dissatisfied
 To identify the customer switching pattern and ways to retain them
 To evaluate the loyalty program offered by the operator under its customer retention scheme
 To look into the discrepancies of the discount service to be launched for its loyal and high-end
users

4. Hypothesis

My hypothesis is, “Although PBTL brought ‘CityCell’ as the first mobile telecommunication service
in the subcontinent, its customers are not fully satisfied with the service. If PBTL does not take care of
these dissatisfactions, it will be difficult for PBTL to retain its subscribers, thus maintain its position
and increase its market share.”

5. Methodology

The topic of my project is ‘The prospect of discount services and loyalty program under the
customer retention scheme of CityCell’.

5.1 Data Collection Method: In my study I have mainly depended on primary data, which have been
collected through direct and phone survey.

5.2 Questionnaire pattern: I have developed my questionnaire (enclosed in the Appendix) mainly
focusing on the discount service acceptability among respondents, the customer switching pattern and
the satisfaction/dissatisfaction criterions among the existing CityCell subscribers. I have also worked
on possible avenues on which CityCell can work further to offer attractive benefits to its loyal
subscribers. It is a mixed open & close-ended questionnaire that consists of 17-odd questions.

24
5.3 Population: Since I was trying to assess the satisfaction level of various factors of the company,
rate of acceptability of various possible benefits and the discount service options, I have surveyed the
CityCell subscribers only.

5.4 Sample Size: The sample size has been 80.

5.5 Sampling Method: Data collection has been done based on convenient random sampling through
means of telephone and in the premises of CityCell dealer outlets where customers visit to buy new
sets and connections.

5.6 Secondary Research: I have also collected data and necessary information from the VAS (Value
Added Service) & the Customer Care department.

5.7 Findings & Analysis: The results of the survey have been represented through bar and pie charts.
My research findings came out through analyzing those data.

6. Limitations of the Study

Some limiting factors were faced while conducting the research and preparing the report. These
factors are as follows:

 No prior research has been done on this particular issue. The loyalty project is an experiment
to retain customers which is in its initial phase; the privilege service for high-end users has
not yet been launched. So the information presented and data collected is very raw.

 The findings and analysis are based on the results conducted from 80 respondents only. Due
to the data collection method (random sampling) and non-availability of loyal/high-end
subscribers, their opinions have not been reflected in the survey. Therefore it is not a perfectly
representative sample.

 The sample that used to conduct the survey is mostly from Dhaka division. So concerns on
some issues such as network, may contain some biasness.

 Moreover, it has not been possible to get all required internal information of the company as
these are treated as confidential company information.

25
 7. Industry Analysis by means of the 5-forces model

Integrating the various five forces, we get:

7.1 Bargaining power of Suppliers:

Bargaining power of suppliers is high because:
1. Suppliers provide CDMA sets that cannot be found easily from many suppliers
2. Suppliers do not depend solely on CityCell for significant portion of sales
3. Products are not differentiated. However this has little effect on over-all supplier power
4. PBTL cannot vertically integrate backwards as it does not have the capability to produce
hardware whereas the primary suppliers may buy a majority stake in PBTL

7.2 Bargaining power of Buyers:

Bargaining power of buyers is comparatively low under certain conditions:
1. Tellular customers have significantly low bargaining power because of the high cost of
procurement of a Tellular set. They have to rely on PBTL for spare parts and other help.
2. Users of low cost packages may switch from CityCell to other packages but only at a certain
cost: that of cost of purchase. In many cases it is seen that such customers run up bills equivalent to or
above their credit limit then abandon their CityCell number. In such cases the buyer’s bargaining
power is higher.
3. In cases of packages like CityCell 500/1000 buyers have significantly less purchasing power
because of the high deposits paid to PBTL (Tk 2,500 for local T&T connections, additional Tk 2,500
for NWD and Tk 10,000 for ISD connections). This significant amount of investment means that
customers cannot shift easily from one company to another.

7.3 Potential competitors:

Let us look at the potential competitor’s scenario from the barriers to entry perspective:
1. Brand loyalty: Due to decreasing performance and slow progress in expansion of network,
CityCell packages inspire less brand loyalty than before. However potential new entrants to
the industry will be deterred by the high brand loyalty to Grameen packages. Essentially it is
believed that the total potential market has been fulfilled by as much as three fourths. Thus
leaving a very small segment of customers for new entrants to gain. High brand loyalty to
Grameen and the die-hard users of the other three companies: Orascom, CityCell & Aktel
ensures that potential entrants will be strongly discouraged by the high brand loyalty in
current markets.
2. Absolute cost advantages & economies of scale: Current players have a more or less absolute
cost advantage because they have already invested in telecom infrastructure and have
recouped their investments. New companies will have to invest in equipment and will take

26
 considerably greater time to cover initial equipment-purchase expenses. Considering the size
of the four companies already operating and the size of their investments, they will not take
kindly to an upstart in the industry and may use as many competitive options as possible –
price strategy, quality – to retain an upper hand.
3. Distribution channel: Another major barrier to entry is the access to distribution channels.
With four companies competing in the current market environment, the distributors of mobile
phones are becoming very limited. Moreover, many retailers will not want to carry more lines
of mobile phone packages as they have to sell the ones they already have. Thus any increase
in the number of companies will cannibalize into current sales.
4. Governmental regulations: In Bangladesh, the telecommunications market is still own by the
state-owned BTTB. They are thinking of entering the mobile phone market. Thus they will
not take kindly to new companies entering the industry. This may make them influence the
government to introduce new legislation designed to restrain the business activities of new
companies.

7.4 Threat of substitute products: For CityCell the threat of substitute products is very real. Many
customers prefer to use Grameen Phone above that of CityCell primarily for the network reach. There
are also a number of other factors that make CityCell vulnerable to this aspect of the five forces
method of analysis.
However we should note that in case of packages are used for commercial use, CityCell has a
significant hold over customers. In case of Tellular packages, the rates being so low, many clients
prefer to stick with their CityCell Tellular sets even after experiencing technical and network
problems. Moreover as the initial purchase of a CityCell Tellular set constitutes a significant
investment – around Tk 50,000 all inclusive – an owner of a Tellular set cannot easily substitute his or
her product.

7.5 Threat of New Entrants: The entry barriers to this industry are very high as the government
controls the licensing arrangements, and also the existing operators has made sufficient inroads into
the market. This will strongly discourage new entrants into the market although the government has
decided to give a few new licenses.

8. Competitor Analysis

27
The mobile telecommunications industry in Bangladesh is now in its rapid growth stage. Since the
technology is expensive, there are only four companies operating actively the mobile service. The
other three companies are, Grameen Phone, AKTel, and Orascom Telecom. BTTB with its brand,
‘Tele-talk’ has also very recently entered this competitive scenario.
As operators of mobile cellular services, Aktel, Grameen Phone and Banglalink are direct competitors
of CityCell. The PBTL license was issued in 1989. The three other license were awarded during
November 1996, and are identical to each other, however the licenses awarded to Aktel, Grameen and
Sheba (now Banglalink) for their mobile cellular networks differ in some aspects from the license that
PBTL holds.

The most significant differences are:

Grameen/Banglalink/AKTE PBTL (CityCell)

L
Cellular mobile or fixed communications
Must be digital technology. Can be digital or analogue technology.
License Duration
Licenses valid for 15 years thereafter License valid for 20 years.
renewable annually based on performance.
Frequency
Assigned 10 MHz. Assigned a total of 40 MHz.
Operator fee obligations
Operator pays 15% of line rental revenues to PBTL has to pay 10% of line rental revenues
Ministry of Post & Telecommunications and and call charges at accruals to BTTB. No
call charges at actual to BTTB. Additionally, license fees are payable.
operators pay Tk 10 million annually as
license fees.
Coverage of cell sites
Coverage of each cell may not be greater Coverage is not restricted.
than 7 km in urban and 17.5 km in rural
areas.
Rollout Obligation
Operators must performance obligations or No such obligations.
pay fines.

8.1 Grameen Phone Limited:

Grameen Phone Ltd. (GP) is the current market leader in terms of market share, which is
owned by a consortium of investors comprising of Grameen Telecom and Telenor (Norwegian state

28
owned telecommunication company, owning nearly 65% of total shares). GP is using the GSM
technology to provide mobile cellular services to about 3.4 million subscribers in Bangladesh. The
company started its service in March 26, 1997.
Grameen Phone’s basic strategy is coverage of both urban and rural areas. In contrast to the “island”
strategy followed by some companies, which involves connecting isolated islands of urban coverage
through transmission links, the company has been building continuous coverage, cell after cell. So far,
GP has installed more than 2000 BTS’s around the country for cell to cell coverage. Grameen Phone
has the widest coverage in Bangladesh. The company is planning to increase the network coverage to
80% of the population from the current 57% within this year.

8.2 AKTel (TMIB):

Telecom Malaysia International (Bangladesh) is a joint venture between Telecom Malaysia
and A K Khan & co. TMIB also began operations in 1997 using the GSM technology. TMIB offers its
mobile services under the brand name AKTEL. It operates as a Limited Liability Company, where the
majority shareholder, Telekom Malaysia, own 70% shares, while minority shares of 30% are owned
by A. K. Khan & Co. Bangladesh Limited. The company is now servicing around 1.8 million
customers all over the country.
Aktel has been distinctly ahead in offering the “30 Seconds Pulse” from the first minute of talk time.
Today, The company boasts the widest International Roaming service in the market connecting 315
operators across 170 countries. In addition, Aktel is the first mobile operator to connect Tetulia and
Teknaf, the northern and southern most points of Bangladesh. Aktel was also the first to provide
seamless coverage along the Dhaka-Chittagong highway. With a network covering all 61 (allowable)
districts of Bangladesh, coupled with the first Intelligent Network (IN) Prepaid Platform in the
country, Aktel is geared to provide a wide range of products and services to customers all over
Bangladesh.

8.3 Banglalink (Orascom Telecom):

Orascom Telecom Bangladesh, an Egyptian multinational company with market presence in

11 countries (and market leader in 9 of them) launched their GSM network on the 10th of February
2005. This company is the last addition to the GSM family of the local market when on October 20th,
2004, Orascom Telecom announced the purchase of Sheba Telecom with a cost of US$ 60 million.
The company’s re- branding has been under the name of Banglalink with the leveraging promise to
provide the market with quality service at the most affordable prices fitting to their communications
needs.
It is also worth mentioning that an unprecedented success of sales results followed the commercial
launch of Banglalink in early this year. Orascom is currently serving around 400,000 subscribers.

29
8.4 Tele-talk (BTTB):

State-run Bangladesh Telegraph and Telephone Board (BTTB) operates basic telecom
services, national transmission network and overseas communication. It has a monopoly over
interconnections and the international gateway, in which all other telecommunications operators
depend on to connect to the fixed telephone lines and international calls. All phone operators are also
subjected to a monopolistic control by BTTB that limits revenue sharing 1 arrangements. Just two and
a half months back, BTTB had launched their much-awaited mobile phone, Tele-talk which has
generated hype among the potential subscribers. As of now, Tele-talk has a small customer base of
40,000 with only T&T connectivity. But the major feature of this package is absolutely free incoming
from BTTB which has strongly swayed the market in favor of the new package.

1
Revenue Sharing refers to sharing of revenue collected by one company for a service co-produced by two.

30
9. Company and Industry life-cycle stage

Although revenues appear to be steady, PBTL is losing customers steadily (declining market share)
and, thus is predicted that within the next few months, revenues will also start to decline. This has
happened in an industry which may be relatively low-growth currently but in which many believe that
should prices of usage be decreased slightly and the telecom sector further liberalized, it could grow
significantly further.

Thus we may state the company to be having ‘question mark’ or ‘problem child’ status within the
BCG matrix.

Figure 11: BCG matrix

If we consider the situation in terms of the life cycle scenario, we are forced to say that, under current
conditions, CityCell of PBTL is under the decline stage.

On the other hand, the industry life-cycle stage may be defined as a shake-out stage. The rate of
growth has slowed as demand has approached saturation level under current conditions. Much of the
demand for sets and packages are limited to replacement demand – both in terms of packages and also
in terms of sets. This explains why PBTL is losing such a major portion of its customers many of
them are leaving for more versatile and cheaper packages from other companies.

31
10. The Telecom Market Potential

143.13

9.57 3.25

 Bangladesh has one of the lowest tele-density in the world: lowest tele-density means huge
potential to be tapped
 Fixed Wired lines less viable option, wireless to drive growth
 Potential demand of cellular is estimated to be 10%-14% of population
 Potential demand ranges from 14-20 M (Dec 2004)
 Current subscriber number is approx 4 M
 Untapped market is 10-16 M subscribers now
 Quick & successful implementation of network capacity is the best strategy for growth &
profitability
This requires - Substantial Investment, Innovation & Experience

Figure 12: Current state of the Telecom Industry in Bangladesh

Figure 13: Future direction of the Telecom Industry in Bangladesh

32
11. SWOT Analysis of CityCell

SWOT Analysis is a very important tool for a company for a company to analyze its internal external
environment. Now, we will see a SWOT analysis of CityCell.

11.1 Strengths:

1. Competitive tariff structure: Price is a big competitive advantage for CityCell.

CityCell is the only organization which is selling CDMA mobile phones with both way T&T
facilities at the lowest rate. For example, the lowest package rate of CityCell is Tk 4,999/=
with T&T incoming and outgoing facilities (‘Alaap Call Me’, pre-paid). With T&T facilities
the other competitors are no where near CityCell. This package has a fantastic and a very
innovative feature, Call2Cash, in which any subscriber of this package can ‘earn’ or collect
0.25 takas per minute in his/her pre-paid account upon receiving a call from any CityCell
mobile.
2. No ‘Busy Network’: Because of enormous number of channels, excess to CityCell
mobile phones is very easy. The rate of call drops is very low. It possesses high quality voice
and data transmissions.
3. Advanced technology: CDMA technology is the best technology for
telecommunication. World class mobile operators and world class mobile phone
manufacturers are advancing to this new technology. CityCell is one of the few mobile service
providers which are using CDMA technology. Where as other GSM mobile service provider
has to make huge invest or will need time for transformation. Current CDMA 1X platform
paves the way for easier migration to 3G technology
4. Low Cost: CityCell follows low cost strategies that enables greater profit margin for
shareholders. It tries to cut cost in every possible way to maximize the strengths for future
battle.

5. Dedicated & professional management team: Dedicated core staffs who are
willing to provide significant labor hours to accomplish targets.

11.2 Weakness:

1. Fewer staff: The number of staffs working for CityCell is not enough at all. Far
fewer staff than actually required in terms of tasks to be completed.
2. New technology: CDMA is the latest technology but it is not widely used. A still
more popular option is GSM. It is more difficult for CityCell to provide international roaming
because of few number of CDMA operators around the globe.

33
 3. Low network coverage: Though CityCell started to provide mobile
telecommunication ten years back, it is still in behind the other operators from the point of
nationwide coverage. Grameen phone was able to use the optical fiber network of Bangladesh
Railway through strong lobbying with the past government for the next twenty five years.
That’s why Grameen Phone’s expansion has been huge, whereas CityCell has covered
roughly 58 districts all over the country with a poor infrastructure.

4. Lack of education: The subscribers are not educated enough to handle sophisticated
CDMA mobile handsets effectively. That’s why proper knowledge is essential to handle these
mobile sets.

11.3 Opportunities:

1. Advanced technology: Since CDMA technology is the latest in the wireless

telecommunication industry, it is yet to find new potential in the short future.
2. Secured data transfer: Secured data transfer means CityCell has the potential to be the
leading player once e-commerce takes off.
3. Overseas expansion plan: The growing need for across border telecom services at lesser cost
(e.g. with neighboring India, Burma, then onto Thailand, etc) can be an opportunity for
CityCell.
4. Acquisition of Singtel: The acquisition of 45% equity stake of CityCell brings more
opportunity for CityCell. The company now has greater capital and more budget to invest on
its network facilities. In fact, of the $118 million investment of Singtel in PBTL, $90 million
would be spent in network expansion plans2.
5. Leadership in telecommunication services: Bangladesh government has already started to
provide license to private sectors to set up land phone. PBTL is the only mobile phone
operator with nationwide mobile & fixed license. With full nationwide coverage and a huge
capital investment from Singtel, it is possible to become the market leader for CityCell.

11.4 Threats:

1. Technology factor: There is a high degree of acceptance of GSM technology over

CDMA in local market.
2. Legal problems: Tough legislation against easy expansion into regional and
international markets bypassing the state owned BTTB.
3. Newly imposed tax: In the fiscal budget proposed last week, the government has
imposed a Tk. 1200 tax on each and every SIM/RUIM card which would hurt the regional

2
The Daily Star, June 4, 2005

34
 expansion plans, increase of customer base in the lower segment and the profit motive for
every operator including CityCell.
4. New competitors: If new, international competitors like ‘Airtel’ of India enters the
local market with full coverage and low price, then not only CityCell but also other mobile
operators would be in great trouble. Already Orascom (Banglalink) is giving CityCell a run
for its money and market share.
5. Global companies: In India global companies like ‘AT&T’ of the United States and
in Eastern Asia ‘Vodaphone’ of the United Kingdom is working well. They might think to
enter Bangladesh with higher capital. If so, it will be a huge threat for CityCell.
6. BTTB mobile phone: BTTB has already entered the mobile telecommunications
industry (Tele-talk). It might carry unfair Government advantages and cause severe problems
to all other mobile phone operators.

35
12. Assessment of CityCell’s current state and future direction

12.1 Current State of operations: CityCell packages are focused to follow the company’s
differentiation strategy. There area number of market segments into which CityCell’s potential and
current customers can be divided. PBTL always strives to make each CityCell package released to be
unique and noticed above that of the competition. They also try to attain distinctness in their sales and
marketing strategy to make them seem like a unique, ‘blue-blooded’ mobile phone company. In order
to do this, they have made a number of strategic choices which may set them as being different from
other companies; they also handicap them in a significant manner.

The primary strategic choice that has affected them is such a manner is their choice of technology.
Although CDMA technology is far in advance from other technologies, it has yet to gain a significant
acceptability in Bangladesh. Thus what has happened is that there is a serious shortage of CDMA sets
and, as knock-on, effect higher price of the sets that are available. Worse, many sets are simply lying
around due to lack of spare-parts. Customers have to pay line rent for faulty or dead sets. Many
customers are disconnecting their CityCell lines and buying cheaper packages from other companies.
The detrimental effect this has had on operations is that PBTL is finding increasingly less room to
maneuver and introduce new features in their service which will help them combat competition. This
also means that they have to fight for survival rather than for dominance. Inherently, PBTL’s
strategies appear to be more reactive than proactive.
A very important aspect of current operations is the severe effect that centralization of organization
has on operations. The regional offices are responsible for handling phones only in that zone. There is
a severe lack of coordination between the various regional offices which has a detrimental effect on
customer satisfaction. Worse, the entries for each zone are done all on one floor in the head office at
the vast majority of customers buying their sets directly from PBTL, it means that they are also
dependent on PBTL for repairs and spare part needs. Thus the current staffs who work at repairs and
servicing are severely overworked. This affects morale and employee satisfaction, reducing the
efficiency of set-servicing process and thus has results in dissatisfied customers. In all PBTL is a
company with immense potential, but it remains to be seen whether management can fully harness
this potential. The potential is present in all the factors of operations:

1) The technology is very advanced and has immense potential

2) The labor factor is strong with some very capable staff
3) PBTL has sufficient capital to undertake infrastructure investments
4) There is still a significant portion of goodwill towards the company from its stakeholders

What PBTL needs to do now is to harness all these positive factors, negate the detrimental ones and
move forward.

36
12.2 Future Direction of the Company:
CityCell appears to be moving towards a more customer oriented approach to its overall
customer policy. Gone are the days when PBTL could dictate terms to its clients. These days PBTL
has to spend an increasing amount of time covering its shortfalls and persuading customers to stay
with them. This is especially worrying after what is perceived to be by many industry insiders a
concerted effort by Grameen Phone to make headway into the corporate market – a domain that was
once almost exclusively under PBTL. What PBTL is really looking for is a way by which it can
seriously bounce back into dominant position. The primary reason for choosing CDMA is that they
hope to be able to implement the next generation (3G or CDMA 1x) mobile phone features such as
voice conferencing, Internet, sending visual data, etc into their services. It remains to be seen how
successful they are in harnessing the full power of CDMA technology.

There is also a proposal to decentralize their organization in order to be able to better serve their
customers in the far reaching regions of the country. This means that many major functions will be
spread out throughout the country divided according to customer regions. It is yet to be seen how
much decentralization may occur, but it is a major issue under consideration. Then there is the sale of
data link to corporate clients. This will gather significant revenue for the company as well as solidify
its position with its corporate clients as their primary information transfer and telecom provider. The
incongruities between the various tariff plans of the various packages are to be removed both to make
it much easier for customers to budget usage and also to increase the value for money of each
package.

12.2.1 Upcoming features of CityCell:

 UTK (User Tool Kit)

 International Roaming/ SMS
 MMS (Multimedia Message Service)
 MCRBT (Multimedia Color Ring Back Tone)
 Infotainment
 Internet Access@144 kbps
 PTT (Push to Talk)
 Electronic Top Up

37
 12.2.2 Acquisition of SingTel: Singapore Telecommunications Limited (SingTel) recently
announced that it has invested US$118 million for a 45 per cent equity stake in Pacific Bangladesh
Telecom Limited (PBTL). In addition, SingTel has a call option to increase its equity interest in
PBTL to 60 per cent for an additional US$65 million. The option can be exercised between 1 April
and 30 June 2007.

The recent investment made by SingTel has created a lot of options for the company. Everyone is
expecting that network expansion and technology up gradation will occur at a fast pace. This is
especially important if we consider the fact that slowly boundaries are opening and technologies are
improving. GSM will give way to more advanced technologies like CDMA and there will soon be no
national boundaries as defined in the telecom industry. If that happens and the telecom sector is
further liberalized, then PBTL can look forward to increased growth and revenue.

Temasek Public
62.71% 37.29%

SingTel SingNet National SingTel Optus Associates

Mobile Computer Sys (Aus)

Overseas Singapore

AIS, Thailand 21.5% SingPost

Investment APT Satellite, Hong Kong 20.3%
in PBTL
45-60% Bharti, India 28.5%

Globe, Philippines 40.1%

NCIC, Taiwan 24.5%
Telkomsel, Indonesia 35.0%

Figure 17: SingTel: Group Structure

38
 Present Phase 1 Phase 2
Shareholder
% % %
Pacific Motors 40 31 31
FETL 30 24 9
AIDEC 20 - -
Fujitsu Ltd 10 - -
SingTel - 45 60
Total 100 100 100

Figure 18: ShareHolding of PBTL: Present & Future

12.2.3 Strengths & Opportunities from SingTel:

1. Equity injection of $90M (in phase 1) will give necessary thrust in aggressive
expansion strategy of PBTL.
2. A multinational corporate like SingTel as a major stakeholder will give enhanced
access to funding.
3. SingTel, as an international player, will provide incremental leverage over vendors
(handsets, equipment).
4. SingTel brings in 120 years of expertise – innovation, quality, efficiency, and
corporate governance.
5. PBTL with SingTel is better poised to capture the market potential & become the
market leader.
6. Benefit from seamless coverage across SingTel network in Asia and international
access across the world for international roaming through its submarine & satellite network.

39
13. Presenting the Survey Results

13.1 About the Respondents

This bar chart represents more-or-less a normal distribution curve. Nearly 70% of the sample is
between 21-40 years of age. Respondents are largely in service (as represented in the pie chart) or
students. This means a good 30% of the sample fall into the youth segment.

40
13.2 Regarding CityCell subscribers

Q Which is your first mobile phone – CityCell 47

Grameen 25
Aktel 6
Sheba 2

Results show that 42% of the respondents have switched from other operators to CityCell in the past 8
years or so. This question has tried to find out the level of dissatisfaction among the users of mobile
phone in the market at present. About a half of the respondents have found other operators as not upto
‘standard’ or upto expectation. The next few questions aims at finding out about their (42% of the
respondents’) switching pattern and why they’ve chosen CityCell or why the other 58% are still using
CityCell.

41
 Q How long have you been using – a. A mobile
b. CityCell
Ans a. 1 m – 1 yr 12
b. 1 m – 1 yr 23

a. 1 – 3 yrs 21
b. 1 – 3 yrs 31

a. 3 – 5 yrs 16
b. 3 – 5 yrs 18

a. 5 – 8 yrs 23
b. 5 – 8 yrs 8

a. More than 8 yrs 8

b. More than 8 yrs 0

This graph reveals an interesting picture. The light-colored bars represent number of mobile-users
while the corresponding dark-colored bars represent number of CityCell users. There are fewer
mobile users from 1 month to 5 years, while more are using the mobile (other operators) for more than
5 years. On the contrary, more people are CityCell users from 1 month to 5 years while less people
have been with CityCell for more than 5 years. Interestingly, there are no CityCell subscribers using
this operator for more than 8 years! [ Grammen Phone has been in the market for a little more than 8 years,
while oddly enough CityCell has been operating for 12 years! So, even though a sample, where are the long-
time users? ].
This trend may represent that CityCell users for more than 6-7 years have started to switch to other
operators and/or that brand loyalty is low among users of this operator. Its about time that CityCell
should be looking into its customer retention plans and loyalty programs in an effective manner.

42
 Q Why do you like/still use CityCell? OR, why have you switched to this operator?

This question has been put forward to the 42% of respondents who have switched to CityCell in the
past 8 years or so and to that 58% of the sample who are still using CityCell. It is to be noted, out of
this 58%, about 38% are CityCell users from 1 month to 3 years 3 only. So, basically this pie-chart
represents a good opinion of the 42% switchers and of 20% of the CityCell ‘loyalists’, who have been
using the brand for more than 5 years.

The sample has clearly mentioned as lower call rates being the most important reason (33%) of
switching to [and also still using] CityCell. According to the data and trend, these switchings have
taken place predominantly between the last 3 years or so. At that time, CityCell rates were the
cheapest in the market, as suggested by the press advertisements. As of the present, the scenario
would be revealed and discussed later on.
The second most important reason (28%) has been [good] connectivity to BTTB. Again, years back,
CityCell has been the pioneer operator to offer both-way BTTB connectivity. This factor is still
considered as a major feature of CityCell mobiles.
All the other reasons of this question go unheeded as below 7% of the sample have responded to
them.

3
Information analyzed from the previous table.

43
 Do you use any other
Q
connection besides CityCell?

No 47
Yes 33

This is quite alarming for any operator whose sample subscribers reveal that they are using another
connection besides CityCell. Why is that? In which way is CityCell not being able to provide it all for
its valued customers? What is it that other operators are providing more for which CityCell’s profits
are being divided up? The following question may give an idea –

Q If yes, which connection do you use and why? Reasons

Grameen 19 Network 16
Aktel 7 Network 6
Sheba/Banglalink 5 Free SMS 5
Tele-talk 2 T&T i/c free 2

Among the 33 of the 80 respondents who say they use another connection, 19 use GP for the single
most important reason being strong/available network. The same features for Aktel, the second largest
mobile operator now in the country. In other words, 67% of the respondents who use another
connection besides CityCell do so because of the network.

44
Although findings later on will show that CityCell has satisfied its customers with access to BTTB
and arguably the lowest billing rate, the previous findings has demonstrated that it has not been
performing well to retain its subscribers in terms of providing a strong network solution.

45
13.3 Customer Retention Scheme: Loyalty Program

These are some of the benefits that may be offered to loyal/high-end users of CityCell. This is a
feedback from the respondents who opine that discount call rate/line rent and exclusive customer care
are three of the most elusive benefits that can be enjoyed. The privilege service to be introduced to the
loyal/high-end users under the customer retention scheme, includes – exclusive customer care, an elite
privilege card and special discounts to be enjoyed from various stores/shops/eating places, etc. All
these benefits have received good appreciation from the respondents scoring above average for every
case.

Do you plan to stay with CityCell in the next 6 months to 1 year despite the presence
Q
of other operators?

46
Another alarming data which says 45% of the CityCell subscribers may not continue with the operator
and has a good possibility of switching. Again, this calls for rigorous customer retention plans.
Reasons
Yes 44 Image/Loyalty 19
Lower call rates 14

BTTB connectivity or i/c facilities 7

Hassle to change 4
No/I might not
36 Network 24
stay with CityCell
Handset flexibility 9

Attractive package/benefits 6

A good point in this may be that about 45% of the respondents who say that they are going to stay
with CityCell (58%) for the next 1 year or so, state the reason of image/being loyal with the operator.
CityCell can certainly cash in on this customer behavior towards the operator and try its best to retain
the other 45%. Once again the issue of network boils in as a good 65% of this 45% complains of this
as the primary reason of not staying on with CityCell.

If No/might not stay, would the mentioned benefits make you think not to switch to other
Q
operators?

Yes 21
No 13
Maybe 2

This question is in view of the benefits discussed one question earlier. In a surprise reaction, 60% of
the respondents decided to change their minds to switch in the next 1 year or so if the mentioned
benefits were to take effect. In reality, these benefits would not be for the general subscribers but for
those who are CityCell’s long-term or high-end customers. But this response may suggest that the
same may be applicable for those target subscribers. But 42% replied they would still switch to other
operators. The next question is targeted towards these 15 respondents:

Q If No/maybe, what would make you refrain from switching to other operators?

Network 10
Connectivity to mobile 2
Extent of discounts in outlets
1
Nothing would* 2
* No comments!!

80% of these 15 respondents cite the problems of network/connectivity as the factor of switching.

47
13.4 Customer Retention Scheme: Discount services for
subscribers

If one follows each of the colors carefully, one would notice quite some disparities among the
expected and actual figures. For instance, shopping mall is the highest expected type of outlet to be
enjoyed discount from, whereas, there has been only 4 of them covered under the discount scheme
which is placed at no. 5 in the second table. The same goes for music & movie store (light blue), and

48
gift/flower shops (dark brown) and hospitals (placed at no. 2 in the first table, but last in the second
table!). Restaurants & fast food shops have well been taken care of.
13.5 Concerning CityCell

Respondents have cited good connectivity to BTTB (31%) and lower call rates (24%) as two of the
major strengths of the company. On the other hand, worse network (26%), not standard handsets
(20%) and bad connectivity to other mobiles (19%, which is again a representation of a weak network
infrastructure), have been suggested as the three major weaknesses of CityCell. There is a mixed
opinion regarding Customer care as 9% think of it as strength, while 11% terms it as a weakness for
the company. Same goes for Value Added Services (VAS). A good 22 persons of 80 respondents have

49
complained higher call rates as a weakness factor. This is a point to be concerned, as all along, call
rates have been a strong case for the company.

50
This is another way of looking at the strengths/weaknesses of CityCell. Respondents here have been
asked to rate the various factors of the company. 5.82 is the average score for these factors. VAS falls
just above this score, meaning respondents do not think there are enough/useful value added services
in store for them. Quite far below this score is the factor, ‘Initiatives taken by the operator for the
valued subscribers’.
Keeping exactly this in mind, the Customer Care & VAS department of CityCell has planned to
launch a privilege service for a certain portion of its valued customers for the Customer Retention
Plan of CityCell.

51
14. The Customer Retention Scheme for CityCell Subscribers

14.1 Prologue

CityCell has planned to introduce “Trump Card” – a Privilege Service for its valued customers. This
service would allow CityCell subscribers to avail different products and services at a reasonable
discounted price from various renowned outlets [shops, restaurants, department stores, and other kind
of service providers] all around the major cities of Bangladesh. The discount card service has been
divided into four-tiers, depending on the monthly usage history of its valued customers:

• Platinum Card
• Gold Card
• Yo' Card
• Virtual Discount Card (SMS Coupon)

14.2 Objectives of the Privilege Service

The Privilege Service is aimed to have a profound effect on the company and its subscribers. The
main objectives of this service are –

 To retain customers and create loyalty

 To create high-end users among existing subscribers
 To give recognition to high revenue-generating & loyal users of CityCell
 To increase revenue & ARPU4 through possible increased bills and SMS activities
 To provide an extra value to CityCell’s premium users built on the “Because We Care” theme.

14.3 Target Audience

Between post-paid and pre-paid packages CityCell has segregated its customers into two major
categories according to their time period and billing status:

Long-term Customer
High-end Customer

Long-term Customer: These are loyal post-paid subscribers who have been active with CityCell for
a period of 5 years and above.

4
ARPU [Average Revenue per unit]

52
• Active Since 1993 = 302 subscribers • Active Since 1997 = 1,963 subscribers
• Active Since 1994 = 241 subscribers • Active Since 1998 = 1,035 subscribers
• Active Since 1995 = 399 subscribers • Active Since 1999 = 2,454 subscribers
• Active Since 1996 = 706 subscribers

53
  Subscribers who have never been deactivated since 1995 or before that, have completed a
decade or more (10-12 years) with CityCell. In view with this, these customers would be
enjoying the Platinum privilege. This card is entitled to get the highest amount of discount
among the tier. [Approx. 950 subscribers entitled according to data]
 Active subscribers with CityCell since 1996-99, shall be enjoying the Gold privilege. Upon
completion of their 10th year, subscribers in every tier shall be rewarded with Gold Card. For
example, active subscribers since 1997 shall be completing their 10 th year with CityCell on
2007. [Approx . 6,200 subscribers to be entitled from 2006 upto 2009]

High-end Customer:

 Post-paid subscribers paying a monthly bill of over 5,000 Taka would be enjoying the Platinum
privilege.
 Post-paid subscribers paying a monthly bill between 2,500 and 5,000 Taka would be enjoying
Gold privilege.
 Post-paid/pre-paid subscribers who are among the youth segment of the population would be
provided with the Yo card, coming free with a new package called ‘Aalap Call Me’. [ This
package is a full BTTB connectivity package with the unique and innovative
‘Call2Cash’ feature, where subscribers will get Tk. 0.25 added to their account every
minute when they receive calls from other CityCell phones]
 Post-paid/pre-paid subscribers paying a monthly bill of less than 2,500 and not among the
youth segment, can avail the pioneering SMS Discount Coupon service. The Virtual Discount
Card is a completely new discount idea through “SMS Discount Coupon”. This ‘virtual’ discount
coupon can be availed by the subscriber upon typing the name of the shop/restaurant/hospital and
sending the SMS to a designated number of CityCell. Upon receiving this, an SMS Coupon will be
sent to the sender (both Post-paid and Pre-paid subscribers) through SMS with a text containing the
validity period of the coupon. The ‘Coupon’ may have the following message to the sender and the
participating outlet:
‘Welcome to … [name of oulet], you can enjoy …% discount. This is valid for today […date] only. Thank you.’

14.4 Competition

54
There are similar privilege discount cards like, Djuice Xtra Khatir Card by Grameen Phone and
another discount card by Aktel (Not yet launched).

14.5 IMC (Integrated Marketing Communications) Options

The main role of the Trump card advertising would be to give the customer a feeling of being
exclusive. Various promotional activities would be undertaken a few days/weeks from the date of
launch (date of launching yet to be decided).
 Personalized letters mailed to the targeted subscribers along with the Trump Card.
 Newspaper advertisements in major dailies would be a medium to aware the possibilities of the
Trump Card as well as to promote the partners.
 A booklet-styled or a 3/4-fold brochure would also be distributed to the target market.
 Various Branding/Promotional materials would be placed in different outlets for maximum
visibility and clarification to subscribers-cum-shoppers.
14.6 Branding/Promotional Materials

55
  Cards
 Flyers  Danglers
 Stands  Brochures
 Posters  Catalogues
 Stickers  Display Items
14.7 Design Theme
The Platinum card will get the highest amount of discount from the merchants. The card would reflect the
idea of being the most exclusive and precious.
The Gold card will get slightly less discount than the platinum card, but it should not give the customer
the impression of being less important.
The Yo card would have a funky look with lot of colors to appeal to the youth generation.

56
14.8 Benefits

14.8.1 Benefit to Customer/Cardholder:

 Feeling of being honored and privileged

 Discounts from various outlets: reduced expenses in purchasing goods and services
 Participation in different activities/events organized by CityCell
 Exclusive service at CityCell Front Desk & Customer Care (For Platinum & Gold Card-holders only)

14.8.2 Benefit to outlets/valued business partners:

Such introduction of discount cards would have a direct positive impact on the sales of CityCell’s participating
product and service partners. The decision of the amount of discount provided rests solely on the outlets. The
attractive discount offers are sure to increase visit frequency of the subscribers to the participant’s outlets. An
obvious point to mention is that CityCell has a rich portfolio of 4,50,000 eligible subscribers to be registered
for these privilege card/coupon services. This is also an opportunity to enhance the participant’s business
revenue by ensuring a higher sales volume through participating in the Privilege Card Services of CityCell.

 Direct Promotion
 Increased Customer Flow
 Higher Sales Volume
 Affiliation effect with a larger and a more widely-branded organization

Activities from CityCell’s end for the outlets:

 Press campaign
 Press advertisements in leading national dailies
 Separate promotional brochure to be delivered to all the CityCell subscribers
 Supply of Branding/Promotional materials to the participant’s outlet(s)
 Display of outlets’ logo in the SMS coupon

14.8.3 Benefit to CityCell

 Retention of customers
 Lower ‘Customer Discontinuation Rate’
 Increased loyalty among existing customers
 Improved customer relationship & corporate image
Increased Brand-visibility through POS materials at outlets
 High self exposure through CityCell’s high-end & loyal users
 Increased revenue through possible increased bills and SMS activities
57
 Relation of Trump Card with Customer Retention & Loyalty:

 Existing customers would prefer to continue their subscription for the added benefits
 Discontinued customers can be pushed to restore their subscription
 Customer Retention Team can use the Card as an added tool
 Cardholders will be able to participate in various programs/events using their cards

 Increased revenue with Trump Card:

Cardholders will try to keep up their usage to maintain eligibility
Subscribers who lack eligibility for a nominal amount (minimum Taka 2,500 per month) will try to
increase usage to achieve eligibility of holding a card, resulting an increase in revenue
New subscribers will be tempted to achieve eligibility of holding a card, resulting another increase in
revenue
Non-card holders shall be availing the Virtual Discount Coupon through SMS usage thus increasing
revenue collection through VAS (Value Added Service)

 Issues with Strategic Partners:

Complementary Trump Cards can be distributed to strengthen relationship with key strategic partners of
CityCell.

 Benefit to employees of CityCell:

Employees of CityCell shall be provided with a Trump Card (Platinum or Gold, depends on management
hierarchy), through which they would be able to enjoy similar benefits as the high-end subscribers. This would
also add to their job satisfaction and motivation.

14.9 Extent of Coverage of Trump Card Business Partners

 Dhaka:
 Restaurant 39  Book Stores & Music 2
 Fast Food Shop 24  Digital Security 1
 Clothes/Fashion House 15  Education [Coaching] 1
 Hotels & Rest House 11  Manufacturing 1
 Gift/Flower Shop 5  Dry Cleaner 1
 Shopping Mall 4  Bakery 1
 Saree & Gold House 4  Cyber Café 1
 Beauty Care Centre 4  Sweetmeat Shop 1
 Billiard & Pool Centre 3  Hospital & Clinic 1
 Sports Store 2 Total 123
 Furniture House 2

58
 Chittagong:  Sylhet:

 Restaurant 15  Hotel, Restaurant & Fast Food 7

 Hotel 7  Dress, Handicraft & Saree 7

 Fashion & Music 3  Sport 3

 Furniture House 2  Electronics, Cyber Café & Computer 2

 Fitness & Swimming 2  Departmental & Super Store 2

 Cyber Café 1  Jewelry & Gift Shop 2

 Diagnostic Center 1  Travel Agency 1

 Super Shop 1  Others 1

Total 32 Total 25

 Khulna:  Rajshahi:
 Hotel, Restaurant & Fast Food 7  Hotel, Restaurant & Fast Food 4
 Fashion 3  Hospital & Clinic 1
 Shopping Mall 1  Shopping Mall 1
Total 11  Beauty Care 1
Total 7

Grand Total 198

59
 MOU Signup with Merchants

Merchant List with respective discount rates

New Merchants Collection Continues. List will
will be given to the Agency. Agency will
be updated quarterly.
develop all Communication and Deliverable
Materials as per Approval of VAS Team.

Marketing
Agency will provide PBTL Bill Printing Team will
Department will
Deliverable Items to the deliver the Trump Cards to
launch Trump Card
VAS Team to deliver to the Subscribers.
with proper
the Merchants.
Communication
through applicable
media.

Customers will use the Card till

the Validity Period. Afterwards, A Valid Card ensures discount
they will be delivered with a new during bill payment. Merchant
card as per the process. saves a log of card usage.

CityCell Call Center will receive any Merchant sends the log to PBTL.
complain on Non-Entertainment of This log will be used to introduce and
Trump Card by Merchant. calculate Usage Points and Rewards
(similar to Red Rewards)

Figure 14: Flow Chart of activities for the

Platinum & Gold Card for the high-end
subscribers of CityCell

60
 Verification of registrants through e-mail and outbound team.
Yo’ card can be used by users of other mobile operator services.

Send Yo’ card through DM package to Promote to customers through press

verified registrants. ads and venue signage
Provide complimentary cards to outlet
owners that are promotional partners
Distribute cards at events

Track usage through Log Book. Award points to Best Card

User (to be limited to CityCell users only).
Merchants to check for validity of card when card is shown
by customer to avail discount.

Figure 15: Flow Chart of activities for the Yo

Card for the youth segment of the subscribers
of CityCell

61
 VAS Team signs agreement with interested companies

VAS (Engg.) team develops the New merchant collection continues. List will be
Text and Keywords of the SMS with updated quarterly
specific validity period

Required materials/items & other

promotional items will be developed by
the Agency and checked by the VAS
(S&M) Team
VAS (S&M) team also checks &
approves the items to ensure
compliance with participants’.
.requirements.

VAS Team will

Agency will communicate the Marketing dept will officially launch the
deliver
Virtual Discount Card (SMS service by giving newspaper ads and
promotional
Coupon) service to the CityCell other customer communications.
items to the
Subscribers.
participating
merchants
Merchants will
maintain a sheet
Customers will send SMS Push to get the Virtual of the users to be
Discount Card (SMS Coupon) In reply, he/she will provided by
receive an SMS with the Discount Rate and Validity CityCell to
period. declare the Best
Discount Card
user.

After purchasing, customer will show the

Valid Virtual Discount Card (SMS Coupon) CityCell Call Center will receive any complain on
while payment. Non-Entertainment of Trump Card by Merchant.
62
 Figure 16: Flow Chart of activities for the
Virtual Discount Card (SMS Coupon) for
the subscribers

14.10 SWOT Analysis of the Privilege Services of CityCell

 Strengths

 Previously launched in July 2002 so the brand name is well-established

 Only loyalty card in the industry that covers all classes of customers
 Launching with 198 Signed Merchants
o GP has launched XTRA Card with 15 merchants only
 Merchants in 5 major cities
 4 Tier Discount Cards
 Exclusive Cards for Post-paid Subscribers
 Continuous Effort to increase Merchants

 Weaknesses

 Less than 35,000 (lowest subscriber base) eligible Post-paid Privilege card holders in launching phase
 No full-time dedicated employee to maintain and run the program

 Opportunities:

 Introduction of “Points” System on card usage

 Introduction of Branding Activity through the signed Merchants/participants
 Other merchants may and will be interested in carrying the card once they see how it attracts traffic
 Nationwide coverage (future)

 Threats

 Introduction of Competitor’s Privilege Card

o GP already launched XTRA Card through “djuice”, may go for increasing merchants and merchant
loyalty by offering extra-privileges to them.
o AKTEL is actively working on launching Privilege Cards which would be launched any time soon.
 Merchants’ non-cooperation in entertaining the discount cards can result in a bad impact on the brand and
organization

63
15. Recommendations

I have designed my recommendations concerning the ‘Customer Retention Scheme’, aiming to help improve
CityCell in retaining its customers. I have also tried to present recommendations about current weaknesses of
the company and about various factors of dissatisfaction among the existing subscribers. My recommendations
are:

 The Privilege Services of the Customer Retention Scheme of CityCell should be launched as soon as
possible as ‘djuice’ of Grameen Phone has already started to saturate a certain segment of the market
through its ‘X-tra Khatir Card’. As first-movers advantage, GP has already secured a confident berth ahead
of CityCell.

 The types and numbers of discount outlets brought under the Discount Service scheme should seriously be
reconsidered and restructured following a more extensive survey. My research clearly shows a gap between
customers’ expectations and outlets already brought under the discount service.

 There are a few benefits mentioned in the questionnaire, such as discount call rates, discount line rents, etc.
which have received quite an applause from the respondents. A few more creative and worthy benefits
[appreciated by the loyal subscribers and cost-effective for CityCell] can be brought into the pipeline and
introduced as benefits for the loyal customer faction.

 Privilege Services for the subscribers is not the only means by which CityCell can afford to retain its loyal
customers. Immediate and effective solutions should be taken in terms of its weak areas as pointed out by
the respondents.

 CityCell needs quick expansion in network development all over Bangladesh if it wants to keep its
customers to stay with it. If there is any other provider with same options with country wide network (and
there is!), it will be a disaster for CityCell. Already customers have been switching to other operators as
their second option as a result of their poor network infrastructure.

 Although CityCell has ‘lower call rates’ associated with its brand name, other operators have already come
up with various attractive packages and options such as, My Time, My Choice, [GrameenPhone], 10
second pulse and BTTB incoming free for the 1 st minute for all pre-paid subscribers [Aktel], double talk-

64
 time for a single prepaid card [Banglalink]. So there should be more initiatives and striking benefits for
their subscribers a la its loyal & high-end users.
 The Value Added Service (VAS) department should be coming up with more ideas to entertain its
customers. This department has its potential but should be using it to the fullest to provide even more
useful services to cater to customers’ needs and wants.

 Customer Care has turned out to be one of the most focused points in the telecom industry. Survey results
show subscribers expect a lot out of it and would appreciate special care facilities. Therefore the ‘Call
Center’ should be open to all kinds of queries of the customers. The number of helpline officers should be
appropriate in order to reduce the queue where the customers would be waiting on line. CityCell can
initiate a number training programs or psychological courses to train the officers and executives of the
‘Front office’ and ‘Direct Sales’.

 Availability of quality handsets is a major and growing concern among CityCell subscribers. may go for
strategic alliance with Mobile phone manufacturer like LG Electronics, Motorola, Nokia, Samsung,
Audiovox Corporation or Hyundai or other CDMA phone manufacturer to have technical support and for
availability of various CDMA sets.

65
[

16. Conclusion

I would like to start the conclusion part by restating the hypothesis of my study. My hypothesis was “Although
PBTL brought ‘CityCell’ as the first mobile telecommunication service in the subcontinent but its customers
are not fully satisfied with the service. If PBTL does not take care of these dissatisfactions and another
company enters the market with similar offers, it will be difficult for PBTL to retain its subscribers, thus
maintain its position and increase its market share”.
From the analysis of the survey results, it is clear that CityCell’s subscribers are dissatisfied about different
services of the company. Moreover, the analysis indicated that the subscribers are not quite loyal to the
company. Some of the respondents have clearly pointed that if CityCell does not work on its weaknesses, they
will not hesitate to switch. So, my hypothesis proves to be a valid one. I firmly believe that if CityCell follows
my recommendations, it will be able to achieve a sustainable distinctive competitive advantage and to run
smoothly with loyal subscribers & market leadership.

66