Key Strategies For Operators Growth In Developing Markets

KEY STRATEGIES FOR OPERATORS GROWTH IN DEVELOPING MARKETS

DEVELOPIING MARKETS -KEY CHARACTERIISTIICS Low mobile penetration levels and large uncovered population Few operators or significant difference between market share of operators Price sensitive Huge investor interest in mobile licenses, acquisitions and mergers

DEVELOPIING MARKETS – PAKIISTAN Winner of “GSMA Government Leadership Award” for excellence in Govt. reforms in the telecom sector in 2005 Coverage limited to 30% geographically and over 50% of the population Vast untapped market; 41% of addressable market is up for taking Penetration is over 22% now, was just 3% in 2004 Exponential growth in subscribers base crossing 30 million now increasing at around 2 million subs per month

GSM DEVELOPMENT It took approximately twelve years to reach 1 billion GSM subscribers in 2004, but only two and a half years to cross the 2 billion mark in 2006 GSM base is expected to cross 3.3 billion by yr 2010 The highest growth in the world has been observed in the Asia region China and India had been leading in term of numbers but in terms of growth rate Pakistan is the leading market in the region

PAKIISTAN MOBIILE SECTOR – UFONE 1st to launch GPRS, MMS, SMS bucket in the country Over 5 million subs addition in last 12 months Attractive and simple pricing Network coverage in over 750 destinations IR agreements over 200 operators

PAKIISTAN MOBIILE SECTOR –– UFONE -Conttd.... Youth focussed brand Strong brand loyalty Multi-tier distribution model Around 250 Franchisees 25 company owned Customer Service Centres New Call centre with more than 400 agents

STRATEGIIC GROWTH AREAS Coverage expansion Brand building Customized offers Market differentiation Maintaining competitive edge Synergies (Inter-Operator and 3rd party)

Coverrage Expansiion Expansion in coverage is the fastest way to capture the remaining addressable market – 1st mover advantage Developing Network in uncovered areas at a fast pace Multi Vendor Strategy &Turn key contracts Ensure seamless mobility

Coverrage Expansiion -- Conttd.... Infrastructure sharing – reducing operational & fixed costs Use technology to go beyond GSM’s usual limits 35Km, can be doubled Smart Radio Concept being utilized to extend coverage in rural areas Promoting healthy competition

Brand Building Developing trust through QoS, pricing simplicity and transparency Rewarding loyal customers High quality and efficient customer service Segmented product portfolio to build a strong brand base Reinforce brand image & presence by proper positioning- Creating prestige value for the brand

Custtomiizzed Offfferrs – IInttelllliigentt Segmenttattiion Developing markets dominated by low-end, lowARPU customers (largely untapped) Targeting the emerging segments – middle class Focussed advertising & focussed brand building targeted on the biggest market segment – YOUTH (40% of population) Customizing packages for the small but profitable (high ARPU) Corporate/SME segment

Marrkett Diifffferrenttiiattiion With the basic product becoming homogeneous it is becoming very important to introduce differentiating offers Technology improvements – a continuous process Maintaining a technological dominance - GPRS, 3G Innovative products for enhancing revenues - VAS Development of products should be based on analysis of - Subscriber behavior & preferences - Competitor strategies - Overall market dynamics Being a leader not a follower

Maiinttaiiniing Compettiittiive Edge Product design and rollout - Fast and effective Outsourcing non core functions - network rollout, bill printing, customer verification etc. Building economies of scale Strong Distribution network provides a competitive advantage - Lower distribution cost - High level of retail penetration – maximize sales

FACTORS INHIBITING GROWTH Delays in roll out – site acquisition & NOCs Activation tax Price war- Confusing consumers - Multiple tariffs & tariff clutter Handset prices – sub US$30 handset expected next year

ISSUES LINKED WITH GROWTH Pressure on Quality of Service (QoS) Maintaining Customer care Expanding distribution network Efficient Complaint Management System Customer verification and recording antecedents

CONCLUSION Scaling up of operations during strong growth phase is necessary for continued success Growth does not mean compromise on quality of service Plan for long term gains while utilizing available opportunities Continuous innovation and technological advancement

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