Market In

Contents Chapter #

Topic

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Introduction to Marketing

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Concept of Marketing Evolution of Marketing Modern Marketing Definition of Marketing Main steps in Marketing Process Introduction to the telecom sector of Pakistan Restructuring of PTCL Mobile policy 2004 & tender Telecom market overview PTA & the development of Telecom sector Development of telecom sector in Pakistan Growth of telecom sector in Pakistan A brief Introduction about Mobilink and Paktel About Mobilink Vision Values Achievements Human Resources History of Paktel Why Paktel Introduction to GSM and coverage of Mobilink What is AMPS What is GSM Coverage of Paktel Coverage of Mobilink Comparison Current mobile cellular Landscape in Pakistan Pakistan Mobile communication Paktel Ltd Pak telecom Mobile

1 2 4 5 6 7 8 9 10 11 15 20 23 23 24 24 25 25 26 28 29 29 29 30 30 31 32 32 32 33 1

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Pak com LTD. Instaphone Telenor Warid Telecom Designing Marketing Mix & Customer segmentation Marketing Mix Target Market Market segmentation

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33 34 34 35 35 36 37 39

Price What is Price Pricing Segmentation Mobilink‘s Packages Prepaid Packages Post-paid Packages Paktel Packages Prepaid Packages Postpaid Packages Comparison 8

39 39 40 40 44 46 46 47 48 50

Product What is product Mobilink‘s product Prepaid Postpaid Value added services Paktel‘s products Prepaid Packages Postpaid Packages Value added services Comparison 9

50 50 50 51 52 55 55 55 57 61 63

Promotion Objectives Advertising What Mobilink communicates What Jazz communicates Brand identity Advertising of Paktel Communication of Paktel Tango Comparison Publicity

63 64 64 65 66 67 68 68 69 71 2

Advertising versus Publicity Sales Promotion 10

72 72 75

Place

11

12 13 14

Place strategy Types of channels Comparison Marketing channels Various strategies adopted by Mobilink & Paktel Competitive advantage Winning Marketing Practices Competitive advantage of Paktel over Mobilink Competitive advantage of Mobilink over Paktel Marketing strategies for competitive advantage Market leader strategies Market follower strategies BCG Matrix Overall comparison Results of our survey SWOT Analysis & Recommendations Conclusion

75 75 76 78 79 79 80 81 81 82 82 83 84 85 89 90

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Marketing, in economics, that part of the process of production and exchange that is concerned with the flow of goods and services from producer to consumer. In popular usage it is defined as the distribution and sale of goods, distribution being understood in a broader sense than the technical economic one. Marketing includes the activities of all those engaged in the transfer of goods from producer to consumer—not only those who buy and sell directly, wholesale and retail, but also those who develop, warehouse, transport, insure, finance, or promote the product, or otherwise have a hand in the process of transfer. In a modern capitalist economy, where nearly all production is intended for a market, such activities are just as important as the manufacture of the goods.

Concept of Marketing Simply stated, the marketing concept means that an organization should seek to make a profit by serving the needs of customer groups. The concept is very straightforward and has a great deal of commonsense validity. Perhaps this is why it is often misunderstood, forgotten, or overlooked.

The purpose of the marketing concept is to rivet the attention of marketing managers on serving broad classes of customer needs (customer orientation), rather than on the firm‘s current products (Product orientation) or on devising methods to attract customers to current products (selling orientation). Thus effective marketing starts with the recognition of customer needs and then works backward to devise products and services to satisfy these needs. In this way, marketing mangers can satisfy more effectively in the present and 4

anticipate changes in customer needs more accurately in the future. This means that organizations should focus on building long-term customer relationships in which the initial sale is viewed as a beginning step in the process, not as an end goal. As a result, the customer will be more satisfied and the firm will be more profitable. The principal task of the marketing function operating under the marketing concept is not to manipulate customers to do what suits the interest of the firm, but rather to find effective and efficient means of making the business do what suits the interests of customers. This is not to say that all firms practice marketing in this way. Clearly, many firms still emphasize only production and sales. However effective marketing, as defined in this text, requires that customer needs come first in organizational decision making. One qualification to this statement deals with the question of a conflict between consumer wants and societal needs and wants. For example, if society deems clean air and water as necessary for survival, this need may well take precedence over a consumer‘s want for goods and services that pollute the environment. In short concept of marketing is choosing and targeting appropriate customers positioning your offering interacting with those customers controlling the marketing effort continuity of performance

Evolution of Modern Marketing The origins of marketing can be traced to people's earliest use of the exchange process: barter (trading one resource for another-- for example, food for animal pelts). To accommodate the exchange process, trading posts, travelling salesmen, general stores, and cities evolved along with a national monetary system. During the later 1800's the Industrial Revolution marked the beginning of the modern concept of marketing. Until this time, exchanges were limited because people did not have surplus items to trade. With the onset of mass production, better transportation, and more efficient technology, products could be manufactured in greater quantities and sold at lower prices. People began to turn away from self-sufficiency (such as making all of their clothes) to purchases (such as buying a new suit or dress). Improved transportation, densely populated cities, and specialization also enabled more people to participate in the exchange process. During the initial stages of the Industrial Revolution, output was limited and marketing was devoted to the physical distribution of products. Because demand was high and competition was low, companies did not have to conduct 5

consumer research, modify products, or otherwise adapt to consumer needs. Their goal was to increase production to keep up with demand. This was known as the Production Era of marketing.

Once a company was able to maximize its production capabilities, it hired a sales force to sell its inventory. At first, while the company developed its products, consumer tastes or needs received little consideration. The role of advertising and the sales force was to make the desires of consumer fit the attributes of the products being manufactured. For example, a shoe manufacturer would produce brown wingtip shoes and use advertising and personal selling to convince consumer to buy them. The manufacturer would not determine consumer tastes before making shoes and adjust output of those tastes. This was known as the sales era of marketing. As competition grew, supply began to exceed demand. A firm could not prosper without input from marketing. A marketing department was created. It conducted consumer research and advised management on how to design, price, distribute, and promote products. Unless the firm adapted to consumer needs, competitors might be better able to satisfy consumer demand and leave it with surplus inventory. Although the marketing department participated in company decisions, it remained in a subordinate or conflicting position to production, engineering, and sales departments during this period of evolution in marketing. This was known as the marketing department era. In the past twenty years, many firms have recognized the central role of marketing; and the marketing department has become the equal of others in the company. At these firms, major decisions are made on the basis of thorough consumer analysis. Competition is intense and sophisticated. Consumers must be drawn and kept to the firm's brands. Company efforts are integrated and frequently re- evaluated. This is known as the marketing company era.

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Modern Marketing At all points of the modern marketing system people have formed associations and eliminated various middlemen in order to achieve more efficient marketing. Manufacturers often maintain their own wholesale departments and deal directly with retailers. Independent stores may operate their own wholesale agencies to supply them with goods. Wholesale houses operate outlets for their wares, and farmers sell their products through their own wholesale cooperatives. Recent years have seen the development of wholesale clubs, which sell retail items to consumers who purchase memberships that give them the privilege of shopping at wholesale prices. Commodity exchanges, such as those of grain and cotton, enable businesses to buy and sell commodities for both immediate and future delivery. Methods of merchandising have also been changed to attract customers. The one-price system, probably introduced (1841) by A. T. Stewart in New York, saves sales clerks from haggling and promotes faith in the integrity of the merchant. Advertising has created an international market for many items, especially trademarked and labelled goods. In 1999 more than $308 billion was spent on advertising in the United States alone. The number of customers, especially for durable goods, has been greatly increased by the practice of extending credit, particularly in the form of instalment buying and selling. Customers also buy through mail-order catalogs (much expanded from the original catalog sales business of the late 1800s), by placing orders to specialized ―home-shopping‖ television channels, and through on-line transactions (―e-commerce‖) on the Internet. Services are marketed in much the same manner as goods and commodities. Sometimes a service, like that of a repair person or physician, is marketed through the same act that produces it. Personal services may also be brokered by employment agencies, booking agents for concert or theatrical performers, travel agents, and the like. Methods of marketing now include market research, motivational research, and other means of determining consumer acceptability of a product before the producer decides to manufacture and market it on a large scale.

Definition of Marketing Marketing includes identifying unmet needs; producing products and services to meet those needs: and pricing, distributing, and promoting those products and services to produce a profit. ‗Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably‘ 7

The Chartered Institute of Marketing ‗The right product, in the right place, at the right time, and at the right price‘ Adcock et al ‗Marketing is the human activity directed at satisfying human needs and wants through an exchange process‘ Kotler 1980 ‗Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others‘ Kotler 1991 Simply put Marketing is delivering customer satisfaction at profit.

Implications of marketing Who are our existing / potential customers? What are their current / future needs? How can we satisfy these needs? Can we offer a product/ service that the customer would value? Can we communicate with our customers? Can we deliver a competitive product of service? Why should customers buy from us?

Successful marketing requires: Profitable Offensive (rather than defensive) Integrated Strategic (is future orientated) Effective (gets results)

Some Misconceptions about Marketing Misconceptions about Marketing Marketer create needs, manipulate people to buy something they don't want Marketing = selling = advertising Marketing = shoes polishing Customer will favour those products that offer the most quality, performance & innovative feature 8

The main steps in Marketing Management Process Marketers see the marketing management process as consisting of five basic steps that can represented as: R

STP

MM

I

C

Where: R = Research (i.e., market research) STP = Segmentation, targeting, and positioning MM = Marketing mix (getting known as the four P‘s .i.e. product, price, place & promotion) I= Implementation. C = Control (getting feedback, evaluating results, and revising or improving STP strategy and MM tactics

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An overview of Pakistan’s telecom sector Pakistan is a huge potential market that appears to be approaching the tipping point of achieving rapid and sustainable growth. The government recognizes that the low level of network penetration is an obstacle to broader reforms of the economy and is deliberately moving to create a disciplined and positive investment climate for the sector. The Pakistan Telecommunication Authority is executing three bold changes: introducing open licensing for basic services; restructuring the dominate carrier, PTCL, with an eye towards swift privatization and introducing two new mobile services providers in 2004 to complement the four existing players already in the field.

Telecom policy environment For many years Pakistan adopted a traditionalist approach to the telecommunication sector. The state monopoly served as a cash cow: rate rebalancing was largely ignored; international traffic was constrained; investment was directed disproportionately towards rural areas; and taxation on both carriers and consumer devices slowed market demand. Pakistan has recently embraced drastic steps to reform the sector, best captured as three broad themes: Opening the market for basic fixed line services to competition through minimal licensing requirements, Renewing efforts to restructure and privatize Pakistan Telecommunication Company Limited (PTCL), the incumbent operator; and, Updating its mobile sector policy, including introducing two new operators in 2004. While the changes are positive, Pakistan remains cautions in its approach to industry reform. Whereas many countries are adopting unified licenses, and genuinely technology neutral regulation, Pakistan has chosen to segment the market according to local, long distance and mobile services. This segmentation will create artificial distinctions between service types, skewing both market demand and efficient distribution of investment capital. The bench mark legislation for telecom is the Pakistan Telecommunication (Re-organization) Act 1996. The law established the regulator, the 10

Pakistan telecommunication authority, PTA, created PTCL as statutory corporation (which was later partially privatized through a public market listing) and granted PTCL a monopoly over basic services until December 31, 2002. among others matters, the PTA was initially embedded within the ministry of Information. With the appointment of current PTA chairman, Major General (Retired) Shahzada Alam Malik in 2001, the PTA has exerted its identity as an independent force.

Restructuring of PTCL The government‘s efforts to restructure and privatize PTCL have been onagain off again since 1991. It had an offer in the late 1990s for 26 percent equity, reputedly totalling $3 billion, but held out in negotiations and ultimately missed the unique global market window at that time. PTCL and the government are contemplating different strategies options for restructuring. Plans have been vetted for both a geographic and functional split of operations. Analysts believe the most likely scenario is a break up into three new companies, tracking with the firm‘s largest business units: local, long distance and mobile. This approach mirrors the policy environment fashioned for new competitive entrants. From the government perspective, breaking up PTCL prior to sell-off will help curtail the market power of any one single service provider, thereby stimulating competition. Unbundling the sale will also likely increase revenues for the government. The risk, of course, is that the mobile company PTML (branded as “Ufone”), is proportionately more attractive than the other business. According to AKD securities, PTML’s contribution of PTCL total revenues is expected to rise to 12.5% over the next five years – and contribute 39% of PTCL‘s overall revenue growth. Future growth of mobile sector, both in terms of subscribers and net revenue, will almost certainly outstrip demand for fixed line services. The target is to sell up to a 26% stake in PTCL; the government currently holds 88 % of shares. Some estimates place the value of the tranche at around $1 billion PTCL‘s net profit for the year ending June 2003 was 23 billion rupees ($400 million). Splitting up PTCL could take at least two years or longer, complicating hopes for a quick disposal. Leading international investors that have publicly stated their interest in the sale include Singapore Telecommunication Ltd. Egypt orascom Telecom Holding, Saudi firm Oger and the Menara Telecom consortium. PTCL needs a fundamental shakeup of its corporate culture, and a massive reduction in staff. A criminal proceeding began in march 2004 involving 11

senior PTCL and Mutt representatives regarding a 305,000 line network between PTCL and china wan bao/ZTE dating from 1998.

Mobile policy and 2004 Tender On February 9, 2004, the PTA released an Information Memo random announcing the tender for two additional mobile cellular licenses to complement the four operators already in service. It also began circulating a draft mobile cellular sector policy that out-lines the government‘s strategies objectives. An auction was held on April 14, 2004 with winning bids submitted by Norway based Telenor and UAE-based Warid Telecom. The license fee is 291 million, estimated to be equivalent to approximately 28 times current monthly subscriber revenues. While nominally a technology neutral competition, it is evident that the government is taking a managed, interventionist approach to market forces. The mobile tender made available 27.2 MHz of spectrum in the 900 MHz and 1800 MHz frequency bands that are characteristically reserved for GSM. Only minimal frequency was being made available in bands that support CDMA or alternative technologies such as PHS. No allocation was made at 800 MHz and only 5 MHz of spectrum was allocated in the 1900 MHz band. The government appears to have adopted a “pro-GSM” strategy to the deliberate exclusion of CDMA. In late 2003 the government approved for use the Extended GSM (E-GSM) band at 890 MHz – 894.8MHz. E-GSM is a seldom–developed technology scheme that does not have wide spread vendor support. It also encroaches on frequencies that are more efficiently applied for wire less local loop or full mobility services engineered explicitly for the 800 MHz band. Americans firm of course produce systems for both GSM and CDMA are positioned to compete as local market dynamic warrants. The more serious policy issue is that the government is not enabling market force to flourish. Instead, the bureaucracy is picking de facto technology standard through bandwidth allocation, and is determining hoe radio source will be used. It bears nothing that GSM provides are currently not allowed to deploy fixed WLL applications, despite the technology‘s inherent ability to do so. In the end, the government‘s own strategic objective of quickly raising tele density from the current 2.9 % will be undermined by failing to encourage a marketoriented spectrum plan. Additionally, the spectrum policy does not encourage market innovation with new technologies. For example, there is not now explicit provision for unlicensed spectrum such as WiFi and similar bands, nor is there specific 12

endorsement of a petition process for industry participant to request new allocation based on emerging technologies. By settling on a traditionalist approach, the government is at risk of artificially constraining wireless network supply, creating unnecessarily high service charges, and depriving the economy of much needed stimulus from lower communication cost. Government officials maintain that the current spectrum allocation plan is the result, in part, of a past lack of discipline in making assignments. For example, PTCL currently holds 40 MHz of spectrum 1900 MHz that it is using for trunk microwave radio. The company will be required to retire some of that capacity. Paktel, a GSM operator, will relinquish 20 MHz at 890 MHz. The military will also free about 5 MHz of spectrum in the 800 MHz band, opening up and estimated 25 MHz by 2005. All will be compensated by the government. Bringing structure to frequency assignments is highly commended, and a proposed band plan and frequency monitoring for the Frequency Allocation Board will be valuable. In the near term, however, the government is enacting policy and defining the scope of market opportunity on the basic of narrow and restrictive interpretation of technology potential. As significant, the government has chosen to adopt an auction for the spectrum in the current tender. Industry observers expect bids of $100 million, and some estimates for the value go much higher. Existing operators, who obtained their frequencies through allocation, will be required to make retroactive payment to match the new bids. The government thus hopes to raise at least $600 million and possibly more, through the competition. The government appears to clinging to its historical tendency of treating telecom as an income source. Recent experience in global markets suggests that the spectrum auction will constrain capital available for infrastructure expansion, raise real costs of service, and dampen expansion by existing service providers. Some observers expect litigation from one or more of the existing operators. The government believes, however, that the transparency associated with an auction process out weights potential abilities. The net effect of introducing addition mobile competition is to in crease mobile density from the current level of 2.3 percent. The PTA believes that mobile customer base could increase 3 to 4 percent per year and mobile phone density reach more than 10 percent in a few years time.

Telecom market Overview 13

As of November 2003, Pakistan had just over 4 million fixed telephone lines in service, yielding a tele density of approximately 2.9%. The low penetration is widely regarded to be a major impediment to economic growth. PTCL installed around 1.19million fixed lines since June 2001 and plans to add 690,000 new subscribers over the next two years; it is by far the dominant operator. The National Telecommunication Corporation (NTC) handles Government and military communication and has nationwide presence with 72,000 customer access lines and a nationwide fiber backbone. Additionally, the special communication organization (SCO), established I 1976, provides public network services to politically sensitive regions such as the Azad Jammu and Kashmir and Northern areas. SCO operates a network of about 60,000 lines. According to PTA, as of 2002 total financial turnover for the sector was 2.2 billion. Of this, PTCL accounted for approximately 79%,mobile companies earned 13 % ,internet service providers had 4 percent , and pay phone companies (of which there are over 177 operators running 129,000 PCO booths), 3 percent. As estimated 60 to 70 percent of the population in rural areas has no access to telecom services. According to the De-Regulation Policy, PTCL is obliged to install no fewer than 83,000 new lines per annum in rural areas and under served areas until end 2008. PTCL plans to widely adopt CDMA WLL to accelerate build-out in rural areas. In addition to PTCL, and the new franchises expected, Tele Card is pursuing the fixed line market with CDMA wireless. The company, led by the Arfeen Group, started as a pay phone operator in 1992, and has introduced public call offices nation-wide. It went public in 1995 and became the first listed, privately-owned telecom operator in Pakistan. Lately, it has established a joint venture with Pakistan Telecommunication Company. To install and operate a wire less local loop network. The project will be implemented in three phases, at a total estimated cost of $126 million.

PTA and the Development of telecom sector Pakistan Telecommunication Authority (PTA) was established under Pakistan Telecommunication Reorganization Act 1996. The broad objectives of the Authority are to promote availability of efficient and cist effective telecom services and regulate the establishment, operation and maintenance of modern telecommunication systems in Pakistan. The authority is also responsible to watch the interests of consumers by ensuring high quality service at affordable rates. Pakistan telecommunication 14

industry is in the process of transformation, spurning the age old state owned monopoly to a deregulated competitive structure. PTCL‘s exclusivity for the provision of basic telephony has virtually been abolished with the announcement of de-regulation policy on 13th July, 2003. As such there is an ample room for the expansion of telecom sector to meet the growing demand of the people for telecom systems and services. Tele density in Pakistan stands at 2.8%, which is quite low compared to international standards. In contrast with urban localities, tele density in rural areas of Pakistan is quits negligible. Over the years, PTA has taken concrete steps and provided a number of incentives to the investors for the growth and development of telecom sector. A liberal, transparent and nondiscriminatory licensing policy is being followed by PTA to provide a liberalized environment for the promotion of telecom systems and services. PTA‘s open licensing policy for value added services aims at fording a level– playing field to all stake holders. PTA has issued a total of 521 licenses for telecom services till May 2004. Out of these, 127 licenses were issued for Electronic Information Services (EIS), 30 for non voice communication network services, 275 for card pay phone services, 25 for data communication services and one for video conferencing. Similarly, 22 HF/VHF/UHF private land mobile/fixed, 6 in mar sat/satellite phones and 12 amateur licenses were issued during the current year. Six satellite companies also registered themselves with PTA. The most significant development in the cellular market was the introduction of Calling Parties Pays (CPP) regime, making incoming calls free on mobile phones. This has changed the market scenario dramatically. The customer based jump from 0.3 million in June 2000 to 3.87 million in February 2004. PTA gave incentives to the operators by reducing royalty, decreasing interconnection charges and airtime tariff. All these factors made mobile phone affordable for a common man. As a result, PTA accomplished the task of awarding two more licenses through open and transparent bidding held on 14th April 2004. Two licenses were issued at a total cost of US $582 million to the highest bidders, M/S Telenor, a Norwegian telecom giant and UAE based Warid telecom on 26th May 2004 after payment of 50 % of the total bidding by each company. Remaining 50 % of the bid amount will be deposit by the companies in equal instalments in 10 years. The license awarding ceremony was witnessed by the president General Pervaiz Mushrarraf, who expressed satisfaction at the bidding process and hoped that the two companies would provide best and affordable services to their subscribers in Pakistan. 15

Later, in a press conference the companies‘ representatives spelling out their business plans stated that each company would make an investment of US $1 billion in the next couple of year as part of their business strategy. Induction of new operator in fixed line telecommunication serves will immensely increase tele density and bring at par with the regional countries in 5 years. The authority reduced air time tariff ceiling from 1st May 2002 to Rs. 5.75 per minute. CPP charges were also reduced from Rs. 3.68 to Rs. 3.22 per minute (including GST). Reduction in CPP charges was aimed at providing some relief to the fixed-line users for their calls addressed to the mobile networks. Similarly, a considerable relief was provided to the cellular mobile operators through reduction in PTCL‘s lease line and PTA‘s spectrum and royalty charges in consideration of the fact that the industry should also share the relief with the service users. PTA also accorded approval to the reduction of fixed line call charges, giving relief up to 23 % to the consumers. Besides, approval was also accorded to the reduction of installation charges for urban and rural areas up to 73%. To monitor performance of the service providers, the authority conducts surveys from time to time to ascertain the quality of service (QOS) of cellular mobile operators (CMTs) as well as those of Internet Services Providers (ISP). PTA has extended a number of incentives to the service providers for the promotion of the industry. For this purpose royalty payable by the cellular mobile operators under their respective license was reduced from 4% to 0.5% of gross sales revenue minus PTCL call charges and lease line charges. PTA also facilitated interconnects arrangement among the four mobile operators to enable mobile phone subscribers to send and receive SMS from any mobile company in the country to the network of any other operator. Besides, PTA reduced type approval fee from 55 to 33% on local manufactured and imported equipment respectively. The authority is striving hard for creating an enabling atmosphere and providing a level playing field to the prospective investors well as expansion and growth of this vital industry so that a common man could benefit from the use of telecom facilities not only in urban areas but also in the remote and far flung areas of country.

Mobile Phone Users Increasing 16

There was a time when obtaining a telephone connection for one‘s residence or office took 5 to 10 years, besides extra ordinary efforts and use of powerful approach in relevant quarters. Now the time has changed and due to entry of mobiles and wireless phones companies people get telephone connection within a few hours. Ten years age the concept of mobile, cellular and wireless phones were something we only saw in the movies, or they were available to very privileged. Each year, statistics shows that, on average since 2002, 10,000 people are getting connected to mobile phone networks around the country. Mobile phone is now everywhere. Large number of students in colleges, universities and technical institutions and employed persons even in lower grade businessmen, tailors, passengers in rickshaws, doctors are using it. It has helped doctor make effective decisions everyday. People seem to be getting more and more linked to this expending network of communication, and with endless packages available. Pakistan cellular industry started in mid-1990s after the government of Pakistan, through the ministry of communication, issued two licenses to set up and operate national cellular telephone network in the country. The first of such licenses was awarded to Pakcom limited, operating under the brand name of ‗Instaphone‘ and second one to Paktel limited, a joint venture company, majority of it owned and operated by cable and wireless PLC. Both companies were awarded these licenses for an initial period of 15 years. Both setup advance mobile phone services (AMPS) an analogue standard based network covering a large part of urban Pakistan, subsequently, Instaphone installed a digital version of analogue technology D-AMPS whereas Paktel has recently been awarded GSM license for an initial period of two years. The state telecoms regulator believes there is ―a huge unmet demand‖ for mobile phones in Pakistan‘s 145 million people. At present Pakistan has a fixed telephone penetration rate of 2.7. Telephone lines per 100 people. After deregulation, the land line telephone penetration is expected to raise 5.6 % or 9.0 million lines by the yeas 2010. Pakistan currently has four mobile operators: Mobilink, Ufone, Paktel and Instaphone. Two cellular companies currently operate analogue mobile phone systems (APMAS) while two other run GSM network in Pakistan. The total subscriber base was 3.8 million as on February 29, up from 1.4 million in June 2003. The government is keen to expand the number of mobile users to at least 15 million, as part of its plans to attract upon $1.5bn worth of telecoms investment in the next three years. At present the private sector owns more than 80 percent of the market share, and would own even more the once expansion plans are fully implemented. 17

Development of ICT in Pakistan For long the planners failed to recognize the importance of telecommunication in the economic development. It was assigned a very low priority in the development program. Consequently international financial and donor agencies sponsoring tele communication projects in a big way as a crucial part of development. This was the era when the world was awakening to the diminishing state of non renewable resources. It was established by various independent studies that excessive and inequitable use of such resource was having adverse effect on the environment and was cause of rampant and ever increasing poverty in the world. Key source of fossil energy and fresh water are fast decreasing and may cause catastrophic consequences for the humanity if suitable mitigating steps are not taken to address the issue. Therefore arose the concept of sustainable development which emphasizes judicious and conservative use of these perishable resources. Creating awareness of the concerns and consequent threat to the mankind, it was recognized early on, was the function of poverty alleviation, and delivery of health care and education to the disadvantage sections and regions of the society. The telecommunication thus assumed increasing importance in the milieu. Emergence of internet impacted the situation in way undreamt of hitherto. It opened new vistas of ubiquitous availability of information. Knowledge, expertise & distribution channels for marketing. The problem was, however, there existed wide gap of availability of digital access to the telecommunication which was pre-requisite for exploiting the benefits of information-society. This was recognized as a digital divide. Intense negotiations, spanned over a period of two years following Tokyo Declaration, in a multi stakeholder process that included governments, intergovernmental agencies, NGOs, businesses and the media, a Declaration of principles and an action plan was agreed at summit. The 1100 delegates agreed on the ―importance of ICTs as an essential requirement for an inclusive information society and embraced the idea of universal, accessible, equitable and affordable ICT infrastructure & services as a key goal‖. The following aspects may be taken into account in the establishment of the national targets, considering the different national circumstances: 1. Connecting villages with ICTs and establish community access points; 2. Connecting universities, colleges, secondary schools and primary schools with ICTs; 18

3. Connecting scientific and research centres with ICTs; 4. Connecting public libraries, cultural centres museums, post offices and archives with ICTs; 5. Connecting health centres and hospitals with ICTs; 6. Connecting all local and central government departments and establish websites and email addresses; 7. Adapting all primary and secondary school curricula to meet the challenges of information; 8. Society, taking into account circumstances; 9. Ensuring that all of the world‘s population has access to television and radio services; 10.Encouraging the development of content and to put in place technical conditions in order to facilitate the presence and use of all world languages on the internet; 11.Ensuring that more than half the world‘s inhabitants have access to ICTs within their reach. Ministry of IT&T and PTCL have been conscious of the potential role of ICT in the development of the country from the very out set. The present government and especially the Minister of IT&T has been actively engaged in expanding the reach of ICT in the country. Following are some of the policy initiatives taken by the ministry to bridge the digital divide: Proclamation of Deregulation policies for fixed and mobile telephony services, in pursuant whereof process for granting licenses to new mobile, Long Distance & International (LDI) and Local Loop operators is on the anvil. The objective is to provide affordable telecommunication services with a view to enhancing the teledensity in Pakistan which is the measure of narrowing of digital divide. The public sector universities have been inter linked via an educational intranet. They have as well been assisted to set up their in house ISP operations for the benefit of their student and academic community. An E-government initiative has been launched to help Federal and Provisional government departments and agencies to transact their business using internet/intranet. This provides easy access to public to access information and services rendered by the government. 19

Legal frame work is being put in place to create enabling environment for E-business in consultation with all the stake holders. Promotion of IT education in Pakistan, both in terms of delivery standardization is being vigorously perused establishment of Virtual University has been done to overcome the shortage of teaching recourses &delivery channels. Pakistan Telecommunication company limited (PTCL) has been on the fore front of the government‘s effort to promote the ICT in the country begin the incumbent provider of fixed telephony services PTCL has been growing its network and services at annual rate of 6 – 7 %. PTCL provides universal internet access from all of its 2760 exchanges. This means delivering of internet call nearest ISP. POP on a unit local call charges irrespective of distance and duration of the call. This has made it possible for the customers all over Pakistan to benefit from internet. This created enabling conditions for delivery of educational, medical & agriculture advisory and marketing services through out the length and breadth of Pakistan. Punjab Sindh NWFP Balochistan Total

1091 202 409 110 1812

PTCL plans to provide 3 million phone during next financial year using wireless and wire line facilities. This will give the desired fillip to the teledensity in rural and urban areas. WLL is also aimed to revolutionize the coverage of rural areas. PTCL has been regularly restructuring its tariff for fixed telephony and bandwidth to make its services affordable to end users. Downward revision of line rent, international and national long distance rates are instances of the initiatives PTCL implemented over the years. Delivery of education and health care services could be paradigmatically improved by an ingenious employment of ICT. Agriculture, animal husbandry, agro based and handicraft cottage industries in the rural areas can benefit substantially through delivery of advisory training and marketing services. The concerned agencies and organizations can utilize this unprecedented opportunity to bring about an economic revolution and push back the frontier of poverty.

15-20 Million May Have Cell Phones in Two to five Years 20

Cellular phone customer base is expected to increase to 15-20 million in the next two to five years from the current 4millions subscribers. In view of country‘s population of over 140 million, the 4 million subscribers‘ base looks very tiny in terms of rising demand as only 3 percent have mobile phones. However, mobile phone operators now forecast a jump of 10-15 percent in customer base from 3 percent in the next two to five years in view of their on-going and future expansion plans and stiffening competition with the arrival of two new mobile phone operators. The current mobile phone operators in Pakistan include Pakistan Mobile Communication Ltd (Mobilink), Paktel, Instaphone, and Pakistan Telecom Mobile (U-fone). Besides U-fone, which is a 100% owned independent subsidiary of Pakistan Telecommunications Corporation Ltd (PTCL), the other operators have foreign investors. These four companies currently provide mobile phone services in Pakistan, where the government says that there is an urgent need to develop a more efficient telecommunication infrastructure to meet future demand. Director marketing, Mobilink, Bilal Munir Sheikh told from Islamabad that the company, since its inception in 1994, has invested heavily in its infrastructure to provide cellular communication service backed by best available technology. It introduced the first GSM-based cellular service in Pakistan. The plans for additional investment of $275 million are on going as expansion of infrastructure is a continuous process. Mobilink‘s total investment by the end of the current calendar year will touch $775 million. One forecast of entire mobile phone customer base, he said ―the cellular market size is estimated to be between 15-20 million within 3 to 5 years‖. We aim to maintain our position as the market leader by continuously upgrading and expanding infrastructure to provide the best level of service to our growing sub scribers base,‖ he said. Mobilink, having over 2.8 million subscribers, is heading to surpass the PTCL subscribers base by the end of the current year. The current PTCL subscriber base is 4.37 million. To a query over plan to extended network in rural areas where Pakistan‘s 70% population lives, he said the company has been working continuously to expand cellular services in the less developed cities of Pakistan so that the majority of population can reap the benefit of cellular technology. He said that the company is continuously adding new towns and cities to its service network and currently had reach over 290 cities in Pakistan. By the end of the current calendar year its service would have reached 350 towns 21

and cities. These cities are located all over Pakistan and very close to accessible from rural areas as well. Moreover, the company is already providing coverage on the major high ways including Motorway, GT Road and Indus Highway. Bilal said that the government has been very supportive of the cellular industry and has come up with a new cellular policy that would help in its growth. For the budget 2004-2005 the industry had proposed to the government that activation charges for mobile phone connections should be lowered. The proposal was accepted and activation charges were dropped from Rs. 2,000 to Rs. 1,000. Chief Executive Officer, Pakcom Limited (Instaphone), Lain Williams thinks that currently there are about 4.5 million mobile users now. ―There should be 12-15 million within two-three years,‖ he adds. ―The company has over 550,000 subscribers and we now target to grow by one million subscribers per year,‖ he told Dawn from Islamabad. On future investment plans, Iain says that the company is still growing its current time division multiple access (TDMA-network) - already covering more than 185 cities. Further a major strategic investment going forward will be in a new CDMA network (code division multiple access), an American Digital Standard, that the company intends to install by the year-end. The company has so far invested over 100 million in mobile phone sectors of Pakistan and plans to invest with similar volume annually,‖ he says. Instaphone chief says that the company is not threatened by two future mobile operators. ―We welcome this competition this would only help grow the market. There would be rooms for all operators to grow,‖ he says. On future plans to extend your network in rural areas, he says the company with now over 185 cities has a strong position in coverage. To a query why his company has not emerged as a tough competitor for three other mobile phone companies, Iain Williams says Insta has been an effective operator and the company is in fact still the second largest operator based on its prepaid products –Instaphone and InstaXcite. The key weakness for Insta, he says, has been that TDMA handsets have not been as varied and popular as GSM (global system mobile). Deposit the actual service being as good as and frequently better than GSM service. CDMA handset prices and range are better and Insta will become even more competitive, he adds. CDMA technology is the newest state of the art cellular technology and is now being developed in North America, China and India. This technology is superior to what is available with cellular networks in Pakistan today. He 22

claims his company as a unique amongst operators which offers 12 months incoming free on its prepaid products besides the company has waived off roaming charges within all regions expect north to south. Additionally Insta‘s Xcite product gives the lowest outgoing airtime rates in the market. Another player, Paktel has over 500,000 customers. A source said that the company has invested over $200 million and plans further investment of $150 million. Paktel is soon to overlay its existing systems with GSM with an installed capacity of two million users, a source in Paktel said. A number of senior executives of Ufone have been approached and surprisingly ever executive ask this scribe to talk to other person or said that today is holiday. However, one of the Ufone executive claimed that the company, having a current customer base of 1,850,000, has so far invested $300-350 million in cell phone segment. The company is targeting another 2-2.5 million people to have mobile phones in the next couple of months. Meanwhile another Ufone executive did not agree with this estimate. He claimed that Ufone subscriber base is close to one million and the company plans another three to four million subscribers by the next year. He said the company has so far invested $ 150 million. Pakistan‘s population is 145 million people. One third of the population live sin poverty, earning less than two dollars a day, according to United Nation figures. Pakistan now has a fixed-line telephone penetration of 2.7 telephone lines per 100 people. A Pakistan Telecommunication Authority (PTA) report published in March predicted that one million mobile phone subscribers could be picked up within six months. After Deregulation, land line telephone penetration is expected to rise to 5.6 percent or 9.0 million lines by the year 2010. Mobile phone penetration is projected to reach the same level earlier. Mobile phones are going to surpass over 4 million land-based telephones as the mobile phone subscribers number is expected to rise from 4 million to 7 million in 2005, according to PTA estimates. However, private sectors estimates are that this would happen much earlier, most probably within the next 12 months.

Growth Of Telecom Sector in 2004 Landscape of telecommunications is changing fast with the advent of stateof-the-art technologies and rising nations are doing hard to keep themselves abreast of emerging trends in the field of telecommunication. Convergence of technologies has, at a rapid pace, revolutionized every field of human life and so is the case with telecommunications. Pakistan is in no way an exemption to 23

this developing shift. The sector has witnessed enormous advancement with the grant of two licenses to new cellular companies and several other licenses for fixed line services, thus fetching huge foreign and local investment and bringing momentous changes in socio-economic scenario of the country. Telecom regulator, Pakistan Telecommunication Authority (PTA), through its consistent and well calculated policies has bought about phenomenal progress in this sector and has transformed the country into investors' paradise. As latest figures show, Foreign Direct Investment (FDI) in telecom sector reached US $ 207.1 million in 2004 which was just US $ 6.1 million in 2002. Besides, US $ 5 to 8 billion FDI is expected in the next 3 to 5 years. The influx of this heavy investment was occasioned because of the fact that PTA had issued various telecom licenses during the year 2004 to foreign and local telecom investors by winning over their trust and confidence and creating a healthy competition among telecom operators, as mandated by the Government of Pakistan in the Telecommunication Deregulation Policy 2003. Cellular companies already operating in the country have significantly reduced their tariffs in view of competitive environment in the offing. Those operators also expanded their infrastructure to compete with the newly inducted parties. The government also reduced activation charges from Rs.2000 to Rs.1000 to facilitate the intending customers and boosting growth of cell phone connections. The companies had withdrawn roaming charges throughout the country. Owing to these measures, an Increase of 173 percent was manifest in mobile sector and total number of cell phone users reached to 7.9 million by the end of 2004. Existing mobile companies had provided more than 5.5 million new connections during the year. The mobile teledensity has crossed 5.14 percent in Pakistan and according to conservative estimates number of mobile phone users would touch the figure of 15 million by December 2005. Lately, PTA had renewed license of pioneer cellular company of Pakistan, Paktel for next 15 years against $ 291 million and allowed it to launch its GSM operation. With the operation of existing and new companies, the customers would get varied choices and enhanced quality of service at cheaper rates. Numerous new licenses were also issued to national and multinational companies providing fixed line telecommunication services to end PTCL monopoly in basic telephony during the year 2004. PTA awarded 12 Long Distance & International (LDI) licenses, 76 Fixed Local Loop (FLL) licenses to 34 operators and 90 Wireless Local Loop (WLL) licenses to 15 companies. The process fetched as much as 14 billion plus through auction of spectrum for WLL, and the initial processing fee for award of these licenses. Fixed line telephone tariffs were reduced substantially to give relief to consumers. Charges for new connection in rural and urban areas were decreased by 73% and 44% respectively. Similarly, NWD call charges were reduced by 25% and 1SD charges by 24%. Currently, Pakistan has 3.13% teledensity in fixed telephony which was just 2.2 percent in year 2000. With 24

the issuance of fixed line licenses to the new operators, it is hoped that there will be 12 million more customers during the next five years and teledensity will become at par with other Asian countries. In order to introduce genuine competition, encourage upcoming cellular and fixed line operators to smoothly enter the market and thwart unscrupulous practices in telecom business, PTA granted three companies the status of Significant Market Power (SMP). The companies included PTCL, Special Communication Organization (SCO) and Pakistan Mobile Communication Ltd (Mobilink). Another milestone on the part of PTA was the reduction of 45 percent interconnection charges by PTCL to facilitate new operators. This decision was widely welcomed by telecom companies. PTA prioritizes as its first and utmost responsibility to provide quality telecom services to the customers. A Complaint Cell is established at PTA Head Quarters to address the grievances of telecom consumers. The cell takes appropriate action on complaints about telecom services. Complaints are immediately forwarded to the concerned operators for their quick resolution. Consumers can send their complaints to PTA by post, through e-mail, fax or toll free number 0800-55055. As many as 5659 complaints were entertained during the year 2003-2004. If one looks on the rapid growth of telecom sector, it is evident that PTA did a lot in expanding telecom systems and services and providing ample relief to the consumers during the last year. The Authority always gave top priority to the consumers in the decision making and regulation formulation process. PTA arranged public forums on various issues concerning operators and consumers to gather their views and opinion on various policies. Consumer-friendly policies were formulated on the basis of conclusions arrived at those forums. Periodical surveys were conducted throughout the country to examine the quality of service of various telecom operators. Necessary remedial steps were also taken if service was not found up to the mark.

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About Mobilink Mobilink GSM (PMCL), a subsidiary of Orascom Telecom, which operates 20 GSM network licenses in the Middle East, Asia and Africa, is the market leader in providing state-of-the-art communications solutions to 4.3 million people in Pakistan. We can proudly boast of being the first cellular service provider in Pakistan to operate on a 100% digital GSM technology. We offer tariff plans that are exclusively designed to cater to the communication needs of a diverse group of people, taking into account occasional users to businessmen. To achieve this objective, we offer both postpaid and the prepaid (JAZZ) solutions to our customers. In addition to providing advanced voice communication services, we also offer a number of value added services to our valued subscribers. Keeping in mind our customers' convenience, we have also bundled mobile handsets, sold either independently or bundled in Get Set Go Pack.

Mobilink GSM started operations in the year 1994; from then on it has shown enormous growth. At the time when it entered the market it was a small player in the cellular market of Pakistan it is now the market leader both in terms of growth as well as having the largest subscriber base in Pakistan

Vision 26

“To be the leading telecommunication service provider in Pakistan by offering innovative communication solution for our customers while exceeding share holder value and employee expectation.”

Values 1. Trust and Integrity:At Mobilink we strive to cultivate an open haviest environment. By doing what we say, and saying what we do, we trust those around us, and give them every reason to trust us. 2.

Passion for business excellence:-

The outstanding performance of our employees is contingent upon their will to do their best. This passion for business excellence eventually translates into success for the Mobilink family. 3.

Respect for People:-

Our attitude towards others speaks volumes for our personality- both as individual as well as a company. At Mobilink, we encourage our employees to after likeable attributes for others to regard, since respect for others eventually helps are gain respect for oneself. 4.

Commitment to Total Customer Satisfaction:-

At Mobilink, we realize that customer satisfaction from the core of success. Therefore we focus our energies on giving all customers more than they expect. 5.

Responsible corporate citizen:-

At Mobilink, we continue to set benchmarks in terms of social responsibility and community conscience. It is our duty to be accountable towards the environment that we operate in.

Welcome to the New Mobilink As we stand at the threshold of a new era of Communication in Pakistan, Mobilink GSM is proud to share its renewed values and its new identity. Mobilink GSM – Reshaping Communication As Mobilink continues to grow, it is no longer just a cellular company but the preferred choice of customers for their communication needs. Their new logo the Mobilink World encompasses people‘s hopes, their wishes and their dreams. Through their untiring efforts they commit to bringing these to reality through their state-of-the-art systems. They bring people together. 27

Achievements ISO 9002 Quality Management System Certification for Billing, Engineering Departments and CS Contact Centre Implementation of a full Intelligent Network (IN) platform from Siemens for the Prepaid platform. Biggest Call Centre in Pakistan, which is there to assist the customers 24 hours. Only cellular service in Pakistan to provide coverage on the M2 motorway. Bilateral roaming agreements signed with 61 countries around the world to have true roaming service operational in 151 operators of the world. MOBILINK GSM's Short Message Service Centre allows Vehicle Tracking and Fleet Management services that are being provided by Tracker (Pvt.) Ltd., under the brand name of C-Track, a company licensed by Pakistan Telecom Authority (PTA). Tracker currently operates from Karachi but can provide these facilities at all those locations where GSM coverage is available. Mobilink has been nominated for the category of Best Mobile Operator of the Year, Regional – India and Subcontinent Award at the Asian Mobile News Awards 2004. Mobilink is the only Pakistani operator nominated in this category, up against 4 companies from India and 1 from Bangladesh

Human Resources At Mobilink, their belief is that "Our people are our greatest asset. We take great pride in acknowledging the contribution each one of us makes.‖ We focus on People Development and for that we ensure: Staff Mobilink with world class Professionals and ensure that the right systems are in place to encourage them to develop to their full potential. Create a collaborative and mutually supportive work environment that encourages people to grow. 28

Build a team of professionals who deliver expertise by participating in business decisions. Develop Performance Management and reward systems underlying our Business strategy.

History of Paktel Let us not mince words, this time graph will tell you all.

Paktel is the company that launched cellular technology and introduced mobile telephony in Pakistan. Since then both our customers and Paktel have come a long way in terms of the way Pakistanis communicate. From the basic one-to-one voice communication, customers can now enjoy short messaging (SMS), picture messages, polyphonic ring-tones, conference calling, call forwarding and a host of other fabulous services.

Welcome to Paktel GSM Welcome to the second generation of mobile communication. Welcome to the next domain. Welcome to the most affordable GSM connection available in Pakistan. Welcome to Paktel GSM. Paktel GSM has been launched with a subscriber capacity of over 2 million and the total coverage will be enhanced to 65 cities and towns across Pakistan at this moment stats that are unheard of in the GSM sector. Paktel GSM has ensured the most aggressive roll-out ever. We could have launched in one city or two months back. But the philosophy of convenience, connectivity, coverage and clarity forced us to wait and come out with a BIG BANG.

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Countdown to GSM Say hello to a new beginning with Paktel‘s countdown to GSM. Powered by our commitment to setting new service standards, the GSM network coverage will extend to at least 150 cities and towns of Pakistan in 2005. With a subscriber capacity of at least 2 million and plans for the first GSM test call in March, Paktel is all set to shake up the industry. So brace yourself for the year 2005, the year of Paktel that will turn all else to history

Why Paktel? Mobile communication is now a utility. You need your mobile phone. Paktel GSM fulfills the needs of mobile users. But what does a consumer look for in his mobile connection? This is the question that the Paktel team asked itself, when we were planning for Paktel GSM launch. Paktel, having a long tradition of reliability gives you: 30

  

Coverage - at an affordable price Convenience - at an affordable price Connectivity - at an affordable price

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What is AMPS In 1983, the analog cell-phone standard called AMPS (Advanced Mobile Phone System) was approved by the FCC and first used in Chicago. AMPS use a range of frequencies between 824 megahertz (MHz) and 894 MHz for analog cell phones. In order to encourage competition and keep prices low, the U. S. government required the presence of two carriers in every market, known as A and B carriers. One of the carriers was normally the local-exchange carrier (LEC), a fancy way of saying the local phone company. Carriers A and B is each assigned 832 frequencies: 790 for voice and 42 for data. A pair of frequencies (one for transmit and one for receive) is used to create one channel. The frequencies used in analog voice channels are typically 30 kHz wide -- 30 kHz was chosen as the standard size because it gives you voice quality comparable to a wired telephone. The transmit and receive frequencies of each voice channel are separated by 45 MHz to keep them from interfering with each other. Each carrier has 395 voice channels, as well as 21 data channels to use for housekeeping activities like registration and paging.

What is GSM Global System for Mobile Communications. GSM is the name of a land mobile pan-European digital cellular radio communications system. GSM is the pan-European standard for digital cellular telephone service. GSM networks will be built as an alternative to current AMPS system and in the future and will support enhanced data applications. GSM was designed for European markets to provide the advantage of automatic, international roaming in multiple countries. The SIM (Subscriber Identification Module) card is a vital component in GSM operation. The user can store all relevant data for the phone on a removable plastic card. The card can be plugged into any GSM compatible phone and the phone is instantly personalized to the user It is also used around the world. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. Operating in the 900MHz and 1.8GHz bands in Europe and the 1.9GHz PCS band in the U.S., GSM 32

defines the entire cellular system, not just the air interface (TDMA, CDMA, etc.). As of 2000, there were more than 250 million GSM users, which is more than half of the world's mobile phone population.

Coverage of Paktel At this time the coverage of Paktel Amps is about 170 cities. The Paktel GSM covers about 67 cities. But Paktel aims to increase its service to about 150 cities by the end of this year

Coverage of Mobilink At this time the pioneer of GSM in Pakistan covers about 300 cities all over the Pakistan

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Comparison So Mobilink has the competitive edge in this regard as its coverage is in more cities compared to Paktel GSM its service is in 233 more cities.

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Pakistan mobile Communications Limited Shareholders include Orascom Telecom 89% and Saif Group 11%. Operators under the name of Mobilink. GSM 900/1800 platform. Commenced operations in August 1994; License renewal in July 2007

Total subscribers 4,200,000

Others 40%

Mobilink 60%

Source: PTA (subscribers as of December 2004)

Paktel Ltd Paktel is 98% is owned by Millicom Inte’l Cellular (―MIC‖) Paktel recently converted from D-AMPS technology to GSM 1800 Network. Operates under the brand name of Paktel GSM. Commenced operations in October 1990; License renewed in October 2004 for 15 years.

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Total Subscribers 488,343 Paktel 7%

Others 93%

Pak telecom Mobile PTML is wholly owned subsidiary of PTCL. Operates under Brand name of, ‘Ufone’. GSM 900/1800 platform.

Commenced operations in January 2001; License renewal = April 2005

Total subscribers 1,750,000

Ufone 25%

Others 75% Source: PTA (subscribers as of December 2004)

Pakcom Ltd. Instaphone Sanbao Telecom an MIC subsidiary owns 62.5% of Pakcom. Pakcom operates under the brand name of “Instaphone”. Operates under the D- Amps technology. Commenced operations in October 1990; License renewal = April 2005 36

Total subscribers 544,778 Instaphon e, 8%

Others, 92%

Telenor Largest provider of telecommunication services in Norway. Developed its position as a mobile operator with substantial operations in 12 countries. Telenor has 34.8 million mobile subscriptions through the companies wherein it has ownership interests. Expected to begin operations in 1Q2005.

Warid Telecom Owned by the Abu Dhabi Group which is led by His Highness Sheikh Nahayan Mabarak al-Nahayan Expected to operate in the 1Q2005

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Marketing Mix It is the set of controllable tactical marketing tools-product price play and promotion –that firm blends to produce the response in the target market

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Target Market A set of buyers sharing common needs or characteristics that the company decides to serve.

Target Market of Jazz The target market of jazz is the youngsters of 16-25.

Target Market of Indigo The target market of Indigo is the people are the professional and businessman. Another target market of Mobilink Indigo is the cooperate sector

Target Market of Call & Control Call & Control is aimed at customers who currently fall between prepaid and postpaid. These are customers who want the prestige and benefits of postpaid with the control and convenience of prepaid. They could include parents buying connections for their children, companies buying connections for their sales force with the control of prepaid cards and so on.

Target Market of Paktel GSM Prepaid The target market of Paktel GSM is individuals regardless of their age. It suits to any age group and it fulfils the desires of all the people.

Target Market of Paktel GSM Post-paid The target market of Paktel GSM is businessmen and professionals.

Target Market of Tango The target Market of Tango is youngsters between the age of 16-25 who find convenience and can‘t afford to pay much money but feel the need of mobile phone.

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Market Segmentation Market segmentation is dividing a market into distinct groups of buyers who have distinct needs, characteristics, or behaviour and who might require separate products and or marketing mixes; dividing a market into distinct groups with distinct needs, characteristics, or behaviour who might require separate products and or marketing mixes.

Segmentation on the basis of Income As in the case of mobile phone users we divide them according to the income level. The age, gender and other factors account much less then income. As income level increase their tendency to buy post-paid connection is much high. Most of the people who have income above 40,000 and using mobile frequently using post-paid. The youngsters and persons with low income mostly buy prepaid as it suits to them. The ratio of prepaid and post-paid of Mobilink is 90% and 10% respectively. Similarly, the ratio of prepaid and post-paid of Paktel is 92 and 8% respectively people who are using call and control is 0.25%. The ratio of Tango in postpaid connections is about 4 to 5 % only. By the year the

Segmentation on the basis of Age The students, youngsters and people with low income prefer to buy prepaid. First they afford them and secondly according to a survey they feel pride to tell their fellow members that they have Jazz connection. Many people especially youngsters who have two Sims and one of them is of Mobilink they tell others that they have Jazz connection and mostly don‘t tell about other. This is the reason that students have 30% of the total Jazz connections. But it is not true in every case .You can easily found people who are above 50 or 60 and using Jazz or Tango. The major segmentation is still upon income and need.

Segmentation on the basis of Profession According to survey the people who are on high posts and businessmen whose calling rate is about 30 to 70 calls per day use prepaid and different packages according to their needs. It is also seen that almost all cooperate sector is grabbed by the Mobilink.

Behavioural Segmentation Behavioural Segmentation is dividing the market into groups based on consumer knowledge, attitude, use, or response to a product. As people behaviours is based on their perceptions so Mobilink is taking advantage of this as people‘s view and perception about Mobilink is much better then the 40

Paktel. People think and their past experience shows that the customer services of Mobilink is much better and its coverage is more and the people having Jazz and Indigo have better experience then that of Paktel. There was a time when Paktel was having all these qualities. Now it is working on changing the attitude and behaviour of the people as the people who use Paktel GSM complaining a lot about its services so we can also segment the market on the basis of behaviours as people behaviour also influences their buying. Some people are inclined towards Jazz, Some towards Paktel it is all because of their knowledge, attitude, use or response towards a product

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What is Price? Price is the amount of money charged for a product or service or the value exchanged for the benefits of the product or service.

Pricing Strategies There are five general pricing strategies which these companies adopt

Product line Setting the price steps between various products in a product line items based on cost difference between the products, customer evaluations of different features, and competitor‘s price as in the case of post-paid many packages are offered and on different prices as Mobilink & Paktel post-paid packages are about 5 and all of them have different prices according to their packages.

Captive Product Pricing products that must be used with the main product as card is used with the connection with mobile Phone

Product Bundle Pricing bundles of products sold together. As connection plus card and mobile phone altogether offers at low price.

Market Penetration Set a low initial price in order to penetrate the market quickly and deeply to win a large market share. This method adopted by the Paktel GSM after conversion from AMPS in order to get maximum share Works when: Market is highly price sensitive. Production and distribution costs fall as sales volume increases. Low price must help keep out the competition.

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Price Adjustment The following are price adjustments based on changing situations:

Discounts Discount is straight reduction in price on purchases during a stated period of time. As Paktel‘s and Mobilink bundle offers are included in discount

Psychological Adjusting prices for psychological effects. Ex: Rs. 3999 vs. Rs. 4000 as set by Paktel.

Value Pricing It is the method of adjusting prices to offer the right combination of quality and service at a fair price. As Mobilink claims that they are offering better service and product and their price according to the services and products is quite fair

Promotional It is temporarily reducing prices to increase short-run sales. 1st Paktel introduce the prices which were valid for only 31st December 2004. Now this offer is extended.

Competition-based pricing It is the process of setting prices based on the prices that competitors charge for similar products. As Paktel set its price by seeing and keeping in view the prices offered by competitor.

Mobilink’s Packages Prepaid Packages Jazz Jazz is an amazing prepaid service that allows you freedom from monthly bills and gives you complete control over your cellular expenditures. You decide in advance when and how you want to spend. Jazz is simple easy and lots of fun. Jazz is extremely affordable, with features like: No daily charges Low outgoing rates 43

180 days validity of Jazz Scratch Cards

Jazz-Aur Sunao Effective December 1st, 2004, Jazz tariffs were reduced from Rs. 5.75 per minute to Rs. 4.75 per minute on all calls from Jazz to any other Mobilink numbers. This tariff reduction served as an unparalleled advantage to our 4.5 million strong Jazz subscribers, who have to pay less to call within the Mobilink family, 24 hours a day.

Tariff guide for Jazz package Incoming Calls Outgoing Calls to Mobilink Number (24 Hrs.) Outgoing Calls to other Number (24 Hrs.) SMS(per message) On Call Services

FREE Rs.4.75/min Rs.5.75/min Rs.2.00 FREE

For Jazz: Mobilink to other cellular network charges

Distance Bands(Km) 25-80 80-160

Peak(7.00a.m.- Off9.30p.m.) Peak(9.30p.m.11.00p.m.) Rs.2.00 Rs.1.00 Rs.5.00 Rs.4.00

Late Night(11.00p.m.7.00a.m.) Rs.1.00 Rs.2.00 44

160+

Rs.9.00

Rs.6.00

Rs.4.00

Call and Control Call & Control is aimed at customers who currently fall between prepaid and postpaid. These are customers who want the prestige and benefits of postpaid with the control and convenience of prepaid. They could include parents buying connections for their children, companies buying connections for their sales force with the control of prepaid cards and so on. The media campaign for the product will also emphasize these control and convenience features. Call & Control is aimed at customers who currently fall between prepaid and postpaid. It is meant for customers who want the prestige and benefits of postpaid with the control and convenience of prepaid. They could include parents buying connections for their children, companies buying connections for their sales force with the control of prepaid cards and so on.

Tariffs for the package are: Line Rent Free Minutes Peak Off Peak Late Night SMS Rate Rs. 222 (+ Rs. 25 for SMS) 0 4.0 4.0 4.0 1.5 (Taxes Apply as Usual)

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Postpaid LD charges apply as follows: Distance Band (KM) 25-80 80-160 160600 600+

Peak Off-Peak Late-Night 0700-2130 2130-2300 2300-0700 2.0 1.0 1.0 5.0 2.5 2.0 5.0

2.5

2.5

8.0

4.0

4.0

―Call & Control‖ is one more service from Mobilink aimed at providing our customers a menu of tailored packages that

Postpaid other service charges Postpaid Change of Number Existing Fees (Rs) Approved Fee (Rs) Postpaid Change of Number 750 300 Postpaid SIM Replacement 700 300 SIM replacement / 350 300 Memory enhancement

Supplmentry Connection Supplementary connection from indigo. Same connection same Bill Two numbers. Imagine having all the post paid benefits your current indigo connection-all over again? A supplementary connection is all this and more. And because it will be billed on your existing monthly statement, there‘s less paperwork and more control on top of having a great new number. 1. New supplementary package "Family" is introduced. 2. All calls between the supplementary and primary numbers will be charged at 50% of the airtime of the respective package. 3. Only one bill (addressed to the user of primary connection) will be generated for both numbers.

Tariff details are given below Family

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Monthly charges Free OG minutes OG rate (Peak: 07002130) / minute OG rate (Off Peak: 21300700)/ minute Rate/min to discounted # (peak) Rate/min to discounted # (off peak) SMS

300 0 3.5 3.0 1.75 1.50 1.50

Postpaid Packages Indigo

Life whispers. Life Laughs. Life talks. However you connect with life's moments, a Mobilink Indigo connection is by your side. With countless, value added ways to keep you connected. Mobilink Indigo is the new complexion of communication. After all, only family really knows your true colours.

Tariff guide for Indigo Package GSM Blue. Gone are the days of expensive mobile calls. Peak Airtime is Rs.3.75 ONLY!!!! Off-Peak Night time Airtime Rates of Rs.0.99 knock out competition and surely give sleepless nights to people not using Paktel GSM.

Special launch Package-Prepaid Package

Daily Service Charges

Paktel Blue

Zero

Peak Out Going Air Time Rs.3.75

Late Night Air Time Rs.0.99

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Post-paid Packages Paktel GSM Post-Paid presents to YOU the best Cellular deal in town-Smart Packages. Paktel GSM Smart packages give you the best mix of Line Rent, Airtime Rates, Free Minutes and Free SMS. Compare Paktel GSM Smart Packages with those of competition &you will know why Paktel GSM Post-Package is a SMART choice. What else, Paktel presents Night Time rates in your Talking Nights packagerates as low as Rs.0.25 per minute. Tariff(indigo air time charges) Line Rent Free Minutes Outgoing Calls Peak(7.00a.m9.30p.m.) Outgoing Calls offPeak(9.30p.m.7.00a.m.)

Indigo Basic

Indigo 50

Indigo 100

Indigo 200

Indigo 400

300 3.50

600 50 2.90

850 100 2.60

1,300 200 1.90

1,850 400 1.00

3.00

2.20

1.80

1.50

1.00

SMS(per message) On call services

1.50 Free

1.50 Free

1.50 Free

1.50 Free

1.00 Free

Additional Information Other Network* Access Charges Other network nationwide access charges International (ISD) access charges

Rs.2.00/minute Rs.3.00/minute

Incoming Roaming Charges No incoming roaming charges within your country .

Important Information Voice Mail charges are Rs.1.00 per 15 seconds for retrieval of messages. Relevant charges on forwarded calls are applicable. Additional surcharge of Rs 48

.3.00 per message will be charged outgoing international SMS. All PTCL and other cellular operator charges apply .All taxes and duties apply.

Mobilink to PTCL NWD For nationwide calls to PTCL numbers, PTCL charges are applied in addition to airtime and NWD access charges, i.e. Airtime + PTCL charges + Rs.2 per minute NWD access charges.

Mobilink to other Operators NWD For NWD calls to other operators, customers will be charged Rs.2 per minute CPP in addition to Airtime, MLD and NWD access charges.

Paktel’s Packages Prepaid Packages Paktel GSM Pre-Paid offers a revolutionary package-Paktel   

S 200 is for conservative users who make 0-4 calls everyday. S 500 is for High End Users who make 5-15 calls everyday. S 1000 is for Premium Users for whom Paktel GSM mobile is their second office.

Smart Packages on Paktel GSM-Postpaid Line Rent Airtime Rate Free Minutes Free SMS Talking Night Fees Talking Night Airtime

200

500

1000

1500

3000

3.5

2.5

1.5

1

0.75

0

60

150

500

2000

30

60

150

0

0

200

200

200

2000

200

0.5

0.25

0.25

0.25

0.25

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Comparison This should be music to customers' ears that can in the future, look forward to a new round of price and technology improvements. PakCom's CEO, Ian Williams, projects that mobile usage has the potential for hitting the 10 million benchmark. In the race to increase market share, investment in value added services and technology has gone hand in hand with competitive pricing strategies. The three international companies, Mobilink, Instaphone and Paktel, and Pakistani-owned Ufone, keen to outdo each other, offer customers a range of segment-oriented cellular packages, pre-paid for the price-conscious and post-paid, for a relatively higher-income niche. This strategy has enjoyed considerable success with Mobilink's Jazz package, enjoying approximately 4,500,000 subscribers. Scratch cards of all companies are available in all denominations, ranging from 250 to 2000 rupees and are valid for one to six months. Starter-pack prices have also tumbled, with Mobilink at 4,500 rupees, inclusive of all taxes along with free airtime worth 300 rupees and Nokia 3310. Paktel too has followed suit, increasing the validity times of its pre-paid Tango service cards and introducing lower connection charges of 1000 rupees on its postpaid value tariffs. Also starter-pack in just 3,999 Apart from the price war, companies are going in for a variety of marketing gimmicks Not to be outdone, Paktel launched its family package, offering a supplementary connection at half price and a discount of 50 per cent on calls between the parent and supplementary line. Instaphone's Long Distant and Access, open to also all Advanced Mobile Phone Service (AMPS) based phones through a pre-paid card, allows for international calls with no security deposit. Far and away, the winner in the race to capture the lion's share of the mobile network market, is Mobilink, with a notably higher volume of subscriptions and a carefully targeted value-added service, followed closely by U-Fone, and then by Paktel and then Instaphone. Given the fact that inter-network calls are much cheaper than network to network calls, the largest companies attract more customers, eager to reduce their bills. "Mobilink is the market leader in the cellular industry," proclaims Haider. "We have the biggest network with about more then 5,000,000 subscribers, and cover 330 cities with our 320 cell sites." Kamran Farooq, sales representative of United Mobile, corroborates this claim. Mobilink package sales, he says, are the most popular product, especially the Jazz package. "Prepaid packages are very popular, because they are reasonable and very convenient to use. Mobilink benefits from excellent coverage, with the widest network of easily accessible GSM centers, and Connect Point of Sales Express Shops. Customer service too is friendly, with an automated phone mechanism that directs customers to particular departments, providing a choice of Urdu- or English-speaking operators. Six phone lines dedicated to customer service, complement an internal mobile number, compared to Paktel, Instaphone and Ufone customers 50

who have to rely on one, apart from an internal number which is often busy. Ufone, keen to improve customer service, has recently introduced a new location-based inquiry service designed to provide its customers with details of the nearest pre-paid card outlet. Innovation and technological maturity too are very important factors. People want convenience, to be able to use their phones wherever they are, with as little hassle as possible. As such whichever service provides the best line clarity and coverage, and of course competes effectively in the price stakes will have an undisputed edge. Companies, however, remain optimistic, looking to increase sales to two million subscriptions by the end of the year. It seems as if, for basic cellular services, the sky is still the limit. Now the mobile companies use another tactic to attract the market that they don‘t tell the customer about the taxes. They just grab them by telling the airtime charges. When customer buy the mobile and load the card then he come to know that after loading first tax is deducted then on every call he has to pay more money then the airtime as he has to pay 2.01 PTCL charges for 5 minutes and then 15% tax. What is the purpose of this when he already pay the tax while after loading the card. It seems as if, for basic cellular services, the sky is still the limit. U-Fone has the most competitive airtime rates in the pre-paid market-Rs.3 against Rs.4.75 offered by the market leader; but Paktel GSM offers 3.75 to all the networks whereas the U-Fone offers this price of Rs 3 just U-Fone to U-Fone

Comparison of connection charges-Prepaid Operators Mobilink Paktel

Connection Charges 250

Comparison of Airtime charges Operators

Outgoing Calls to same network Mobilink 4.75/min Paktel 3.75/min *Exclusive of all Taxes

Outgoing Calls to other Network 5.75/min 3.75/min

Outgoing Calls to PTCL 3.75/min

Comparison of SMS charges Operators To same network Mobilink 2.00 Paktel 1.50 *Exclusive of all Taxes

To other networks 2.00 1.50

International Ringtones/Logos SMS 5.00 5.00 51

Comparison of Scratch cards available & their validity Operator Mobilink 300 Validity 1½ Month Paktel 300 Validity 1½ month

Scratch Cards 625 1000 1500 6 Months 6 Months 6 Months 600 6 Months

2000 6 Months

1500 6 Months

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What is Product? Product is, of course, the thing (or service) that you have to offer to the customers. There are a number of thing about the product you should evaluate.

Functionality, Features & Benefits In order to begin to understand the product from a customer‘s point of view, list the functionality, the features, and the benefits that product has. List functionality and features that could be added. Prioritize each for the target market or market segments to determine the development of the product going forward.

Mobilink’s Products Prepaid Jazz Jazz is an amazing prepaid service that allows you freedom from monthly bills and gives you complete control over your cellular expenditure. You decide in advance when and how much you want to spend. Load a scratch card whenever you want to and start talking. Jazz is simple, easy and loads of fun. Jazz is extremely affordable, with features like: No daily charges Low outgoing rates 180 days validity of Jazz Scratch Cards Simply reactivate your deactivated Jazz connection

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Effective December 1st, 2004, Jazz tariffs were being reduced from Rs. 5.75 per minute to Rs. 4.75 per minute on all calls from Jazz to any other Mobilink numbers. This tariff reduction served as an unparalleled advantage to our 4.5 million strong Jazz subscribers, who have to pay less to call within the Mobilink family, 24 hours a day!

Call and Control Call & Control is aimed at customers who currently fall between prepaid and postpaid. These are customers who want the prestige and benefits of postpaid with the control and convenience of prepaid. They could include parents buying connections for their children, companies buying connections for their sales force with the control of prepaid cards and so on. The media campaign for the product will also emphasize these control and convenience features.

Supplementary connection Supplementary connection from indigo. Same connection same Bill Two numbers. Imagine having all the post paid benefits your current indigo connection-all over again? A supplementary connection is all this and more. And because it will be billed on your existing monthly statement, there‘s less paperwork and more control on top of having a great new number.

Postpaid Indigo

Life whispers. Life Laughs. Life talks. However you connect with life's moments, a Mobilink Indigo connection is by your side. With countless, value added ways to keep you connected. Mobilink Indigo is the new complexion of communication. After all, only family really knows your true colours 54

Value Added services

MOBILINK GSM has always been the market leader when it comes to introducing state-of-the-art communication services and solutions for its customers. Our Value Added Services makes your existing package more attractive, all for your convenience. You can now benefit from the services, which will give you all the freedom you need, making mobile communications more exciting, convenient and enjoyable. This section will walk you through services, which are not only useful but also cost-effective for both your business as well as personal use. These include the very basic yet indispensable services like V- Mail to the more innovative and sophisticated ones like G-Mail, Internet Chat, Logo Composer etc. We are confident that our innovative and exciting new services will bring about a revolution in the way you look at mobile communications. Furthermore, by choosing any package plan (both post-paid and prepaid), you also qualify for a host of „On Call Services‟ that includes CLI, Call Waiting and Call Forwarding.

Urdu Power Tools

Mobilink says that: ―Continuing with our tradition of launching innovative yet consumer relevant services to add to our current portfolio, we are proud to announce the launch of Power Tools in Urdu. This service will enable our customers to avail the benefits of their favourite power tools, only this time in their own language i.e. Urdu. The Urdu Power Tools menu is the first step in introducing more services in our local language.‖

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Ring tones/ Logos

The service allows the caller to download ring tones, operator logos or get any picture message or screen savers. Ring tones are available for English, Urdu and Punjabi songs. Screen savers, picture messages and logos are available in all categories where the caller has the choice to choose the category.

Power Tools Mobilink GSM phone has been transformed into an information centre. It will now keep you updated with the latest headlines, weather updates, stock index, entertainment news, horoscopes, sports and more, anytime, anywhere in our coverage areas. Power Tools are by default activated, once you get the connection, and will bring to you all the information that you can think of, on your very own Mobilink GSM phone.

Caller Line Identification (CLI) You can see the telephone number of the caller before you answer the call. With most models of phones, your caller name will also be shown along with or instead of their number, if you have their number stored in your mobile. You then have the freedom to choose which calls you want to answer.

Call waiting/holding (CW) You never have to miss an important call again. If you are already on a call and someone else calls you, your phone will indicate through a beep and by displaying the number/name of the caller that another call is trying to reach you. You can then choose to place the current caller on hold and answer the new call.

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Call forwarding Call Forwarding allows you to divert incoming calls to your Voice Mail or another MOBILINK GSM number, when your mobile is busy, unreachable or you don't want to be disturbed. These basic but essential services are provided to all MOBILINK GSM customers free of charge, and are automatically activated with your connection (except for Call Forwarding on which nominal call charges apply as per package plan).

V-MAIL It is a voicemail service that allows callers to leave a message when you are unable to take a call. It‘s an intelligent messaging service; if your phone is switched off, in use or out of a coverage area, callers are diverted to your Mobilink V-mail where they are asked to leave a message. Mobilink V-mail is the economical solution. It saves more... Free activation No monthly line rent charges 50% reduced rates of Re. 1 per 15 seconds

Mobile Banking Mobilink also launched of Mobile Banking Services with Standard Chartered Bank, in an effort to further facilitate our valued customers. All Standard Chartered customers who are also Mobilink subscribers can avail this service. Customers would need to fill in a SMS M Banking Registration form available at Standard Chartered Branches or download it from the link below, and drop the forms at Standard Chartered Branches.

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Paktel’s Products Prepaid Packages Paktel GSM Pre-Paid offers a revolutionary package-Paktel GSM Blue. Gone are the days of expensive mobile calls. Peak Airtime is Rs.3.75 ONLY!!!! OffPeak Night time Airtime Rates of Rs.0.99 will knock out competition and surely give sleepless nights to people not using Paktel GSM.

Tango Tango is a prepaid package that was introduced when Paktel has not launched its GSM. But now as Paktel has launched its GSM other prepaid packages are introduced. Paktel tango was one of its famous packages before its GSM launch. It is so affordable that Paktel company used to advertise IS SAY SASTY SIRF KHAMOSHEE.

Paktel GSM GSM Postpaid Some luxuries in Life are Post-Paid With considerably low line rent, the best mix of airtime rates, free minutes, free SMS and value added services, Paktel GSM post-paid packages are a smart choice 25% More Savings Free Minutes 58

Free SMS Smart Packages Paktel GSM Post-Paid offers the following Smart Packages: Smart 200 Smart 500 Smart 1,000 All you need to do to get a Paktel GSM connection is bring your NIC copy, fill out a Customer Agreement Form and walk away with your Paktel GSM Post-Paid connection after paying necessary charges*. Charges include Security deposit, government activation tax and one month‘s security advance.

Smart Packages Paktel GSM Post-Paid presents to YOU the best Cellular deal in town-Smart Packages. Paktel GSM Smart packages give you the best mix of Line Rent, Airtime Rates, Free Minutes and Free SMS. Compare Paktel GSM Smart Packages with those of competition &you will know why Paktel GSM Post-Package is a SMART choice. What else, Paktel presents Night Time rates in your Talking Nights package-rates as low as Rs.0.25 per minute. S 200 is for conservative users who make 0-4 calls everyday. S 500 is for High End Users who make 5-15 calls everyday. S 1000 is for Premium Users for whom Paktel GSM mobile is their second office.

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Value Added services The list of Value Added Services is endless for you, our Post-paid subscribers. We can start with Free SMS, which are part of your monthly package. Not to forget free minutes that you get with Smart 500 and Smart 1,000 Paktel GSM Offer you Maximum Value Addition Caller Line Identification       

Call Waiting Call Forwarding Conference Calling Voice Mail International SMS PIN & PUK

Additional Value Added Services

Call Forwarding Call Forwarding allows you to divert your incoming calls to another Paktel number, when your mobile's off, unreachable or you don't want to be disturbed. For details please call 304 from your Paktel GSM mobile.

Caller Line Identification Caller Line Identification enables you to see the number of the caller on your mobile screen before you answer the call. This way you can identify the caller and choose to either attend or ignore the call. With most handsets, the name of the caller is also displayed if you have it stored on your handset. The power of communication is in your hands.

Call Waiting / Call Hold Now you never have to miss an important call. If you are already on a call and someone else calls you, your phone will indicate through a beep and CLI that another caller is trying to reach you. You can then choose to place the current caller on hold and answer the new call. If you choose not to attend the call it will automatically be diverted to your Voice Mailbox.

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Activate: * 43 # (One Time) Deactivate: # 43 #

How to Toggle between 2 Calls? Press 2 send/yes to alternate between two callers Press 1 send/yes to release the active party, or simply press end/no while talking to the party you wants to release.

Conference Calling

Your Paktel GSM mobile is your meeting room. With Conference Calling you can talk to two different people on two different numbers at the same time. It's just like having a meeting on phone, saving your precious time and money.

How to make a Conference Call? Place first call and wait for the answer, while the first call is on the line, dial second number and press send/yes Press 2 send/yes to alternate between two callers Press 3 send/yes to have a three party conversation 61

Press 1 send/yes to release the active party, or simply press end/no while talking to the party you wants to release.

Voice Mail

Paktel GSM offers you Voice Mail services. Whenever you are unable to attend a call, your caller can leave a message with Paktel GSM Voice Mail. So now you can relax because even if your phone is switched off, in use or out of a coverage area, callers are directly diverted to your Paktel Voice mail facility where they can leave a message. Voice Mail is your one stop solution: No activation charges No monthly charges Rs. 1.5 per message retrieval For details please call 304 from your Paktel GSM mobile.

PIN & PUK Paktel provides added security to our valuable subscribers. Whenever you switch on your mobile, feed in the PIN code 0000. If an incorrect code is punched you will be required to punch in a PUK code. You can request for the PUK code from our Call Center by dialing 111-222-111 or visiting your nearest Paktel Sales &Customer Services Center.

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You can change your PIN code (from your handset) whenever you want for added security. Paktel PIN & PUK Codes-another Value added feature – introduced by the pioneers of Cellular Industry in Pakistan.

International SMS Your Paktel GSM mobile connection is the most powerful communication tool in your hand. Want to stay in touch with your loved ones living abroad, want to wish your dad, brother working in the U.S, U.K, or Saudi Arabia…. You can do all that with Paktel GSM International SMS.

Additional Value Added Services

All calls are local calls for you - our Paktel GSM subscriber. You can call any Paktel GSM/TDMA number anywhere in Pakistan and be charged for a local call.

Feel free to travel anywhere in Pakistan and receive calls free of charge. No Roaming charges apply throughout Pakistan for Paktel GSM customers.

Talk whole night with your friends and loved ones at lowest rate.

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Comparison of Value Added services of Mobilink& Paktel Value Added Services Urdu Power Tools International SMS Logos/Ring tones Power Tools CLI Call Waiting Call Forwarding V-Mail Conference Calling SMS Colours Dedication Services Fun Messaging TV-SMS Mobile Banking Fax& Data Services Stock Watch G-Mail

Mobilink

Paktel YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES

. YES YES YES YES YES YES

Comparison Increased competition during the past three years provided the impetus to service providers to incorporate various fun elements to their service. A range of value-added services have been developed, serving as a popular marketing lure for customers susceptible to all that is trendy. A range of popular extras such as caller line identification, voice mail, conference call and call waiting facilities, compete with fun options such as a range of SMS, chat clubs, internet email notifications, and internet connections. For the executive class these options include fax and information services, instant news updates and business features such as mobile banking. Mobilink and U-Fone have invested heavily in these additions with Paktel and Instaphone lagging far behind. So what will the technology race and heavy duty investment offer Pakistani customers in the future? Prices of handsets and accessories have fallen precipitously as companies struggle to increase their market share. "The mobile phone is now more of a necessity and less of a luxury," says Saleem Mahmood, media strategist at The Passage. "It is an essential communication tool. As such customer's can look forward to more competition in pricing plans and increased customer service." Intense competition in the western world has led companies to offer throw away deals with free phones, discounted line rental, and a host of free mobile accessories. These trends may very well be mirrored in Pakistan once the market stabilises. With the proliferation of new technologies and new innovations, Pakistani companies will also be attracted by what they stand to gain by making their services more accessible. Muslim 64

Commercial Bank has already teamed up with Mobilink to offer a mobile banking service. Customers of Mobilink and MCB can now make inquiries about their account balance through their phones using the SMS messaging facility, and are able to receive mini-statements. This venture has also provided MCB with a unique advertising opportunity - they can now save on advertising costs by texting their customers with the latest in products and services. Mobile commerce might just change the way people work, giving companies a more customer-focused look.

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Promotion is the specific mix of advertising, personal selling, sales promotion, and public relations a company uses to pursue its advertising and marketing objectives.

Objectives The objectives that are met by promoting are to move the target market through the following phases: Unawareness -> Awareness -> Beliefs/Knowledge -> Attitude -> Purchase Intention -> Purchase It is believed that consumers cannot skip over a phase, but they need to move through them. Promotion is used to move the target market from one phase to another to finally purchase.

Basic Elements of the Promotional Mix Advertising Direct Marketing Interactive/ Interactive/ Internet Internet Marketing Marketing Sales Promotion Publicity/Public Publicity/Public Relations Relations Personal Selling

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Advertising – Any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor. There are three goals of advertising. These goals are to: Inform, Persuade, and Remind.

The traditional conceptual model for creating any advertising or marketing communications message is the AIDA Model: get Attention, hold Interest, arouse Desire, and then obtain Action.

The AIDA Model

Advertising Campaign of Mobilink:What Mobilink Communicates Mobilink GSM – Reshaping Communication The Mobilink World encourages people to talk to each other and form lasting bonds with one another. Mobilink feels great pride in the fact that, the largest cross section of people using mobile technology in Pakistan, share their joy, their relief, their anger and sometimes their sorrow together as one nation, using Mobilink‘s systems and facilities. 67

Mobilink‘s new vibrant, rich and unique brand colours signify their re-birth and their unique stature in the Pakistan telecom landscape and they resolve of becoming a total communications‘ solutions provider. The rich, vibrant colours are a reflection of the vast portfolio of new concepts and superior services that they stand committed to bring to their customers and enrich their lives. Today they are confident that they have all the essential building blocks in place to take the dream forward and to play a leadership role in the rapid growth and development of telecommunications in Pakistan. Their new look and feel is reflective of their new vision and thinking. In 2003 they invested upwards of US$ 200 million in improving their network and services. They have already put in 7 switches, over 820 cell sites and new IN platforms for better coverage and connectivity. In 2004 they were committing more than US$ 250 million in technological upgrades, superior customer services, improved coverage, 85 new cities and a portfolio of value added services including 2.5G services and multi media messaging amongst a host of other exciting offerings. Their Customers remain their priority and in an effort to enrich their lives they have put in place state-of-the-art call centres in Karachi and Lahore where well trained staff is geared to answer complaints and queries, and a new billing system is in the process of commissioning. They are constantly expanding their nationwide franchise and distribution network and upgrading them to offer customer services so that their customers can find a Mobilink contact as near them as possible. At Mobilink they believe their employees are their ambassadors. In 2004 alone, they are investing approximately a million dollars in training and development of their employees so that they can better serve their valued customers. They feel confident in our abilities to provide superior services to our customers because we know that we have put in the investment for the future. This reflects our commitment to the people of Pakistan. Join them in welcoming the new Mobilink look and vision; a vision of bringing together the people of Pakistan and forming lasting bonds; a vision of service to the people of this country and in so doing, offering them the World as they see it. Join them in Reshaping Communication.

What Jazz Communicates Jazz communicates to the young generation of our society. Its slogan “Jazz Lao Life Banao” communicates to the young generation of our society. It is the slogan of the young generation. As Jazz meanings are music, dance and enjoyment. It‘s red and yellow colours depict life, energy and enthusiasm. This 68

suits to the youth and youngsters. And red colour is also the colour of youth so all these features attract our new generation. That‘s why you will notice that almost all youngsters attract by Jazz and to buy Jazz connection is their priority. So Mobilink communicate their message very effectively in the minds of people

Brand Identity Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer‘s mind. Another slogan of Jazz “Live Your Life” also hit the youngsters between the ages of 16 to 25 who want to live their lives according to their own manners .they want to live life according to the own principles so this slogan is also the voice of youngsters.

As youngsters also have limited financial resources so this ad another time attracts the youth. In this an incentive is given to the young people that they could get connection the amount of scratch card so this incentive attracted the large number of teenagers towards them and they bought Jazz connections Another slogan of Jazz is “jiyo zara apnay style say” also hit to the young people. As in this busy world when everyone busy in his own life and no one have time for others and everyone wants that others adopt their style instead thy adopt the style of others. So you will see that almost all people especially used to say jiyo apnay style say means the way or manner in which you want to 69

pass your life. So we can say that jazz create action desire, interest and attention.

Advertising of Paktel The New Paktel Blues: Type Phase The brain acknowledges and remembers shapes first. Reading is not necessary to be able to identify shapes, but identifying shapes is necessary to be able to read. Since simple and distinctive shape makes a faster imprint on human memory, Paktel GSM logo is accordingly held fast.

Paktel GSM font is futuristic depicting a clear and modern approach. Simple and in italics it depicts the move forward yet comes out as composed and a coherent whole. The new refined font coupled the tinge of dexterity transforms in to a flexible outlook. The blue background gives the brand a young and fresher look, whereas the type phase, illustrates the confidence, stability and corporate image.

Colour Colour is second in sequence; colour can trigger an emotion and evoke brand associations. Paktel GSM.

Different people, different landscapes, different cultures, but one nation, one common expression, one common voice, one choice-Paktel GSM- a brand that understands your needs and speaks to your mind and heart. Paktel GSM is young, progressive, energetic, genuine and honest, clearly someone from your bunch of friends, who never lets you down and deeply inclined to your side-a true companion and well wisher.

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Paktel GSM, a fresh dynamic and customized brand befitting your lifestyle in order that you feel it as part of your life. A brand that you can always count on, sincerely, that understands your needs, wishes and desires and helps you get connected with your loved ones anywhere, anytime. So break your blush, speak your heart out and be good to your expression as Paktel GSM is all set to mesmerize you with the ever-entertaining journey of life.

Communication of Paktel The Paktel immense advertisement communicates that you can talk to anyone any time from your Paktel connection .You can say others the secrets of your heart and the voice of your heart and for this purpose you don‘t need to wait. Anytime anywhere you can talk to them by using your Paktel GSM. When we belong to one nation, one country, one land and one sky then why you wait to talk to your love ones. Our soul is one our heart is one and we have only one body. Whenever the memory and reminiscences of our loved one disturb us we can talk to them. Now distance and boundaries doesn‘t matter. You can love of your loved ones from all over the country. Although our destinations, aims and goals are separate. But come and finish these distances and come close to each other. And this is the voice of millions of Pakistanis

Tango The communication of tango when compared to other products is very poor. but there was a time when tango‗s slogan “is say sastee sirf khamoshee” attract a lot of clients towards them and Paktel earn quite a large number of revenue from this but now this product completes its life cycle and Paktel decided to finish this product from the market. The total share of tango in the prepaid customers of GSM is about 3 to 4%.

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Comparison of Advertising of Mobilink & Paktel The commercial of Paktel is quite attractive when compared to Mobilink. The whole advertisement campaign is given to “Red Communications”. Its T.V commercial of Paktel GSM has the budget about 10 million in which different cultures and people are shown. But the slogan of Paktel does not give any specific meaning .People can‘t understand what they want to say until you will hear the whole song then you will able to get some meaning. The ad has only colours but it is senseless. Paktel is spending enormous money on its advertisement.

They telecasted the Paktel song on GEO T.V before 8 O‘ clock news which is one of the most favourite T.V Channels for about one month. On Eid-ul-Fitar Paktel commercial is repeated after every 5 minutes .It looked that there was a competition and a tussle between U-Fone and Paktel and each one try to dominate other .They sponsored the transmission of many T.V channels as I.M. On Eid-ul-Azha Paktel sponsored many T.V programmes on ARY and Indus Vision. But the question arises that is all this create enough revenues? Is their advertisement budget is more then the revenues they get? Is it effecting people decision making? Is Paktel succeeding in snatching customers from the market leader? If yes then why the customer base just increases from 351,170 to 488,343 in three months? The difference is 137,173 averages of 45,724 and average sale of connections per day is only 1,524 and Paktel according to market share is still on 4th position. The new T.V commercial of Mobilink Jazz now a days is very attractive. Now a day Only Jazz ads are on air and new Jazz ad is also attractive but there was a time when Mobilink T.V ad of Mobilink star was the most favourite T.V commercial of many people. Its commercial of Mobilink Indigo is also very attractive but Mobilink is penetrated and has made its position in the market that it does not require a massive advertising. Its brand has made position on 72

the minds of people now every cell phone user is well aware of Mobilink. The slogans of Mobilink are very popular, well known and well understand. Mobilink is doing its advertising in a very systematic manner so that its message has been given very quickly to different segments of the society. Its market share has grown very significantly and captures about 60% of total Market share.

Comparison of Billboards of Paktel and Mobilink When you will outside, you will see a lot of ads in the form of banners and huge and gigantic billboards at many places attract your attention automatically. There is huge billboard on the top of a century tower at Kalma Chowk, which is one of the top places of advertisement in Lahore where the view of the board is made from 4 sides. Mobilink occupy this silver place from a long time whenever any new offer is given it is put over there. Paktel is also not behind you will see there billboards at many places as on Canal at Barket chowk, at Town ship entrance and at so many places

Comparison of Print Media and Brochures Mobilink advertises its various ads in routine in many famous newspapers; the new Jazz ad of Mobilink is coming in many newspapers on front paper Paktel is not behind from Mobilink in any way. Whenever any offer is given in the newspaper on the front paper and sometimes full page ad is given which automatically attract the attention of people.

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This ad is published in dawn and in Jang newspaper on the front page about 20-25 days before in which Mobilink is offering the mobile of the year.

Publicity Publicity is the generation of awareness about a product beyond regular advertising methods. Usually publicity is less costly than advertising because sometimes the message is spread for free by a newspaper article or TV story. Examples of Publicity famous person photographed using your product or famous people in the ads e.g. Film actor Shan in the commercial of Mobilink Indigo and Ali Azmat in the ad of Paktel GSM

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your product mentioned in National News in a positive way e.g. various articles published in newspapers in which telecommunication and cellular trend is mentioned When officially many events are celebrated as Basant now a days another way of Publicity. Mobilink always celebrate its Basant in Faisalabad But Paktel didn‘t celebrate Basant this year. Last year they celebrate it on the top roof of Sidique trade centre. But many other displays were put on at many places of Lahore

Advertising versus Publicity Factor

Advertising

Control

Great

Credibility

Lower

Higher

Reach

Measurable

Undetermined

Frequency

Schedulable

Uncontrollable

Cost

High/Specific

Low/Unspecified

Flexibility

High

Timing

Specifiable

Publicity Little

Low Tentative

Sales Promotion It is the short term incentives to encourage the purchase or sale of a product or service Major sales promotion tools used by Paktel and Mobilink are 75

Point of Purchase (POP) Point of purchase include displays and demonstrations that take place at the point of purchase or sale e.g. at many franchises and dealers you will see the huge posters and brochures of Paktel and Mobilink which attract the buyers but unfortunately many retailers do not like to handle hundreds of brochures and displays. Therefore, manufacturers have responded by offering better POP material tying them within with television or print message, and offering to set them up.

Price Pack Price pack is reduced price that is marked by the producer directly on the label or package. Price packs can be single package or two related products banded together as Mobilink offers connection plus Rs 300 plus Nokia 3310 in just 4,500. Similarly, Paktel offers connection plus scratch card and Nokia 3310 for just RS 3,999.

Premium Premium is good offered either free or at low cost as an incentive to buy a product. Mobilink is offering call and control on Indigo in which same bill, same connection but having two numbers .You have to pay the line rent only and the person who is having supplementary connection enjoys the benefits of post-paid by using the scratch cards in prepaid form.

Direct Marketing Direct marketing is the direct communication with the carefully targeted individual consumers to obtain an immediate response.

Customer database 76

Customer database is an organized collection of comprehensive data about individual customers or prospects, including geographic, demographic psychographics and behavioural data. Mobilink is outdated all others in this regard as it is maintaining a huge database of about 5 million customers and in which it is maintaining the data about each and every call, its duration, date of billing, time of paying bill, date and time of card loading and of which denomination. In short all the history of the customer calling behaviour from the first day of using Mobilink.

Telemarketing Telemarketing is using the telephone to sell directly to customers. Mobilink also win the game in this regard. It calls to its customer when hey first time got the connection of Mobilink but this welcome call is given only to post-paid. But very soon this welcome call will be given to prepaid customers also. Mobilink also send SMS to its customers on many events and festivals. Mobilink also send SMS and call its customers at the end of expiry of the grace period of the card

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What is Place Place is also known as channel, distribution. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer. According to Bucklin; ―A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption.‖

Place Strategy The part of the marketing mix concerned with: – Getting the product from producer to buyer – Physical transportation and handling – Choice of sales outlets – Intensity of market coverage There are two basic channel decisions, 1. Does a company use direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a retailer) 2. Single or multiple channels Mobilink and Paktel use both direct and indirect channel of distribution, their connections are available on their distributors as well as franchises and retailers, so that they are using multiple channel of distribution .

Types of Channel The consumer's source of purchase is mainly through the Distributors, Franchise and retailers.

1. Distributors:Distributors are considered as the ―backbone” of a company. They break down 'bulk' into smaller packages for resale by a retailer and also they sell 78

connections to the customer at lower price than the company‘s customer service centre gives. Both cellular companies Paktel and Mobilink have their distributors in Hafeez Centre and Hall Road.

2. Franchise Franchise is the ―A business contract in which an independent business (the franchisee) sells or markets the products and/or services of a larger firm (the franchiser). The franchisee receives training and marketing support from the franchiser and pays a fee for ongoing support‖ Every Paktel and Mobilink Franchises extends a full range of services and reliability that is associated with the Paktel & Mobilink brand. Each franchise is adequately equipped to process sales, collect bills and offer other customer services e.g. Scratch cards, Information on services and facilities and much more…so that their customers can find a Mobilink & Paktel contact as near them as possible. Mobilink is the first mobile operator to introduce the ―franchise‖ concept in the mobile industry in Pakistan, and currently operates the largest franchise network in Pakistan with over 250 franchisee/national distributors. All franchisees have trained sales and service staff, fully capable of tackling sales challenges. Paktel has 246 franchises all over the Pakistan All franchises have been newly renovated. Paktel‘s franchise motto is ―we serve with a smile‖. They offer Paktel‘s sales and customer services facilities under one roof for customer‘s convenience.

Comparison Mobilink has 15 and Paktel has 18 franchises in Lahore.

Mobilink Dataderbar Shah Alam Centre Point College Road Faisal Town Jail Road Shadman Gulberg Main Boulevard(I.Q)

Paktel Garden Town Thokar Niyaz Baig Bhatti Peco Road Johar Town Jail Road(EFU building) Shadbagh Gulberg Main Boulevard(defence) 79

Link Road(M.T) Davis Road Mulana Shauqat Ali Road Cantt. Ferozepur Road Township

Link Road(Shalamar) Baddian Road Samanabad General Hospital Yateeem Khana Township Shahdara Emperos Road Mall Road

3. Retailers Retailers are also measured as an important channel of distribution. According to a survey of Dawn, 48% cellular connections are sold through retailers. The role of retailer in selling is important because: Retailers will have a much stronger personal relationship with the consumer. The retailer will hold several other brands and products. A consumer will expect to be exposed to many products. Products and services are promoted and merchandised by the retailer. The retailer will give the final selling price to the product Retailers value a lot to the Mobilink, Paktel and other cellular companies. In Every street and in every area of the country their retailers are available from them customer can get scratch cards and connections. Mobilink and Paktel entertain their retailers by offering them scratch cards and connections at lower price.

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Marketing Channels Company

Customer

Company

Company

Company

Distributors

Franchise

Distributors

Retailers

Customer

Customer

Customer

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Competitive Advantage It is an advantage over competitors gained by offering consumers greater value then competitors offer Various strategies adopted by Mobilink and Paktel are 1. 2. 3. 4.

Penetrating Strategy Focus Strategy Differentiation Strategy Market Development Strategy

1. Penetrating Strategy It is a strategy for company growth by increasing sales of current products to current market segment without changing the product. Mobilink first priority is of penetration in the market because at this time when its market share is quite high and two new companies will launch soon then Mobilink is trying to make its customers loyal as much as they can.

2. Focus Strategy In this the company focuses its effort on serving a few market segments well rather then going after the whole market. Although Mobilink first priority is of penetration but in the long run it‘s planning to serve only few market segments.

3. Differentiation Strategy In this the company is trying to concentrate on creating a highly differentiated product line and marketing program so that it comes across as the leader in the industry. In this arena of cellular trend almost all companies are providing almost the same products. But still Paktel and Mobilink still adopting differentiating strategy as Paktel‘s Tango has some unique features which others don‘t have. In late night Tango to Tango call is free. This service is unique and different as it is not offered by any other cellular company. Similarly, Mobilink call & Control is also unique as it is a unique combination of post-paid and prepaid. 82

In this one connection you can get one supplementary connection then you have to pay the line rent and other charges then you have to use it as prepaid by using card. This system is very useful for U-Fone hit the market by providing the services of GPRS and MMS services but Mobilink will launch its services of GPRS and MMS in the start of March 2005. At this time this facility is provide to at only official level to its employees only. So Paktel and Mobilink both are striving for the new products and services. But Mobilink has some advantage over Paktel as it has much more services than Paktel and its coverage is also largest among the entire service providers in the country.

4. Market Development Strategy A strategy for company growth by identifying and developing new marketing segments for current company products. This is the basic strategy of Paktel to increase its clientele as its share in the market is lowest so it is trying its best to increase their customers because there is a lot of potential in the market for new customers. Mobilink second strategy after penetration is market development. It wants to increase its customers but at the sane time want to retain only those customers who will generate enough revenue and at the same time remain with them for a long time

Are there Winning Marketing Practices Besides winning business practices, is there a set of winning marketing practices? One frequently hears of one liner formulas that promise marketing success. Here are nine of more prominent one-liners:

1. Win through higher Quality Everyone agrees that poor quality is bad for business. Customers who have been burned with bad quality won‘t return and will bad mouth the company. As all the cellular service provider companies have very poor services and most of the time you find difficulty in connectivity. As long as Paktel was on AMPS only its connectivity was considered to be best. But due to its conversion on GSM its service is no longer considered to be good although its AMPS customers are still quite satisfied with its service but GSM customers continuously complaining the disturbance in the connection and disconnection. On the other hand Mobilink connections also give errors or no signals on any national event and religious festivals. But Mobilink first priority is now good service and they want it at any cost.

2. Win through better Customer service We all want good service. But customers define it in different ways. Every service breaks down into a list of attributes like speed, cordiality, knowledge, 83

problem-solving and so on. When we compare there services of Mobilink and Paktel we will immediately come with a conclusion. There was a time when Paktel customer services were very good but when they franchised their sales and customer offices there services proved to be very poor. On the other hand the customer services of Mobilink proved to be excellent. Even when you will call to their call centre they will very politely provide the answers of your queries. In short the Mobilink customer services are much better then that of Paktel. The basic theme on which Mobilink wants to win the market is on better connectivity and customer services.

3. Win through Lower Prices Paktel was trying to snatch the market from market leader on the basis of prices but its dream has been broken by U-Fone by lowering down its price amazingly from Rs 5 to Rs 3.

4. Win through higher Market share Generally speaking, market share leaders make more money than their lamer competitors. They enjoy scale economies and higher brand recognition. There is a ―bandwagon effect‖ and first time many buyers have more confidence in choosing the company‘s product. That‘s why people are automatically attracted towards Mobilink and especially the youngsters towards Jazz. Mobilink, no doubt wins the market through its high share.

5. Win through continuous Product Improvement Continuous product improvement is also a sound strategy. Mobilink is working in this regard as it will offer the services of GPRS and MMS to its customers in the start of March. Although U-Fone has an edge over all other cellular companies in providing more value added services but Mobilink finishes its competitive edge of U-Fone in this regard.

Competitive advantage of Paktel over Mobilink The only competitive advantage of Paktel over Mobilink is low prices and the pioneer in the cellular industry

Competitive advantage of Mobilink over Paktel The Mobilink has many competitive advantages over Paktel. First is highest market share second is pioneer of GSM and in GSM for about 11 years where as Paktel in GSM is like a new born baby. Third advantage is superior customer services and fourth is qualified professional staff. Fifth the most important and last one but not least is people perception and brand loyalty for Mobilink

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Marketing Strategies for Competitive Advantage Mobilink

Instaphone

U-Fone

Strategy a Company Adopts Depends on Its Industry Position

Paktel

Market Leader The firm with the largest share in the market is the market leader. Mobilink with about 60% market share is the leader.

Market Leader Strategies Expanding the Total demand Market leader can expand the total demand of their products by developing new users, new uses and more usage of the same product. Mobilink is adopting this strategy in order to get the highest share in the market. By adopting market development, they are maintaining their highest share.

Protecting Market Share The market leader also tries to maintain and protect its highest share in the market by adopting various strategies. Mobilink also try to maintain its share by providing superior customer services, trying to overcome its weaknesses. The leader should ―plug hole‖ so that competitors can‘t jump in. 85

Market Follower strategies Not all runner-up companies challenge the market leader. Challenges are never taken lightly by the market leader. As in this case Paktel although the market follower but challenges the Mobilink by lowering down their prices and by massive advertising in order to attract the customer. Follower is not the same is being passive or carbon copy of the leader. Each follower tries to bring distinctive advantage to its target market as Paktel tries to get customers on low charges.

Pull Strategy Pull tactic is customarily based on an advertising campaign targeted to the end consumer, i.e. is the person who is going to use the product - the person who is going to use the mobile phone. In this competitive arena both Paktel and Mobilink is adopting pull strategies to attract customers. The advertising of both companies is massive and customer-oriented.

Push Strategy Push" tactic is not based at the end consumer but at the other members of the distribution channel. This can be done by means of special offers, trade allowances, contractual agreements and other methods. All these methods focus on stocking the middle person, i.e. the person between the manufacturer and the end consumer. The both companies are providing them enough incentive to their retailers and distributors so that they will sell their more and more connections. In this the distributor and retailer has been given commission on every connection so that when more and more connections they sell more they got commission.

Competitor-centred company Competitor-centred company is a company whose moves are mainly based on competitor‘s actions and reactions. Paktel is a Competitor-centred company as it‘s mostly decisions are made after the changes in marketing strategies of Mobilink and U-Fone.

Market-Centred company Market-centred company is a company that pays balanced attention to both customers and competitors in designing its marketing strategies. Mobilink is a Market-Centred company as it proved attention to its customers and also keeps an eagle eye on changing marketing environment 86

BCG Matrix Relative Market Share

Low

Market Growth Rate

High

High

Stars Indigo

• High growth & share • Profit potential • May need heavy investment to grow

Cash Cows Jazz

Low

Question Marks Paktel GSM

?

• High growth, low share • Build into Stars or phase out • Require cash to hold market share

Dogs

Tango

• Low growth, high share • Low growth & share • Established, successful • Low profit potential SBU‟s

•Produce cash

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Gone are the days when a man could be judged by his shoes. With mobile phones and different services provided by the cellular connection entirely change the living style. Hot on the heels of the unique take-off in advanced economies of modern communications technology, a world of innovation is now at the fingertips of most of Pakistan's elite. The introduction of mobile phones to Pakistan's shores has been a smashing success, if profit figures of the four mobile network service providers are anything to go by. Demand it seems has never been higher. And with an eager professional class quick to capitalize on the business possibilities of the new technology, coupled with an increase in the ranks of a fashion-elite ever keen to refine its yuppie airs, the sales of mobile phones are soaring, posting almost incremental increases over the past three years. The mobile phone service has become integral part of the growth, success and efficiency of any economy. The mobile industry has come a long way since its lacklustre debut in the nineties. For Instaphone, Mobilink, Ufone and Paktel - the four service providers in Pakistan - this has meant a huge increase in research and development. The stakes are high, with each service jostling to entrench its position in an ever expanding market. Investment has been heavy in network expansion, with million dollar deals being cut with international companies. This is good news for customers. A new world of competition in pricing and technology has opened up, with a number of value added services on offer, designed to lure a particular niche market. Whether in the form of a chat club service for the young and trendy, or corporate club discount options, the wonders of the latest mobile phones can include options such as mobile 88

banking, fax and information services, internet access, instant updates, conference calling and g-mail. Mobile telecommunications service providers operate in an environment of intense competition and high customer turnover as Pakistan has awarded two new cellular phone licenses to Warid Telecom of the UAE Syrian based Space Telecom and Norway's Telenor Mobile Communications to meet the country's growing demand for mobile phone services. Maintaining customer loyalty in this market was a key challenge for the cellular companies, survey shows that on the average, a person can only spare 30 percent of his/her income for telecommunication needs. With the per capita income of $495, a person can spare only $1.37 for all telecom services it is expected that mobile phone subscriptions worldwide will increase to 15 to 20 times more in 5 years, and to remain in the market consumer protection is a key consideration in the introduction of competition to telecom markets. The mobile phone business in Pakistan, however, with all its possibilities, is still in its infancy. Far and away, the winner in the race to capture the lion's share of the mobile network market, is Mobilink, with a notably higher volume of subscriptions, Mobilink enjoys 63% as the figures till December 2004 and Paktel having only 7% of the market share. Mobilink has more than 5.5 million subscribers where has Paktel only has 488 thousand subscribers all over the Pakistan. Now a days wireless world is GSM based instead of AMPS. Mobilink is the pioneer of GSM in Pakistan telecommunication sector and operated from 1994 till 2005, where as Paktel shifted from AMPS to GSM in 2004. Mobilink has a geographical coverage of more than 300 cities whereas Paktel offers GSM coverage in only 67 cities. Both companies provide prepaid and post paid packages at different rates. Paktel was considered as the cheapest call charger connection with airtime 3.75/min but now Ufone offers 3.00/min. If we have a look at the Mobilink call charges then Mobilink charged 4.75/min but the question is: IS Price Enough To Win the market share or customer trust on company or give more satisfaction to the customer? the answer would be simply no.. Customer will happy from the company when they got the required value and satisfaction. This is the main reason on the basis of which with the higher call rate Mobilink still on the top, because Mobilink emphasize on the better services whereas Paktel believe to win the market on price war. Increased competition during the past three years provided the impetus to service providers to incorporate various fun elements to their service. A range of value-added services have been developed, serving as a popular marketing lure for customers susceptible to all that is trendy. A range of popular extras such as caller line identification, voice mail, conference call and call waiting facilities, compete with fun options such as a range of SMS, chat clubs, internet 89

email notifications, and internet connections. For the executive class these options include fax and information services, instant news updates and business features such as mobile banking. Mobilink and Instaphone have invested heavily in these additions with Paktel and Ufone lagging far behind. With each network hoping to throw out the sales of the other, the revolution in new technology provides another means of competition. Encouraged by the rising market for cellular phones, all networks have undertaken massive technological development and continue to do so with a combined expenditure of US 120 million dollars this year In the success of a company, employees attitude towards customers really means because customers are the assets of the company. Mobilink and Paktel both has customer service centres/franchise, but performance and attitude vise Mobilink with its well educated and trained staff take the lead over the Paktel, Mobilink‘s Customer service too is friendly, with an automated phone mechanism that directs customers to particular departments, providing a choice of Urdu- or English-speaking operator, whereas Paktel‘s staff is not fully trained in the dealing with customers and always make customers wait for their services and take or sometimes not attend phone from toll free numbers to answer the customers complaints. It is in the PTA report that Mobilink, is the only mobile company took steps for the betterment of quality. Advertising is a manner to differentiation of competence. There are many products very similar in the market. Companies inform to the audience about which characteristics have their product, which are different to others. By way of advertising companies can send this information easily to the audience. Many television commercials feature catchy jingles (songs or melodies) or catch-phrases that generate sustained appeal, which may remain in the minds of television viewers long after the span of the advertising campaign. For cellular companies like Mobilink, Paktel, Ufone advertisement has a great worth. Although Paktel add ―Dil Tu AIk hai‖ is appreciated by the people but that does not make any sense, brand image is very weak. Paktel will have to elaborate the features benefits and highlight these in their advertisements to increase the awareness amongst the target market. The attribute of clarity, coverage and connectivity will have to be highlighted in the ads of the campaign, whereas in the Mobilink adds they enhanced the services provided by the company. Now the question arises that Mobilink has the higher connection charges and higher call rate than the Paktel, Ufone and Instaphone then Why Mobilink still the market leader?? The reputation of the company is partially based on the people perception, People considered Paktel as old brand and confused about their services whereas Mobilink elaborate its brand and its services in the minds of the people very nicely so that they become loyal with 90

the Mobilink. To be the victor in telecommunication sector Paktel has to concentrate on their services. The expected competitors of the mobile companies are Al-Warid and Telenor. Though GOCDMA and PTCL wireless connections effect the cellular industry, but they are not strong threat for the existing mobile companies because they will be useful and useable only in a described or specific area (10-25kms).But if a person wants to call beyond the particular area PTCL wireless and GOCDMA are of no use, that time only a mobile has value for the customer because they has mobility and you can call wherever you want to. In other words at that time only mobile companies will be your companion. Al-Warid and Telenor are the new cellular companies which start giving their connections in the first quarter of this year. Telenor is considered as the strong competitor for the cellular industry than Al-Warid because it has a powerful cellular background as it is the leading cellular company in Norway and Bangladesh and having 55% market share in Bangladesh and develop its position as mobile operator in 12 countries. But if we talk about Al-Warid owned by the Abu Dhabi group (Sheikh Nahayaan Mubarak Al-Nahayaan), we don‘t find any cellular background. So what will the technology race and heavy duty investment offer Pakistani customers in the future? Prices of handsets and accessories have fallen precipitously as companies struggle to increase their market share. "The mobile phone is now more of a necessity and less of a luxury," Intense competition in the western world has led companies to offer throw away deals with free phones, discounted line rental, and a host of free mobile accessories. These trends may very well be mirrored in Pakistan once the market stabilises. With the proliferation of new technologies and new innovations, Pakistani companies will also be attracted by what they stand to gain by making their services more accessible. Muslim Commercial Bank has already teamed up with Mobilink to offer a mobile banking service. Customers of Mobilink and MCB can now make inquiries about their account balance through their phones using the SMS messaging facility, and are able to receive ministatements. This venture has also provided MCB with a unique advertising opportunity - they can now save on advertising costs by texting their customers with the latest in products and services. Mobile commerce might just change the way people work, giving companies a more customer-focused look.

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Kindly fill the form with the correct information and return back to the investigator. If you have any difficulty in filling the form kindly ask the investigator instead of filling it wrongly. Age group a) 16-25

b) 26-35

Gender a) Male

b) Female

Occupation a)Business

b)Salaried

Income level a) below10,000 c) 25,000-40,000

c) 36-45

d) Above 45

c) Student

d)Others

b)10,000-25,000 d) above 40,000

1) How long you are using mobile? ___________________ 2) What type of connection you have? a)Prepaid b)Postpaid And of which cellular company? a) Mobilink b) Paktel c) Ufone d) Instaphone 3) Which feature you consider while buying your connection? a) Airtime b) GPRS c) Connectivity d) Connection Charges e) Value added services (online billing etc) 4) Do you buy your connection for? a) Company reputation b) Geographical coverage c) Advertisement d) Reference Group 5) How you find the services of your connection? a) High b) Medium c) Low 6) You mostly use your mobile phone for? a) Calling b) SMS 92

c) Utilities

7) Have you ever quit from one connection to another? Yes_________ No___________ a) Mobilink to ____________ b) Ufone to ____________ c)Paktel to ____________ d)Instaphone to____________ 8) How many connections you have and of which mobile companies? ___________________________________________________________________________ _ 9) Which mobile company you think is best? a) Mobilink b) Paktel c) Ufone d) Instaphone Why? ___________________________________________________________________________ _____ 10) Are you satisfied with your connection? a) Yes b) No 11)How do you find the customer services of he company of which you are using connection?? a)Excellent b)Good c)Satisfied d)Poor 12)Which cellular company’s commercial attracts you most? a) Mobilink b) Paktel c) Ufone d) Instaphone 13)If new company will offer better service and package will u switch over from your existing connection? a) Yes b) No

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14)Recommendations for your cellular company ___________________________________________________________________________ ____ ___________________________________________________________________________ _____ ___________________________________________________________________________ _____

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Mobilink Strength Highest market share. Brand Loyalty Highest coverage Low connection charges Excellent customer services. Aggressive Advertisement Trained & qualified staff Superb internal environment Tremendous information systems and having huge customer databases. First-rate company reputation so people creates good word of mouth about Mobilink. Trained and qualified staff.

Weaknesses Poor connectivity especially at festivals and events Balance deduction is not reliable. High rates with comparison to other companies Decisions made by head office so there is a delay in decision making.

Opportunities To reduce prices Increase customers on the basis of company reputation and by reducing prices, as there is a huge potential in the market. Increase its geographical cities More and better advertisement Increase sale to post-paid customers by giving them incentives.

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Threats Upcoming mobile companies i.e. Telenor & Al-Warid especially Telenor because it has vast experience in cellular industry and largest cellular service provider in Norway. WLL companies as GO CDMA & wireless of PTCL. U-Fone as it has lowest charges and totally Government owned so has full support from Government.

Paktel Strengths Low prices. Packages like free 100 SMS. Newly introduced GSM. High connectivity. Aggressive advertisement. Low connection charges. Many bundle offers at lowest prices compared to Mobilink.

Weaknesses Low market share. AMPS connections are not convertible GSM connections. Low geographical coverage. Balance is not deducted according to advertisement. Very poor customer services. Call centre does not reply. Poor connectivity of GSM, line distortion. Untrained & unqualified staff.

Opportunities To increase market share. To increase areas of geographical coverage. To shift all numbers from AMPS to GSM. To increase sale of post-paid connections. Introduce Mobile banking. Introduce GPRS & MMS. Provide more value added services. Increase customers through better customer services.

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Threats Market leader i.e. Mobilink. Upcoming mobile companies i.e. Telenor, Al-Warid. Low brand loyalty of Paktel customers. U-fone totally owned by Government has much lower prices.

Recommendations Mobilink To improve connectivity at special occasions like Eid & Basant etc. To make reliable the system for deducting the balance for both prepaid and post-paid customers. To provide SMS free of cost to further attract customers. To make advertisement more strong. To reduce their prices in order to attract more customers. To introduce cards of lower denominations & their validity. They should provide online services.

Paktel To increase the coverage areas. To improve the services further. To make the balance deductive method more reliable. To advertise more directly. To show all the charges including tax & PTCL charges instead of only showing the airtime/min in the advertisement. To make their customers brand loyal by providing them with best services. To improve the quality of customer services. To introduce such exciting services like GPRS & MMS. Not to provide customer services on the franchises. To provide more value added services. They should update their website. Customer care numbers should respond. They should introduce a system to convert the AMPS connections to GSM connections without changing the numbers.

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Conclusion We have seen the over all performance of both the companies i-e Mobilink & Paktel. From all the above information and the research we have conducted by our selves it is clear that in spite of the fact that Paktel is trying its best to grab the market share by lowering the prices frequently, but still Mobilink is the best. Mobilink is the market leader and is also admitted by all other mobile companies too. In spite of the fact that the Paktel is the oldest mobile company in Pakistan it has not done much to capture the market share. The main for this what we think is that there customers have no brand loyalty, they themselves say it. And the same reason apply to Mobilink for its big market share that is, its customers are brand loyal. According to news report Mobilink has invested recently $400 billion in year 2005. So now it has a total investment of mor4e than a billion dollars. According to an estimate total number of people using mobile phone in Pakistan are 80 lakh of which 50 lakh are using Mobilink. Paktel has tried its best through its advertisement to attract the customers but instead of all this it has not successfully achieved its objective. The other thing is that it has senseless advertisement. It does not clearly communicate what it should. On the other hand Mobilink ‘s advertisement is quite sensible and people can clearly understand what they want to communicate. Although Mobilink also has some weaknesses like customers are very unsatisfied with its services on special occasions like Eid etc, whereas the customers of Paktel have no such complaints. Another major drawback of Mobilink is that its prices are still high than any other company in Pakistan. But still a lot of people use Mobilink specially its Jazz package because a lot of people think that it is affordable. Its affordability can be judged with the fact that today a ‗gawala, a chicken seller or a vegetable seller‘ is using Jazz. Jazz has become so popular now a days that almost 50-60% people li8ke to have Jazz. Especially more youngsters are using Jazz. It may be due to the fact that a lot of their family members and friends are using Jazz and they can talk to them at much lower rate if they too are using Jazz. Mobilink has also done segmentation for its customers. It has done income segmentation. It hits individuals and youngsters who have low income for its prepaid packages-Jazz and hits corporate base and business people with high income for its postpaid packages. Mobilink also believe to charge different prices from different people i-e geographical pricing. On the other hand Paktel hits only individuals and does not believe in geographical pricing. When we talked to a representative of Mobilink, he told us that price war is not a solution, customer want better customer services and a quality service, what Mobilink is try to provide. The thinking of Paktel people is quite different in this regard. They say that customer want services and low airtime charges. Now we can judge by ourselves whose strategy is best by analyzing the way these companies are 99

making progress. Mobilink want customers that are good pay master and long lasting. The Mobilink marketing manage3r Mr. Awais said that the brand name of Mobilink make it the market leader and differentiate the company and its brands from its competitors. And we think this is quite right. In answer to a question that how you encourage your customers to use your connection a manager of Mobilink said, ― by extensive advertisement and quality of service‖ and the manager of Paktel answered the same question ― by lowering prices‖. So the main problem with Paktel people is that they consider the prices and the airtime charges as the most important factor. However, this is not the case in reality. People want good services and like the company that cares for the customers on which Mobilink is focusing . In the end we will recommend for the Paktel to change its strategy from focusing on just lowering the prices to customer care and better services. Although Mobilink is a market leader but it should also improve its services specially connectivity at different occasions and complete its upgrading as soon as possible so that people facing problems in connectivity may not face it more.

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Summary Comparison of Mobilink & Paktel Gone are the days when a man could be judged by his shoes. With mobile phones and different services provided by the cellular connection entirely change the living style. The mobile phone service has become integral part of the growth, success and efficiency of any economy. It is expected that mobile phone subscriptions worldwide will increase to 15 to 20 times more in 5 years, and to remain in the market consumer protection is a key consideration in the introduction of competition to telecom markets. Mobile telecommunications service providers operate in an environment of intense competition and high customer turnover as Pakistan has awarded two new cellular phone licenses to Al-Warid and Telenor to meet the country's growing demand for mobile phone services. Now a days cellular world is GSM based instead of AMPS. Mobilink is the pioneer of GSM in Pakistan telecommunication sector and operated from 1994, where as Paktel the pioneer of cellular industry in Pakistan started in 1990, shifted from AMPS to GSM in 2004. Mobilink has a geographical coverage of more than 300 cities whereas Paktel offers GSM coverage in only 67 cities. Products: Both companies provide prepaid and post paid packages at different rates. Mobilink‟s packages Prepaid packages: - Jazz Postpaid packages: - Call & Control, Indigo Paktel‟s packages Prepaid packages: - Tango, Paktel GSM prepaid Postpaid packages: - Paktel GSM postpaid Price: Paktel is considered as the cheapest call charger connection with airtime 3.75/min and Mobilink charges 4.75/min. Mobilink emphasize on the better services whereas Paktel believe to win the market on price war. But price war is not the solution. Place: Mobilink and Paktel use both direct and indirect channel of distribution, their connections are available on their distributors as well as franchises and retailers, so that they are using multiple channel of distribution. Mobilink operates more than 250 franchisee all over the Pakistan whereas Paktel has 246 franchisee in Pakistan. Promotion: Mobilink and Paktel are adopting various promotion strategies in order to attract the customers, one of them is through TV ad, Paktel ad “Dil Tu AIk hai” is appreciated by the people but that does not make any sense, brand image is very weak. Paktel will have to elaborate the features benefits and highlight these in their advertisements to increase the awareness amongst the target market. The attribute of clarity, coverage and connectivity will have to be highlighted in the ads of the campaign, whereas in the Mobilink ads they enhanced the services provided by the company.

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SWOT Analysis: Mobilink: Strengths Highest market share. Highest coverage Excellent customer services. Weaknesses Poor connectivity especially at festivals and events Balance deduction is not reliable. High rates with comparison to other companies. Opportunities To reduce prices. More and better advertisement. Increase sale to post-paid customers by giving them incentives. Threats Upcoming mobile companies i.e. Telenor & Al-Warid especially Telenor because it has vast experience in cellular industry and largest cellular service provider in Norway. Paktel: Strengths: Low prices. Packages like free 100 SMS. Weaknesses: Low market share. AMPS connections are not convertible GSM connections. Low geographical coverage. Opportunities: To increase market share. To increase areas of geographical coverage. Increase customers through better customer services. Threats: Market leader i.e. Mobilink. Upcoming mobile companies i.e. Telenor, Al-Warid. Conclusion: In the end we will recommend for the Paktel to change its strategy from focusing on just lowering the prices to customer care and better services. Although Mobilink is a market leader but it should also improve its services specially connectivity at different occasions and complete its upgrading as soon as possible so that people facing problems in connectivity may not face it more.

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