Swot Analysis Of Ufone

Introduction Ufone GSM is a Pakistani GSM cellular service provider. It is one of six GSM Mobile companies in Pakistan and is a subsidiary of Pakistan Telecommunication Company. The company commenced its operations under the brand name of U fone from Islamabad on January 29 2001. U fone expanded its coverage and has added new cities and highways to its coverage network. After the privatization of PTCL, U fone is now owned by Etisalat. PTML is a wholly owned subsidiary of PTCL. established to operate cellular telephony. The company commenced its operations, under the brand name of Ufone from Islamabad on January 29 2001. During the year, as a consequence of PTCL’s privatization, 26% of its shares were acquired by Emirates Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone has also been handed over to Etisalat. During the year July 2005 to June 2006, Ufone continued on the path to success. The Company further expanded its coverage and has added new cities and highways. Ufone has network coverage in more than 750 cities, towns and across all major highways of the country. During the year Ufone successfully completed the network expansion of Phase 4 in existing as well as in new cities and towns which amounted to more than US Dollar 170 million. As a result the asset base of the Company has increased from Rs. 20 billion to Rs. 27 billion. Future Plans Keeping in view the growth potential of the cellular industry there is no option but to be aggressive in order to remain a potent force in the cellular industry. In order to extend cellular network to new cities, towns and highways and enhance its current installed capacities in existing cities, Ufone has finalized a huge network expansion contract amounting to about USD 550 million, which will enhance the subscribers’ capacity by 10 million. This is the largest ever expansion project of Ufone.

Strengths  Ufone has network coverage in more than 750 cities, towns and across all major highways of the country.  Ufone provides International Roaming facility with more than 150 international operators across 79 countries.  Ufone is proud to have an efficient and friendly customer service through 21 company-owned Sales & Customer Service Centers and nearly 250 franchisees across the country.  Ufone has always believed in a solid commitment to growth, security and reliability. Therefore, Ufone has always balanced its expansion efforts and quality of service. With a total current investment of $400 Million.  Utunes was launched on 4th Dec2007 which attracted many people towards u fone.  U fone is offering the service of Multi-media Messaging Service (MMS).  As mobile users in the country have reached over 78 million at a very rapid pace, Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a subscriber base of around 16.5 million and a market share of nearly 25%. Ufone has seen a subscriber growth rate of over 200% in the last year, and since the start of 2005 Ufone added nearly 5 million subscribers onto its network. A remarkable

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achievement indeed, especially considering the fact that two new international players also entered into the market in 2005. While keeping its tradition of being the trend setter in the industry, Ufone changed the image of mobile phones from a luxury only affordable by the elite, to a necessity affordable by the common man. Ufone increased its focus on the youth segment (which comprises 50% of the population), with the Prepay brand. U fone has the ability to retain its existing customer base with a high level of customer satisfaction via optimum network service and a 24 hour call center facility. It has the post paid service that is normally to attract the Business class people. Most of the business and elite class people use post paid and other services offered by the U fone. Ufone has a subscriber base of 18.97 million as of October 2008. U fone was the first cellular Company in Pakistan that introduced the service of GPRS and hence took the competitive advantage. U fone has some exciting and energetic SMS packages that made SMS almost free. They are offering Rs. 25, Rs.50, Rs.100, Rs. 150 SMS packages which its subscribers are really loving it. U fone has some very exciting and low call packages like “5 ka 15” , “u-one”, u circle”, “ U fone ghanta”, “U fone has some very exciting and low call packages like “5 ka 15” , “u-one”, u circle”, “ U fone ghanta”, “U fone life package”and “ prepay Public Demand” etc which attracted lots of customers towards it and many other cellular company users are also switching to it. U fone post paid is also offering black berry set that is useful and tempting for the Business class. U fone currently caters for international roaming to more than 195 live operators across 119 countries and introduced International roaming facility for Prepaid subscribers in Saudi Arabia, United Kingdom, United Arab Emirates, Singapore, Portugal and Kuwait with lowest rates, featuring no security deposit and activation charges. GPRS Roaming facility is available with more than 75 Live Operators across 59 countries.

WEAKNESSES  U fone does not have the proper lists of its customers. It has the list but this list is not authentic which is increasing the unauthorized use of its sim specially pre pay. U fone have to take serious steps to properly list its customers to ensure that there is no misuse.  It has many franchises in the whole country but as its customers are increasing day by day so its present franchises are not enough to fulfill the needs of it customers.  U fone also face problems and its network get jammed on special occasions like Eid, Christmas, New year etc

 U fone has the problem of voice quality. Though its coverage area is vast and it covers more than 750 towns and cities in Pakistan but the voice quality is not as good as it should be.  U fone though has some unique and distinct services but it has not yet given many innovative services as compared to other cellular companies.  U fone was the first to introduce the SMS packages but their packages are not flexible enough and its charges are only on monthly bases while it should be on both monthly and daily basis.  Call rates from u fone to u fone is very cheap but to other networks its rates are expensive.  Its coverage on Southern part of Pakistan is quite good but in northern areas its coverage is a bit poor.  In U fone web support is not available.  Its customers service staff need training because at many franchises their employees are have been complained about behaving rudely.  If U fone company have to progress and grow in market it has to improve its advertising campaign. Its advertisements are not good and eye catching.  Being the part of PTCL it has to face many problems like strike by employees etc.  When U fone came into the seen in Pakistan cellular market Mobilink was already prevailing in the market and it was all Mobilink monopoly that time. Though with the passage of time U fone took many customers of Mobilink but still Mobilink has large number of users because it was first to Pakistan’s cellular market and this is the competitive disadvantage to U fone.  U fone is plagued with some internal problems like when it is privatized to Etisalaat being the part of the PTCL many employees were not happy with the pay scale that they were offering.

OPPORTUNITIES 

U fone could develop some new and innovative services to attract customers and some of the suggestions are as under which will help them to increase their revenues: 1. It should introduced International SMS packages like local SMS. Already U fone is offering lowest International SMS rates but if they introduce some package like this it will get lots and lots of success. 2. They should also introduce some International call packages to Middle Eastern countries because there are lots of Pakistanis who are living in those countries so people will definitely be tempted towards such package. 3. In “ U fone ghanta” package time of the package should be extend two more hours so that more & more people will use this service and causing U fone to generate more revenues.

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U fone should develop some new franchises in remote areas so that people will get more and more benefit from it and it will help to increase their customers. As in Pakistan Youth is almost the 50% of the population so U fone can take advantage of this demographic situation and should introduce more and more services and packages that attracts youth towards it. U fone should extend its network coverage area to Northern part of the country as well because in that part not too many companies are giving services and if U fone give its service there then it will definitely attract people and its number of customers will shoot like a rocket. It should also introduce some packages for internet users on mobile if it do so then many people will switch from other networks towards it. If U fone enhance its voice quality then definitely it would be prefer more by customers. U fone should import technological equipments from China because they are giving the best technology at very low rates so it will not only help U fone to be ahead technologically but also will help U fone to decrease its cost. U fone can surprise its competitors by introducing “U fone kiosk”. These will be ATM like machines and that will give 24-hour service to U fone subscribers to load the balance just like they take money from ATM.

THREATS 

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As U fone is cellular company and there is cut throat competition among cellular companies in Pakistan. There are six other companies also working in Pakistan so U fone would have to face some growing competitive pressures. Pakistan is facing some serious economic problems now days so that would also effect U fone. The current recession in market is not good for any kind of business including telecommunication. In Balochistan and FATA where U fone already has network coverage is in danger because of critical situation and operation being held there. Investment of U fone is in danger. U fone penetrated in the market from 2005 to 2006 quite rapidly but since then it is experiencing a bit slower growth. By the arrival of China Mobile Company (Zong) in cellular industry of Pakistan the U fone and other companies now have to face the severe competition. As Zong is introducing some various attractive packages of both SMS and calls to attract customers. U fone have to develop strategies to counter their strategy and to survive in the market. The key threat to U fone is also some adverse Government policies of implementing Tax on telecommunication industry that will ultimately affect the revenues. There are some rumors about the shares of PTCL in the market. Being the Subsidiary company of PTCL, U fone will also be affected by that.

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Telenor is giving higher rumenration to its employees as compared to U fone so many of its skillful and competent employees are going there. That will affect the company’s profitability in the long run. Some Pressure groups are protesting on the Towers that are installed in residential areas. Their opinion is that it is not good for health of people to have such towers near their homes that cause radiations. U fone have to revise the list of subscribers who are legal and authorized. Because now the Government has warn to take strict action if any company would not keep such record.