2C Company Backgrnd

7/28/2019 2C Company Backgrnd

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2.9 Organization Structure:

The organogram indicates that the top-level management consists of the MD, the COO and

the CFO. The chief operating officer (COO) monitors the direct operations of the company, whereas the chief financial officer (CFO) monitors the financial matters of the direct

operations. At the same time, they co-operate each other and report to the managing director

(MD).

The managing director is the direct supervisor of all the divisions and departments.

Currently, there are four divisions and four departments. The chief of the divisions are called

the general manager (GM). Conversely, the chief of the departments are called the head of

department. Every general manager has an assistant general manager (AGM) and the heads

of the departments are on the equivalent rank of the AGMs. Divisions deal with the coreactivities of the company, whereas the departments deal with the supporting activities. Every

division has precise units and there is a head for every unit. Below, a concise description of

every unit is specified:

2.9.1 Marketing Division:

Marketing division constitutes seven units. A brief description of each unit is given below:

Brand and A&P:

Brand and A&P denotes to brand and advertising & promotion. This unit deals with the

overall brand management and promotion activities of the company. The unit covers both

outdoor (billboards, road-overhead etc) media and indoor (print & electronic) media. This

unit is also responsible for communicating with the advertising agencies, since AKTEL does

not have any in-house agency. A head of the units reports to the AGM of Marketing.

Product Development:

Product development unit is like the R&D unit of a company, which is responsible for

developing new products and services. This unit is closely related to the marketing research

unit and together the units come up with new service concepts and ideas. Product

development unit is also responsible for monitoring the core services (Pre-Paid and Post-

Paid). Like other units, this unit also has a head reporting to the AGM.

Potential of SME market for the mobile operators in Bangladesh 9



Marketing Research and MIS:

AKTEL has one unit covering both marketing research and marketing information system

(MIS). This unit conducts quarterly research through research firms and in-house interns.

The unit is also responsible to keep track on the latest innovations and new offers of other

operators. In TMIB, this unit is not a full-fledged unit yet. There is only one full-time

employee and three interns working for the unit.

SME

SME unit right now is composed of five members who are responsible for analyzing the

current market situation and about the competitors’ progress. The SME Team generally

reports to the Head of Marketing. Although the SME product not yet launched but the

research is going on in full fledge. The SME team also responsible for the PCO (Public Call

office) products for the time being. In other way PCO is considered a on of the SME product.

International Roaming:

International roaming (IR) unit is basically responsible for ISD, international SMS etc

services. The core task of this unit is to negotiate with foreign telecommunication companies

and to expand the international coverage by making deals with them. There is a head of IR

who reports to the AGM.

Corporate Sales:

Corporate sales unit deals with the sales of products and services to other companies. The

unit makes agreements with different companies to be AKTEL’s corporate clients and only

handle the corporate level sales.

Direct Sales:

Direct sales unit is responsible for the sales of products and services to the mass customers

through the customer service centers. AKTEL has eleven customer service centers around the

country and these centers sell the services to the customers directly.

Dealer Management:

Dealer management unit oversees the dealers of the company around the country. AKTEL

has four dealers and one agent and they need to be monitored and supervised constantly. The

head of this unit reports to the AGM of Marketing.




2.9.2. Information Technology (IT) Division:

IT division constitutes seven units and they closely work together.

Billing:

The billing unit is responsible for processing and monitoring the billing systems for the Post-

Paid users. The unit has a manager who reports to the AGM of IT.

Value Added Services (VAS):

Value added service is a unit that implements the developed concepts and ideas of the

marketing division. The unit is responsible for the development of the software, which will be

used for the application of the new services developed by the product development unit.

Simultaneously, this unit handles the VAS content providers who are the third party to the

company.

Rating (Post-Paid):

This unit is responsible for charging the rates of Post-Paid service. The unit fixes per-minute

and pulse rates and also fix the pulse durations. It also changes the rates on demand basis.

Pre-Paid:

This unit only deals with the Pre-Paid service. It administers the e-fill and scratch card

systems. At the same time, it fixes per-minute and pulse rates and fix the pulse durations.

Product Configuration:

This unit is responsible for designing and developing products and services. It develops the

blueprint of the product-design.

Billing Operation Team:

Billing operation team is responsible for administering the entire billing process and

developing required software for collecting bills from Post-Paid users.

Customer Relations Management (CRM):




This unit supplies required software to the customer care centers and work with these centers

side by side. The centers usually inform CRM concerning their necessaries and the unit

prepares suitable software for them.

2.9.3. Finance Division:

Financial division has eight units dealing with financial matters of the company.

Accounts Receivable:

This unit keeps track on the accounts receivables of the company while preparing the balance

sheet. As TMIB is a large company with thousands of financial transactions everyday, a unit

to keep track on the accounts is necessary.

Account Payable:

This unit keeps track on the accounts payable of the company.

Core Account:

Core account is an important unit of the finance division dealing with the budget and fixed

assets. The annual budget of various departments is prepared under the close observation of

this unit.

Revenue Assurance:

Revenue assurance unit consists of revenue assurance and fraud management. Revenue

assurance monitors the transactions and assures full protection of the finances. On the other

hand, fraud management protects the fraudulences take place in the daily transactions.

Corporate Finance:

Corporate finance unit consists of treasury management and L/C. Treasury management

deals with the inflow and outflow of the company, whereas L/C (Letter of credits) deals with

the L/C opening banks and other foreign banks.

Taxation:

Taxation unit takes care of the tax, VAT and tariffs of the company.




Reporting:

The reporting unit reports the entire financial transactions of TMIB to the parent company in

Malaysia.

Costing:

This unit forecasts the costing of different departments and reports them regarding the

expected expenditure of any alteration.

2.9.4. Technical Division:

The technical division consists of three major units – planning, infrastructure and property

management.

Planning:

The planning unit makes plans regarding the technical matters such as the RF, SWITCH etc.

They assure the proper placement of technical devices and equipments.

Infrastructure:

The infrastructure unit selects the locations and builds the base transceiver station (BTS)

towers. They are also responsible for the maintenance of the towers.

Property Management:

The property management unit manages the technical equipments and assets.

2.9.5. Human Resource Department:

Human resource department is responsible for the recruitment and training of the employees

of the company. They also monitor the performance and handle the promotion and salary

related matters. Along with the HR department, there is an Administration. The

administration is responsible for supplying furnishings and equipments to all the divisions

and departments. They also administer the regulations of the company.

2.9.6. Corporate Strategy Department:

The corporate strategy department determines the long-term strategies and the short-term

plans. All the corporate level policies come from them and they are also responsible for the

implementation.




2.9.7. Corporate Affairs Department:

The corporate affairs department is responsible for maintaining a liaison with other major

companies. Through this department, TMIB makes business deals with other corporations

and assist each other.

2.9.8. Coordination Department:

The coordination department is responsible for the internal and external synchronization. At

one hand, they coordinate with outside companies. Along with that, they harmonize among

the divisions and departments inside the company.

2.10 SWOT Analysis of AKTEL:

From the SWOT analysis, we will observe the strengths, weaknesses, opportunities and

threats of AKTEL (TM International BD Ltd.), which is essential in order to determine the

present standpoint of the company.

Figure 1: SWOT Analysis


SS WW

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INTERNAL

EXTERNAL

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2.10.1. Strengths:

• Joint Venture:

AKTEL is a brand of TM International (Bangladesh) Ltd. (TMIB), which is a joint venture of

A. K. Khan & Co. Limited of Bangladesh and Telekom Malaysia Berhad of Malaysia. A. K.Khan & Co. Ltd. and Telekom Malaysia Berhad comprise 30% and 70% equity capitals

respectively in this joint venture. TMIB started its operation in 1997 after receiving the

license in 1996 to operate GSM cellular phone services in Bangladesh. This venture has

contributed both the companies the advantage of risk diversification. At the same time,

Telekom Malaysia Berhad has gained strong local network through A. K. Khan & Co. Ltd.,

which is a well-established company based in Chittagong.

• Foreign Knowledge Generation in the Company:

The top-level management of TM International (Bangladesh) Ltd., by and large, consists of

foreign personalities. Most of the departmental heads are from Malaysia, India, Australia,

and Sri-Lanka. Because of this mix and match of local and foreign expertise in the company,

there is a blend of knowledge. Moreover, the generation of foreign knowledge in the

company has enabled the company to compete internationally.

• Operation in an Aggressive Market:

Currently, there are four major players operating in Bangladeshi market: Grameen Phone(GP), AKTEL, CityCell and Banglalink. All of these companies have foreign alliance and they

are highly competitive. To keep pace in this extremely aggressive rivalry, AKTEL has

adopted an offensive marketing strategy. Operating in such a market and adopting such

strategies have given the company an internal competitiveness, which in turn has allowed

TMIB to operate in foreign market with giant foreign competitors.

• Strong Brand Image:

TM International (Bangladesh) Ltd. commenced its journey with the brand “AKTEL” in1997 as the 2nd GSM operator in Bangladesh. Since its inception, AKTEL has established

itself into a popular name among the community. Being one of the pioneers, AKTEL has a

strong brand image in Bangladesh and people recognize the name instantaneously. This

recognition has given the company an added advantage, as TMIB is operating in a very

competitive market.




• Skilled Human Resource:

Because of its attractive incentive packages and strong brand image in the job-market,

skilled workforces have grown an interest towards TMIB. This has given the company an

extra benefit, as the company can recruit the finest from the pool of employees.

Furthermore, TMIB frequently recruits young, enthusiastic, and resourceful employees

from reputed academic institutions. It also provide motivation among its employees by

offering extra inducements such as: awarding gold medals to best employees of the year,

organizing entertainment programs, providing transportation facility etc. These extra

services have enhanced employees’ motivation-level and loyalty.

• Non-Political Work Environment:

The work-environment of TMIB is very friendly and co-operative. The practice of internal

politics is completely absent and there is an orderly co-ordination among the departments.

As most of the employees belong to the same age group, there is a harmonization in the

organization.

• Collaboration with Diverse Companies:

TMIB has alliance with diverse companies to support its service offerings. For an example,

recently, the company has launched a club-membership facility for its post-paid

subscribers, named “Club Magnate”. To offer this club-membership, TMIB has collaborated

with different companies such as Agora, Malaysia Airlines, Hotel Seagull etc. In a similar

manner, TMIB has partnerships with Cineplex, BDJobs, Deshimobile, Fantasy Kingdom

etc. These collaborations have contributed the company in cost-efficiency and superior

service-offerings.

• Collaboration with Financial Institutions:

Apart from having collaboration with diverse companies, TMIB also has collaboration with

a number of financial institutions. For example, TMIB has affiliations with HSBC and

Standard Chartered Bank for billing and salary purposes. It also has collaboration with EBL

and other banks. Because of maintaining an excellent relationship with these financial

institutions, TMIB will get the privilege while taking loans or any type of financial services

from these institutions.




• Unique Service Offers:

TMIB has a well-known reputation of being “The First Ever” in the country. It has always

tried to bring something new and exceptional in the market. There are countless services, which are brought by TMIB under AKTEL brand. Some of the outstanding services are: E-

Fill, Pulse offer, GPRS (Mobile Internet), Greeting Messages (FunDose), Buy 1 get 1 Free

offers etc. By providing distinct services, TMIB has achieved the status of “Fast Mover”.

• Customer Care Centers:

TMIB has established several customer care centers in major points of Dhaka city, such as

Gulshan-1, Gulshan-2, Dhanmondi, Motijheel etc. Moreover, it has set up customer care

centers in major districts of the country such as Comilla, Chittagong, Sylhet and Khulna.There are 11 customer care centers in total and these centers have allowed the subscribers to

get free services even staying in remote places of the country.

• Friendly Corporate Culture:

The corporate culture of TMIB is famous for being friendly and positive. The company has a

“Thursday dress-code” for the employees. It also assembles money from every employee to

have tea-break snacks. There is a pleasing synchronization among the staffs, which has built

a positive corporate culture.

• Societal Marketing:

TMIB regularly takes part in charity functions and is renowned for donating money in

different deprived institutions around the country. The company has already donated

money, free-books, free-medicines, and free-SIM cards in various schools, madrasas, and

hospitals. It is also involved in societal marketing advertising. Recently the slogan campaign

of TMIB supporting the autistic children has attracted huge attention.

2.10.2. Weaknesses:

• Poor Work Division Structure:

The departmental structure of TMIB is not precise and well thought-out. Each department

contains several units. However, the units are not separated by well-defined boundaries and




it is very difficult to distinguish among them. The employees do not have any specific ID to

track them separately department-wise.

•

Lack of Employees:The departments of TMIB do not have sufficient work force to carry on a thorough task.

Most of the employees in each unit are loaded with several duties and sometimes it becomes

a burden on their shoulders. Lack of employees in each department is an obvious problem

of the company.

• High Fixed Cost:

Telecommunication industry has a high level of fixed cost. TMIB, operating in this industry,

also faces such disadvantages. Office rent, network tower maintenance cost, operationalcost etc are the fixed costs of the company. These fixed costs do not allow the company to

gain the advantage of economies of scale, which is essential for the company to perform well

financially. Because of high fixed cost and low economies of scale, the company also has a

low re-investment rate.

• High Employee Turn Over Rate:

As there are four major players operating in the market, it is apparent that each company

will try to draw employees from other companies by offering better incentive-packages. Thispractice has created a high employee turn over rate in TMIB. Every year, lots of competent

workers leave the company to join other companies. This has created a major crisis, as

TMIB cannot implement any effective long-term strategy.

• Poor Network Coverage in Rural Areas:

Presently, TMIB has network coverage in 61 districts. However, most of the upazilas of

these districts do not have the coverage. Therefore, despite covering 61 main districts of the

country, AKTEL users in rural areas do not get the frequency. This has created adisappointment among the subscriber and hence it is a drawback of TMIB.

• Poor Recruitment Policy:

Though TMIB attracts skilled workers from renowned academic institutions all over the

country, because of its poor recruitment policy, many undesired employees are hired over




desired ones. Sometimes people with objectionable background are hired and sometimes,

right people are not hired in right positions. Thus it creates a risk of wasting talents in the

company.

• Shortages of Equipment Supports:

Many departments in TMIB do not have sufficient equipment support such as: Fax

machines, printers, scanners etc. Lack of proper equipments in departments has created

work constraint.

• Dealer Insufficiency:

TMIB has only 4 authorized dealers and 1 distributor, which is very insufficient for a

company covering network in 61 districts. As a result of inadequate number of dealers anddistributors, there is high possibility of Gray Marketing. If the SIMs or cards of TMIB pass

on the hands of unauthorized dealers, it would be very difficult for the company to maintain

a consistency in price and quality.

2.10.3. Opportunities:

• Incapable Public Sector:

The public sector in Bangladesh is not capable of meeting the market demand of

prospective phone users. In addition, the lengthy and bureaucratic process of public officeshas discouraged people to use T&T and public mobile phone (TeleTalk). For these

inconvenience systems, people in our country have adopted private mobile phone services

as an alternative. This is a great opportunity for TMIB to grab this huge market of

prospective phone users.

• Growing Population Income:

According to World Bank source, the disposable income of people in Bangladesh is

increasing every year. In addition, Bangladeshi market has high mobile phone acceptability.Both the factors are fostering the fact that, Bangladeshis is a potential market for mobile

phone companies. Operating in such a market is a lucrative opportunity for TMIB.

• Business Diversification Opportunity:




Operating in telecommunication industry has given TMIB with the opportunity of business

diversification in related sectors. Having the expertise in telecommunication field for a long

time, TMIB can expand its business in mobile phone set business, mobile phone battery

business etc.

• Easy Entrance to Foreign Market:

TMIB has joint venture with a prominent Malaysian telecom company, Telekom Malaysia

Berhad. At the same time, operating in an aggressive market has enabled the company to

become very competitive. These attributes have permitted the company to have an easy

access to foreign market and compete with foreign rivals.

•

Easy Loan Access: As discussed before, TMIB has collaboration with a number of financial institutions

regarding billing and wage-payment purposes. This has allowed the company to have a good

relationship with the institutions. TMIB can take advantage of these collaborations and can

have easy access to loans and other financial matters.

• Full-fledged GPRS Package:

TMIB has already brought GPRS (General Package of Radio Service) in Bangladesh.

However, the service is in its initial stage. Since no other company has brought a completeGPRS package, TMIB can take this advantage and bring a full-fledged GPRS package. GPRS

is a completely new technology in our country and it is obvious that the package will be a

hot cake in the market.

• New Strategic Alliances:

Strategic alliance in telecommunication industry is not a new phenomenon. All the four

operators in Bangladesh have strategic alliances with several foreign companies. TMIB can

form new alliances with eminent companies of different countries to achieve higher

competitiveness and bring more expertise inside the company.

• Network Coverage Expansion:

TMIB has already network coverage in 61 districts. However, most of the upazilas and rural

areas of these districts are not under the coverage. In this circumstance, to increase the

coverage in remote areas, TMIB can utilize its already established towers. Otherwise, they




can set up new towers. Establishing new towers will not be a barrier for TMIB, as the

company can form collaborations with Grameen Phone or other operators who already have

towers in those areas.

2.10.4. Threats:

• Widest Coverage of Grameen Phone:

Grameen phone (GP) has network coverage in 61 districts as TMIB. Yet GP’s coverage is

better than TMIB’s coverage, as GP covers all upazilas and rural areas. On the other hand,

TMIB provides network only in the city areas. Because of the availability of network in

distant places and good frequency, GP has a superior brand image to people. This is of

course a threat to TMIB.

• Political Instability and Natural Calamity:

Bangladesh is called “red-zone” in terms of political risks. The instability of administration

has resulted in unstable regulations. With the change of governments, regulations also

change from season to season. This volatility has hindered TMIB from making a long-term

effective strategy. At the same time, the country also has a high natural calamity tendency.

Natural catastrophes damage the network towers situated in different districts of the

country.

• Recession in the Economy:

Mobile phone is still considered as a “luxury” in Bangladesh rather than a necessity. Being

one of the poorest nations in the world, the risk of recession in Bangladesh is very high and

frequent. During the recessions, people are reluctant to invest behind luxury items such as

mobile phones. This is a huge obstacle for TMIB to reach all population sectors in the

country.

• Non-cooperative Telecommunication Regulatory Body:

The regulatory bodies in the telecommunication ministry are unfair and biased. Plus, the

system itself is bureaucratic and lengthy in Bangladesh. Because of their non-cooperative

attitude and injustice, the usual work-pace of TMIB is slowing down. This is of course a risk

to the company.




• Customer Resistance against Tariff:

Any new tariff or VAT is always a controversial issue to the people of our country. People in

Bangladesh are reluctant to accept new tariffs and it takes a long time for them to approveit. In the recent budget, the government has imposed a tax of TK.900 on every SIM card,

which has created a huge debate and protest among customers. Many of the customers have

stopped buying SIM cards. This tax has also hindered the mobile operators to maintain a

constant price level and to offer attractive packages.

• Existing Competitors in the Market:

At present, there are four private and one public mobile phone operators operating in the

Bangladeshi market. All of the private operators are aligned with foreign companies. Thesecompanies are following aggressive marketing strategy and the level of rivalry in the

industry is very high. The companies are trying to bring new and attractive offers every

week at a striking price level. This high intensity of competition in the industry is a major

threat to TMIB, as TMIB has to survive this fast paced competition.

• Upcoming Competitors in the Market:

Besides the existing competitors, new and large competitors are also trying to enter the

Bangladeshi market. Some of these companies are Reliance, Tata etc. These new companies will increase the rivalry level in the industry.

• Private T&T Phone Companies:

Apart from the new and existing mobile phone operators, competition is also expected from

private T&T phone companies. Because of the inadequacy of the public T&T Company,

many private companies are coming in the market. These companies are also a threat to

TMIB, as they offer similar services at a lower price to customers.

• Possible Health Risk from Mobile Phone:

Recently, a scientific study has shown that there is high risk of health hazard including

brain tumor and cancer from the usage of mobile phone. The study concluded that long

time use of mobile phone might cause such diseases and so people should reduce their use




of mobile phone. Though there is no solid evidence of this fact, it has created an argument

and panic among mobile phone users. This is naturally a threat to TMIB.

2.11. Legal Issues & Problems Faced by AKTEL:The Legal issues and problems faced by AKTEL are not indifferent from other mobile

companies in the industry. The companies more or less face alike problems. The legal issues,

procedures and problems are discussed below.

2.11.1. Licensing:

By paying some fixed amount of fees one can get the license. But the companies need to pay

tariff on monthly basis. There is a clause in the license that for every handset tk.1, 100/ yearly

loyalty needs to be paid. The customers are reluctant to pay this, so are the mobile operators.Both of the parties are not paying the loyalty fees and government did not even cancel the

clause. So huge amount of money is due by the companies to government.

2.11.2. Reduction in tariff rate:

Government pressurizes mobile companies to reduce the tariff rate. Yearly, the companies

need to verify with the government regarding the tariff rate. The government makes sure the

companies provide standard services to the customers.

2.11.3. VAT :

All mobile companies need to pay 15% VAT. This is a sector where the government does not

have any investment while enjoying the revenue. This is unique to Bangladesh. Users are

paying the 15% VAT which they do not want to pay.

2.11.4. TAX:

Every year companies pay large amount of taxes. The companies need to pay taxes even for

the equipments they purchase. Recently, the government has imposed a sales tax of Tk. 900

on the purchase of each SIM card. A survey has been conducted to assess the impact of the

introduction of the new tax, which shows that the growth of new subscribers dropped by two

to seven per cent in June 2005. During June, only 76000 new clients were added.




2.11.5. Inter-operator Problems:

Inter-operator problems came into being when different mobile companies came into the

market. When there was GP and AKTEL in the market, both of the companies faced problem while doing business. There was a lack of infrastructure in the industry. Problems aroused in

the field of inter-operator connectivity. At that time “Sender Keep All (SKA)” was in practice.

As long as there were equal amount of traffic there were no problem. But there was a time

when, more tariff congestion came from AKTEL. GP asked AKTEL to share the profit. As

AKTEL denied, GP started to block the calls coming from AKTEL. It created unnecessary

system overload. In order to put an end to the problem AKTEL agreed to share the profit thus

“call termination peak/off-peak” was introduced. And equilibrium prevailed in the market.

2.12 Recommendations:

Though TMIB (AKTEL) is a well-established company in Bangladesh and running

successfully in the domestic market, it has a handful of internal weaknesses. Together with

those weaknesses, the company is facing numerous threats. TMIB has already identified

some of the major weaknesses and is trying to recover from them. However, there are some

unidentified, neglected areas, for which it has not taken any effective measures yet.

Therefore, the company needs to focus on the following recommendations by adopting better

strategies:

• TMIB should develop a well-structured work division by separating the departments and

units by a well-defined boundary and assigning specific tasks to each unit. The

employees should carry distinct ID cards so that they are identified unit-wise.

• The company should recruit more employees in each department as it is lacking

adequate workforce. Thus, the burden on the shoulders of the employees would be

lessened.

• The company should try to achieve economies of scale by lowering its fixed costs or

escalating revenue to build entry barrier in the industry for the new competitors.




• The company should reduce its employee turnover rate by offering high incentives and

attractive salary packages, which is crucial for the company to survive in this high

competitive industry.

•

Though TMIB has network coverage in 61 districts, most of the upazilas are not covered.Therefore, the company should try to cover its network in all the important upazilas of

each district as like GrameenPhone to increase its subscriber base.

• The recruitment policy in TMIB is not satisfactory. The HR department of the company

should be extra cautious while hiring the right employees in the right place.

• The company is facing equipment shortage in every department, which is of course an

obstacle for the employees. The company should bring necessary equipments such as

FAX machine, scanners, printers etc for each unit.

• Because of the insufficiency of authorized dealers, the company is facing the threat of

gray marketing. TMIB should employ more authorized dealers in order to prevent gray

marketing.

• TMIB should offer installment system for buying SIM cards, because of the recent VAT

of Tk. 900 on each SIM purchase. Many potential customers are reluctant to buy mobile

phone lines because of the high cost involved in it. By offering an installment system,

these customers would be encouraged to purchase SIM cards.

Nonetheless, even after confronting such risks and having internal weaknesses, TMIB has

maintained its dominance in the industry. The company has achieved many competencies

through its operation since 1997 and is trying to recover from its weak points. Though other

operators are trying their best to beat “AKTEL”, TMIB is still ruling the industry with the

promise of being “Clearly Ahead ”.


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