Ib Pakistan Final

8/9/2019 Ib Pakistan Final

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International Business Project

Mobile Handset Production In Pakistan

Compiled by:

Jasveen kaur

Roll no: 823

Infinity business school


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Executive Summary

This report gives useful insight to the complete strategy that includes marketing,financial and human resource and other dimensions of the production of mobile phone

handsets in Pakistan. Business protocol is different in Pakistan, as compared to business

protocol in the other countries. Pakistan has significantly improved the lives of many of its

people and has achieved steady economic growth. However, a third of Pakistans population

remains entrenched in poverty. According to World Bank report in 2006, women are at a

particular disadvantage, with lower literacy and school enrollment rates than men, and less

access to health care. It should also be noted that most of Pakistanis are Muslims, and

Pakistan is a male-dominated society.

Additionally, the Islamic extremism in Pakistan, growing in power and influence, has

found a new target: western countries. The extremists in Pakistan and their leaders are

targeting the U.S government and other developed countries, its citizens as well as members

of minority indigenous and religious groups.

Mobile manufacturing industry in Pakistan:

During 2005-06 the total value of handsets imported in the country crossed US$1 billion The

mobile handset market is projected to grow by 25 percent annually About 800,000 handsets

are imported every month There are about 15000 cell phone retailers Four major players

dominate Mobile Phone Handsets market: Nokia leading with 55 percent, Sony Ericsson 22

percent, Samsung 17 percent and Motorola 5 percent.

Government is negotiating with Chinese companies to set up manufacturing plants for cell-

phone sets in Pakistan. Also a telecom research and development center and a plant is

proposed to be set up to manufacture and assemble mobile handsets in the country.

Pakistan is a strategic location as a regional hub. It is a principal gateway to the Central Asia

Republics and has strong and long-standing links with the Middle East and South Asia.

Pakistan has on average been among the faster growing economies in the developing world,

and has great potential for long term investment.


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Pakistan is a resource-rich country, and has strong human resources. It also has abundant

land and natural resources that include extensive agricultural land crop production, mineral

reserves (coal, crude oil, natural gas, copper, iron ore, gypsum, etc.), fisheries and livestock

production. English is an official language, and is widely used in government. An English

speaking work force, cost-effective managers and technical workers are good advantages to

do business in Pakistan.

All the handset companies are earning millions of dollars from Pakistani market but no one is

ready to set up a manufacturing plant in Pakistan. They are just opening sale points to push

Pakistan towards a consumer market. But the PTA and the government of Pakistan made a

strategic mistake by not encouraging mobile phone manufacturers for investments in this

country.

Pakistani government in the past few years has tried - unsuccessfully - to get a foreign

manufacturer to come to Pakistan to build handsets. The discouraging factors include the

chronic dismal conditions of energy, infrastructure and security. The only hope for this time

is that Chinese companies such as China Mobile and Huawei have a big stake in Pakistan.

The investment for these large companies is not that big and they can earn a lot of goodwill

and PR from setting up a phone manufacturing facility. A cheap phone and SIM combination

could be too much to resist for some!


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BACKGROUND TO PARTITION

The concept of a separate Muslim "nation" or "people," qaum, is inherent in Islam, but this

concept bears no resemblance to a territorial entity. The proposal for a Muslim state in India

was first enunciated in 1930 by the poet-philosopher Muhammad Iqbal, who suggested that

the four northwestern provinces (Sindh, Balochistan, Punjab, and the North-West Frontier

Province) should be joined in such a state.

BIRTH OF A NEW STATE

Pakistan came into existence as a dominion within the Commonwealth in August 1947, with

Jinnah as governor-general and Liaquat Ali Khan as prime minister. With West and East

Pakistan separated by more than 1,000 miles of Indian territory and with the major portion of

the wealth and resources of the British heritage passing to India. Of all the well-organized

provinces of British India, only the comparatively backward areas of Sindh, Balochistan, and

the North-West Frontier came to Pakistan intact. The Punjab and Bengal were divided, and

Kashmir became disputed territory.

Economically, the situation seemed almost hopeless; the new frontier cut off Pakistani raw

materials from the Indian factories, disrupting industry, commerce, and agriculture. The

partition and the movement of refugees were accompanied by terrible massacres for which

both communities were responsible. India remained openly unfriendly; its economic

superiority expressed itself in a virtual blockade. The dispute over Kashmir brought the two

countries to the verge of war; and India's command of the headworks controlling the water

supplies to Pakistan's eastern canal colonies gave it an additional economic weapon. The

resulting friction, by obstructing the process of sharing the assets inherited from the British

raj, further handicapped Pakistan.

ISLAMIC REPUBLIC OF PAKISTAN

Mohammed Ali Jinnah died in September 1948, within 13 months of independence. The

leaders of the new Pakistan were mainly lawyers with a strong commitment to parliamentary

government. They had supported Jinnah in his struggle against the Congress not so much

because they desired an Islamic state but because they had come to regard the Congress as

synonymous with Hindu domination. They had various degrees of personal commitment to


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Islam. To some it represented an ethic that might (or might not) be the basis of personal

behaviour within a modern, democratic state. To others it represented a tradition, the

framework within which their forefathers had ruled India. But there were also groups that

subscribed to Islam as a total way of life, and these people were said to wish to establish

Pakistan as a theocracy (a term they repudiated).

CURRENT ECONOMY OVERVIEW

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal

political disputes, low levels of foreign investment, and declining exports of manufactures.

Faced with untenable budgetary deficits, high inflation, and hemorrhaging foreign exchange

reserves, the government agreed to an International Monetary Fund Standby Arrangement inNovember 2008. Between 2004-07, GDP growth in the 6-8% range was spurred by gains in

the industrial and service sectors, despite severe electricity shortfalls. Poverty levels

decreased by 10% since 2001, and Islamabad steadily raised development spending in recent

years. In 2008 the fiscal deficit - a result of chronically low tax collection and increased

spending - exceeded Islamabad's target of 4% of GDP. Inflation remains the top concern

among the public, jumping from 7.7% in 2007 to 20.8% in 2008, primarily because of rising

world fuel and commodity prices. In addition, the Pakistani rupee has depreciated

significantly as a result of political and economic instability.

The economy of Pakistan is the 27th largest economy in the world in terms of purchasing

power, and the 48th largest in absolute dollar terms. Pakistan's economy mainly encompasses

textiles, chemicals, food processing, agriculture and other industries. The economy has

suffered in the past from decades of internal political disputes, a fast growing population,

mixed levels of foreign investment, and a costly, ongoing confrontation with neighboring

India. However, IMF-approved government policies, bolstered by foreign investment and

renewed access to global markets, have generated solid macroeconomic recovery the last

decade. Substantial macroeconomic reforms since 2000, most notably at privatizing the

banking sector have helped the economy.

GDP growth, spurred by gains in the industrial and service sectors, remained in the 6-8%

range in 2004-06. In 2005, the World Bank named Pakistan the top reformer in its region and

in the top 10 reformers globally. Pakistan's then Prime Minister Shaukat Aziz stated Pakistan


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Pakistan.

LANGUAGE: A common language could create natural understanding to such on extent

that speaker and listener comes together at one cultural level. Among the other regional

languages and dialects Urdu is the language which is spoken and understood throughout

the country. But English is the official language.

HISTORY: Common History creates a sense of belonging to one nation. Pakistan has a

common historical background of almost 1000 years (712-1857 AD) of Muslim rule and

Indus valley civilization (2500 BC).

GEOGRAPHY: Variety of physical contours; it has green fertile plains, hot deserts,

beautiful valleys, snow clad mountains and magnificent coast line. Having a diverse range

of physical features, customs, traditions and habits of the people living in different

regions has provided a rich cultural heritage to Pakistan.

CHARACTERISTICS OF PAKISTANI CULTURE:

ETHNIC DIVERSITY: Immigration from central Asia, Afghanistan, Middle East, Turkey

and Persia over the countries complicated the racial mixture of the country. Pathan,

Balochi, Sindhi and Punjabi are the four major groups of people who are living in

Pakistan. A proportion of the population belongs to Urdu speaking who arrived in

Pakistan at the time of partition from different part of India. There is a unifying sense

of being Pakistani too but regional loyalty is more powerful then the sense of being

Pakistani.

LINGUISTIC DIVERSITY: Over 300 languages and dialects are spoken across Pakistan.

Variety of languages is the main factor dividing the various cultural groups. Main

languages of Pakistan are Sindhi, Punjabi, Balochi, Pashto and Urdu. Urdu is the language,

which is spoken and understood throughout the country. The people of sub-continent

develop it under 1000 years of Muslim rule.

EQUAL EMPLOYMENT OPPORTUNITY AND AFFIRMATIVE ACTION

Equal Employment Opportunity (EEO) prohibits discrimination against anyone on any

pretext. EEO speaks of the equality of every human being (irrespective of gender, religion,

caste, ethnicity, color, age, physical disability etc) while considering a candidate before,


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during and after employment. EEO anti-discrimination protections apply to all of the terms

and conditions of employment, including, but not limited to recruitment and selection,

promotions, testing, training and development opportunities, hiring, transfers, work

assignments, discipline, compensation, discharge, performance evaluation, working

environment and other conditions of service. Affirmative action (AA) is an effort to undo the

unfair practices of the past in the organizations. AA is a means to level the playing field for

females, individuals with disabilities, underprivileged classes and minorities as a logical step

towards equal employment. Pakistani law makes it obligatory for employers to follow EEO

principles. Affirmative Action however is expected to be implemented as a voluntary

component of EEO Policy. EEO does not, in any circumstance, mean that the managers

should hire unqualified candidates in breach of merit. This is only a mechanism to avoid

unfair practices and biases during employment process

IN LAW

Pakistan constitution puts a ban on discrimination on the basis of sex in appointment in "the

service in Pakistan", provided that the performance and functions of the job can be carried

out by, and is deemed suitable for, both sexes. It also provides that "steps shall be taken to

ensure full participation of women in all spheres of national life". The constitution commits

the State to secure the well-being of the people, irrespective of, inter-alia, their sex by raising

their standard of living, by preventing the concentration of wealth and means of production

and distribution in the hands of a few to the detriment of general interest and by ensuring

equitable adjustment of rights between employers and employees, and landlords and tenants.

Pakistan is a signatory of various international instrument.

On 30 April 2000, the federal government announced its Labor Welfare Package for Workersmaking it obligatory for the organizations to offer gender equality and affirmative action. In

summary, it warrants:

Equal remuneration for men and women for work of equal value through appropriate

legislation.

Enhancement of maternity benefits for female mine workers.

Safeguards against sexual harassment through appropriate actions.


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Recruitment of female labor inspectors for enforcement of labor laws on female

workers.

Increase in percentage of reserved seats of workers and peasants at Union Councils,

Tehsil Councils and District Councils in the Devolution of Power Plan.

Extension of coverage of laws to agriculture and other informal sectors of economy.

The Federal Government introduced new labor policy in 2002 empowering labor courts to

order re-instatement of illegally dismissed workers or award reasonable compensation in lieu

of re-instatement. This policy also calls for extension and upgradation of vocational and

industrial training programs to meet the changes of globalization and avoidance of

redundancies. If implemented in true spirit, this is expected to be a right step towards

affirmative action and equal employment opportunity. A significant characteristic of new

labor policy is strengthening bilateralism with least legislative and state intervention. This is

expected to result in good employer-employee relationship through the strategy of

interdependence by employers and employees and their mutual trust. New laws also promise

protection of contractual labor by redefining temporary jobs in accordance with international

standards. The policy pledges equal opportunities for all and categorically bans child and

bonded labor, and discrimination on the basis of gender, sex, race etc.

There are other recent steps taken by the Pakistan Government that have improved the

recruitment environment in Pakistan, like: National Policy and Plan of Action for Elimination

of Child Labor (2000); National Policy and Plan of Action for the Abolition of Bonded Labor

(2001); and endorsement of ILO Conventions 100 and 182.

Federal and provincial governments have also made legislations about the provision of 2%

quota for special (disabled) people in the employment in all departments. This was enacted

by the Disabled Persons (Employment and Rehabilitation) Ordinance 1981.

IN PRACTICE

Contrary to the federal laws, Pakistani organizations in practice do not offer equal

employment opportunities to the candidates and there are instances of discrimination against

candidates on the basis of gender, religion, ethnic origin etc. Since the literacy rate in females

is less than males, there is only a limited female presence in the organizations and it is not

deemed viable or safe for a female to be employed in a predominantly male set-up. This


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situation is nonetheless on the change in the organizations in the big cities where females can

in general work better than males, for example in the education sector, textile designing and

interior decorations industry.

Even if the EO principles are observed in an organization, the so-called jargons of

''circumstances'' and ''acceptability'' are used as a cover for inappropriate discrimination. This

unfairness is practiced during short listing of applications as well as in interviews. The short

listing prejudices have also been observed in the federal and provincial government jobs to be

filled through Public Service Commission.

EO in Pakistan is not a mere implementation issue, but is also faced with the challenge of

better understanding and education at the institutional level. The decision makers need to beeducated that EO is just not a human rights issue, and the relationship between organization

procedures and the individual cognitive is bilateral. Current EO crisis in the country has its

implication both for the employers and the recruits and at a wider scale the whole economic

level. With financial and productivity targets as the top most priority, a typical Pakistani

employer fails to understand that EO implementation can be to his own advantage as it will

improve the quality of recruitment and selection in his organization that will contribute to

cost effective decision making.

The managements refusal to follow EO principles is incurring extensive cost, as it is also

rending organizations inadequate to compete in an increasingly global market. This has

resulted in the absence of a proactive response to the need for a quality staff that will promise

competitiveness through quality production. HR is a complex field and ambiguity and

ambivalence persist at each stage of evolution and progress towards an equitable and

effective management of human resources. Our study of HR evolution in Pakistani

organizations suggest that, ironically and precariously, the promotion of objective recruitment

and selection on merit is resorting, for credibility, to being implemented within the traditional

recruiters agenda of conceptualization. This is more like eyewash than a sincere effort to

practice EO.

The whole system of performance management or appraisal is missing in the majority of

organizations. Even in the public sector where it is a legal requirement, superior officers try

to avoid or delay writing ACRs (Annual Confidential Reports) of their subordinates as far as

possible. This deprives the eligible employees to be considered for promotion or increment


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and leaves decisions on discretion instead of systems thus causing a violation of EEO

principles.

In some organizations, workers are not allowed to complete their consecutive three months in

service, and are replaced with the new workers; or they are re-employed after a break of a

few days or weeks. This is done in order to avert legally automatic confirmation of a worker

in service after three months of continuous employment. Job security is a far cry for

employees at the lower echelons. The legal mechanism has not proven effective for the

individual pleas in the past and more than 95% of the cases of violation of employees rights

by the employers are not reported in a court of law. Apart from being unable to afford the

court and lawyer fee and to sacrifice ones breadwinning time, this is also due to lack of

general awareness in the recruits about their rights and privileges under law. This is a

practical dilemma that HR in Pakistan faces in the absence of a merit based recruitment

policy, and the recruitment made on gut and objectivity based discretion.

DISCRETION IN SELECTION

Merit, unfortunately, does not come at the top while considering a candidate for employment.

Most of the jobs are filled through personal connections of the candidates within the

organization (Sifarish) thus compromising the quality of recruitment. Pakistan is a high

context society and tribal and ethnic fraternities among people are influential enough to

weaken the system of merit in recruitment. Another interesting factor to secure a job is the

Alumni network of certain institutes. For example, in Karachi, an informal but very

influential network of graduates of IBA (Institute of Business Administration) is in operation

that tends to prioritize graduates of this institute for employment. Similarly alumni networks

of LUMS and the Punjab University are operating in Lahore.

There is a tendency in the line managers requesting for an employee is to use a mix of gut

and objectivity to select a suitable employee. Interestingly both of these terms are self-

contradictory. Conventionally the line managers are not ready to accept the idea that a

systematic and scientific procedure is more reliable to help them find a suitable staff member.

They normally act in order to judge a candidate by evaluating his fitness in the so-called

organizational culture and the corporate strategy. They term the formal and standard HR

selection and recruitment practices as bureaucratic, clerical and a waste of paper and time.

Subsequently EO is not one of their priorities. Line managers tend to outsource or recruit


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people with the informal sources of recruitment; for example: word of mouth, or through

direct contact and bargaining with the recruit working somewhere else. This results in

autonomy and unaccountability of their choice over a more eligible candidate. Ironically

these line managers are apple of the chief executives eyes because of their core production

services for the organization. Their opinion is prioritized by the decision makers to that of the

welfare oriented human resource department. This relegates the HR advisors and staff to a

peripheral position in the organization and their role is contained to little or no authority. This

would not be out of place to mention here (as has been the experience in some major

organizations in the West) if the line managers assume the responsibility of equal

employment principles in letter and spirit, then the devolution of hiring authority from HR to

the line departments can be acceptable. But this is not the current situation in Pakistan where

even the staff working in Personnel or HR is not suitably educated or trained about EEO

issues, and to expect this from line managers would be unrealistic.

Another major EEO issue in Pakistan is the recruitment of a huge workforce on political basis

in violation of merit. Instead of creating jobs, successive governments have been acting as

employment exchanges to provide jobs to their political activists and supporters.

We would like to cite a few examples in this regard. In 2002, the provincial government in

Punjab announced to put five thousand posts in education and health sectors at the disposal of

the members of provincial assemblies to be filled on their recommendations. This decision

was termed as the last nail in the coffin of recruitment through merit. This has been feared

that such practice will ratify political recruitment as a norm rather than an exception. Another

challenge is the need to provide a better compensation packages to public sector employees in

the form of fixed package and not discretionary funds or privileges that are often misused.

MOBILE HANDSET PRODUCTION IN PAKISTAN

Pakistan mobile phone handset market is expanding with every passing year and during

2005-06 the total value of handsets imported in the country crossed US$1 billion and

forecasted growth in this import is 25 percent annually.

Sources in the Pakistan Telecommunication Authority (PTA) said that there are 12 to 15

thousands mobile phone shops across the country and they generate huge employment


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opportunities. According to them about 60,000 people directly and indirectly are employing

in this sector.

According to estimates provided by local resellers of the mobile phone handsets, the number

of handsets imported currently at around 750,000 and 800,000 per month. Advanced

technology and sophisticated sets are now commonly available in the local market and

handsets with camera and music are now becoming very popular and this trend looks to grow

in the next two years as these features will become standard in the future, they said.

Four major players dominate Mobile Phone Handsets market, Nokia leading with 55 percent,

Sony Ericsson 22 percent, Samsung 17 percent and Motorola 5 percent.

Also, due to the increasing trend of import of handsets through proper channel, the reduction

is observed in availability of smuggled sets. The price of handsets is one of the most

important factors for mobile growth. This is especially true for rural markets which are the

next stage of competition. It is also an important factor for 3G and next generation

technologies to take hold in emerging markets. If people can afford phones with more than

voice capabilities they are more likely to try out these value-added services.

The drastic change in the telecom industry and entry of five active cellular companies in the

country has helped in continuous increase in cellular subscribers in the last few years.

At present, cellular phone subscribers are above 90 million in the country and with increasing

demand of cellular phones a huge quantity is imported, which includes Nokia, Samsung, LG,

Sony Ericsson and a variety of Chinese mobile sets.

With increasing mobile phone demand in the country, The News talked to two leading mobile

phone manufacturers which have the highest market share in Pakistan ie Nokia and Samsung

and asked if the companies are interested in locally manufacturing mobile handsets.

However, both the companies have no plans to set up a manufacturing plant in the country as

they say their already existing plants are fulfilling the demand. According to the Samsung

head in Pakistan, Samsung being the most proactive and innovative company on a global

scale has swiftly progressed in Pakistan. Samsung mobiles enjoy a 23 per cent market share

in the cellular phone industry of Pakistan.

On the other hand Nokia said that Nokias global market share stands around 40 per cent.

Nokia phones are imported into Pakistan through partners United Mobile, Advance Telecom

and I2. We do not import many accessories in Pakistan yet. Samsung has 23 production


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bases, spread all over the world with over 42 sales subsidiaries strategically located in various

countries. Moreover, Samsung operates 26 R&D Centres, located in developed and advanced

surroundings, where newer and better technologies, processes and products are sought

constantly.

Currently, the manufacturing plants of Samsung located across the continent of Asia have

been fulfilling the Pakistans fast growing market very conveniently, efficiently, and cost-

effectively.

The day is not far when Samsung begins to consider a progressive production process within

Pakistan, ensuring world-class quality production and innovations within the country. Owing

to the rapid development of the Pakistan market over the past two decades, Samsung may be

prompted to establish domestic production plants.

However, it would depend upon further market growth, abundant availability of specialized

human resources and facilitation from the Government in terms of securing the local

production. Further enhancements in technological infrastructure along with frequent

exchange & training of specialized cellular engineers, in a safe and secured industrial

environment is needed. The export potential and market volume also needs to be evaluated

before such an advanced industrial undertaking is initiated by Samsung.

Nokia Head in Pakistan said that Nokia has its Headquartered in Finland, Nokia is a truly

global company with strong strategic presence at key locations. Nokia has an established

global production base, which comprises of nine mobile devices and technology production

units in: Brazil, China, Finland, Great Britain, Hungary, India, Mexico, Romania and South

Korea.

He added: we work on an optimized capacity model rather than a country to country model,

the 9 plants that we have are already fulfilling the global demand. For this reason, at the

moment we feel no need to establish a new plant.

Currently, we have no such plans. Our investments in Pakistan are in the form of care centre

networks, marketing, brand building activities, CSR activities, offices and people. There are

no hurdles in establishing a manufacturing site. Just that, theres no need to set up a new

production unit at the moment as per our global strategy.


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The President called upon ZTE to develop technical skills of the local labor force.

The five member delegation that called on the President was led by Luo Pingfan, Dy

Chairman ZTE and also included Luo Zhaohui, Ambassador of China.M. Salman Faruqi,

Secretary General to the President, Kamal Majidullah, Special Assistant to PM on Water

Resources, Khalil Ahmad, Ambassador at Large and senior official of the foreign office also

attended the meeting. The President said that Chinese investment and cooperation could help

develop Pakistan as regional hub for manufacturing for which low cost labour force was

available in Pakistan. He also called upon the ZTE to develop a research and development

center in telecommunication and a plant for manufacture of mobile handsets in Pakistan.

President Zardari said that he was keenly awaiting his visit to China later this month tofurther consolidate the relations between the two countries which he said was an important

factor for peace and stability in the region and the world .

The President underscored the importance of closer collaboration and coordination between

Pakistan and China in view of complexities of regional and global situation. He said that

Pakistan would continue to support China on all issues of national importance to it.

The Chinese delegation thanked the President of Pakistan and the government for providing it

necessary back up and support to carry out its investment plan in Pakistan.

MAJOR COMPETITOR:

According to a report issued by Pakistan Telecommunication Authority (PTA), the

teledensity in Pakistan till November 2009 was observed 62.9%. The statistics show that the

growth in the telecommunication sector is making a notable contribution in the countrys

economy. The current Gross Domestic Product (GDP) of Pakistan is worth US$168 billion

and 0.27 % of the worlds economy1. The telecom sectors share in the GDP growth on an

average is about 2 % 2 that means the growth of telecommunication industry promises of the

constant economic development.

There are many mobile phone manufacturing companies and telecommunication service

providers operating nationwide. Nokia, Samsung, LG, Motorola are amongst some of the

multinational cellular phone manufacturing companies that are leading in the local market as


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well. They have made numerous investments in multiple aspects in Pakistans

telecommunication sector.

The Foreign Direct Investment (FDI) in Pakistan was declined by 31.2 % in the year 2008-

2009. The Foreign Direct Investment in the telecommunication sector in this year is declined

by 43.3% and reached to US$ 815 million. If we examine the track record of the foreign

investments in the sector, we would come to know that there was a continuous decline in

numbers as the overall FDI fell from US$ 5,410 million in the year 2007-2008 to US$ 3,720

million in 2008-20093. This unremitting decline in the foreign investment particularly in the

telecom sector has given rise to some serious concerns for the economists of the country.

Amongst various factors responsible for the constant decline in the foreign investments of thecountry, a mounting trend of Chinese knockoffs of the branded phones could be a cause of

deteriorated situation. As these Chinese knockoffs offer somewhat similar appearances as that

of original branded phones in cheapest price, people are more fascinated in keeping a Chinese

copy of high-end phone with them. The availability of China mobile phones in cheap prices is

a consequence of an organized smuggling which is supported by the various local bodies.

If we look at the bigger picture of Smuggling Mafia of mobile phones that is involved in the

whole activity, we would come across with some more interesting faces of crime. The old

smuggled mobile phones are being sold at the prices equal to that of new ones in the market.

According to the sources the old mobile phones are being sold to the innocent customers

openly in various electronics market in the city. The casing and keypad of such phones are

changed and the phone battery is replaced by a china battery after proper servicing in such a

way that a common person can not be able to distinguish the old phone among different

mobile phones. There is software available to change the talk timer of the phone to zero in

order to remove every possible clue of the crime.

The illegal smuggling of mobile phones is not only threatening for the law enforcement

bodies but also imposing a great challenge for the countrys economy as this attempt is

discouraging the legal import of the original mobile phones.

Furthermore cheap Chinese cell phones may be a great hurdle for the law enforcement

agencies as these phones facilitate the criminals and terrorists because they lack an

identification number to trace calls. International Mobile Equipment Identity (IMEI) number


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sectors contribution to national exchequer rose to Rs. 112 billion in 2008-2009 compared to

Rs. 111 billion in the year 2007-2008.

If we analyze the tax contribution made by the China mobile business, it is surprising to

know that there is no proper procedure being followed to ensure the payment of sales tax on

single Chinese mobile phones sale. The facts point out that the Chinese mobile phone

business is not making any significant contribution to the economy. On contrary the legal

import of the branded mobile phones facilitates the economy and their expanding business in

making a distinctive contribution in increasing the countrys GDP.

Due to their adverse affects on the economic development, our neighbouring country India

has already banned the sale of Chinese phones. The government of Pakistan particularly theconcerned authorities like PTA and CPLC should take a serious notice to ban the sale of

Chinese mobile phones in the country. The unremitting decline in the foreign investments in

telecom sector is an alarming economic indicator for the countrys economy. This is a high

time when the government and non government bodies should endeavor to eliminate the

factors being responsible for the demise of economy.

SWOT ANALYSIS OF THE TELECOM INDUSTRY OF PAKISTAN

Strengths

Exponential growth.

Skilled Human Resource at low-cost.

Access to Infrastructure - optical network and satellite links.

Favorable policies (to some extent) and regulator.

Strong international brand names.

Weaknesses

Quality of Service.

Low revenue per user (ARPU).

Customer retention.

No clear strategic direction.

Poor organizational structure.

No research and development programs.


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Employee skill inconsistency.

Very low employee morale.

Opportunities

Huge market size.

Local handset manufacturing.

Making technology accessible to all (e.g. broadband).

Adopt latest technologies.

Removal of international trade barriers.

Adopting MVNO.

Threats

Recession in economy.

Inconsistent and adhoc decisions from regulatory authorities.

Political Instability - Security issues.

Adverse shifts in trade policies of government.

Churn in OPEX.

Revenue leakage

Grey traffic


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CONCLUSIONS:

By exploring the country of Pakistan and working conditions in Pakistan five major

conclusions were drawn that are especially relevant to the companys executives, managers,

employees and their families who will be relocating from other countries to Pakistan for the

purpose of setting up business in Pakistan. The conclusions so drawn from the study are the

following:

PAKISTAN IS A RESOURCE-RICH COUNTRY, AND HAS STRONG HUMAN

RESOURCES.

Pakistan has abundant land and natural resources that include extensive agricultural land crop

production, mineral reserves fisheries and livestock production. English is an official

language, and is widely used in government, the officer ranks of the military, and in many

institutions of higher learning. An English speaking work force, cost-effective managers and

technical workers are good advantages to do business in Pakistan.

PAKISTAN HAS LARGE AND GROWING DOMESTIC MARKET.

Pakistan has 165 million consumers with growing incomes and a growing middle-class

moving to sophisticated consumption habits. The population is estimated to grow to over 325

million by 2050 making it the third most populous country in the world. Therefore, it is a

good opportunity to introduce new products and expand the market shares. Pakistan also has

well-established legal systems and infrastructure. That will allow doing business more

effectively.

It is suggested that companies should offer training programs to employees. The first program

should inform employees on how to conduct business transactions and how to interact with

people in Pakistan. A second training program should be set up for executives, managers,

employees and their families to help them adjust to living in Pakistan. Executives and all

employees should be briefed about the religious sensitivity of the people in Pakistan.

Finally, they will learn how to do business in Pakistan and how to develop relationships with

their business partners. They will also find out what is the appropriate protocol and business

customs in Pakistan, how to negotiate, what are the proper business


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[Type text]

PAKISTAN IS A STRATEGIC LOCATION AS A REGIONAL HUB.

Pakistan is a principal gateway to the Central Asia Republics and has strong and long-

standing links with the Middle East and South Asia. Pakistan has on average been among the

faster growing economies in the developing world, and has great potential for long term

investment.

PAKISTAN HAS INCENTIVES FOR FOREIGN INVESTORS.

1Pakistan has the most liberal investment policy in the South Asia region. New incentives and

further liberalization measures include:

Reducing minimum foreign equity from US$ 0.5 million to US$ 0.3 million,

Zero import duties on capital goods, plant and machinery and equipment not mad

locally.

Zero import duties on raw materials used in the production of exports

Also though the results drawn from the study we see revenues coming from cellular

companies have poised, Government of Pakistan should un-turn new possibilities to bring in

the investment into country. Obviously these landmarks cant be achieved in days or weeks,

but the regulator and the government need to follow a strategy that might attract mobile

phone manufacturers to come into Pakistan. For the purpose, they need to

cut import duties and corporate tax rates,

new highways, rail lines, and airports,

and most importantly the sense of security for investors

Free land for mobile manufacturing plants

BIBLIOGRAPHY1


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[Type text]

Search engines:

1. www.Wikipedia.com

2. www.britannica.com

3. www.google.com

Links:

4. http://telecompk.wordpress.com/2006/11/28/mobile-handset-market-

in-pakistan/

5. http://telecompk.net/2007/11/22/pakistan-lucrative-market-for-mobile-

handset-makers/

6. http://zumbeel.net/blog/telecomhype/2009/08/20/pakistan.html

7. http://en.wikipedia.org/wiki/Telecommunications_in_Pakistan

8. WTO website

9.
http://www.wikipedia.com/http://www.britannica.com/http://telecompk.wordpress.com/2006/11/28/mobile-handset-market-in-pakistan/http://telecompk.wordpress.com/2006/11/28/mobile-handset-market-in-pakistan/http://telecompk.net/2007/11/22/pakistan-lucrative-market-for-mobile-handset-makers/http://telecompk.net/2007/11/22/pakistan-lucrative-market-for-mobile-handset-makers/http://en.wikipedia.org/wiki/Telecommunications_in_Pakistanhttp://www.wikipedia.com/http://www.britannica.com/http://telecompk.wordpress.com/2006/11/28/mobile-handset-market-in-pakistan/http://telecompk.wordpress.com/2006/11/28/mobile-handset-market-in-pakistan/http://telecompk.net/2007/11/22/pakistan-lucrative-market-for-mobile-handset-makers/http://telecompk.net/2007/11/22/pakistan-lucrative-market-for-mobile-handset-makers/http://en.wikipedia.org/wiki/Telecommunications_in_Pakistan

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