1 1. Executive Summary Ufone (official name: PTML) is a PTCL company, PTML (Ufone) - a wholly-owned subsidiary has improved its financial performance commenced its operations on 29th January 2001 as a GSM 900 service provider. Since the outset, it has expanded its coverage and customer base at a rapid pace and established itself as one of the leading cellular service providers in Pakistan. During the last year Ufone successfully completed the launching of sites under Phase V in existing as well as new cities and towns by investing more than US$ 525 million. This has increased the asset base of Ufone from rupees 20 billion to 27 billion. To further enhance the subscriber base and strategically position the company in the growing telecom market, Ufone has finalized a network expansion for Phase VI contract amounting to about US$ 170 Million. Ufone currently, has network coverage in more than 4,745 locations throughout the country. Ufone's operational performance has been very encouraging despite stiff competition in Pakistan telecom market which has led to reduction of prices to bare minimum level. Ufone managed to improve its revenue and after tax profit by 87% and 54% respectively, as compared to the last year through aggressive policies and exercising strict control over expenses.
Transcript
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1. Executive SummaryUfone (official name: PTML) is a PTCL company, PTML (Ufone) - a wholly-owned
subsidiary has improved its financial performance commenced its operations on 29th January
2001 as a GSM 900 service provider. Since the outset, it has expanded its coverage and
customer base at a rapid pace and established itself as one of the leading cellular service
providers in Pakistan.
During the last year Ufone successfully completed the launching of sites under Phase V in
existing as well as new cities and towns by investing more than US$ 525 million. This has
increased the asset base of Ufone from rupees 20 billion to 27 billion. To further enhance the
subscriber base and strategically position the company in the growing telecom market, Ufone
has finalized a network expansion for Phase VI contract amounting to about US$ 170
Million. Ufone currently, has network coverage in more than 4,745 locations throughout the
country.
Ufone's operational performance has been very encouraging despite stiff competition in
Pakistan telecom market which has led to reduction of prices to bare minimum level. Ufone
managed to improve its revenue and after tax profit by 87% and 54% respectively, as
compared to the last year through aggressive policies and exercising strict control over
expenses.
2. Introduction
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Ufone is a Cellular Service Provider founded in 2001 It is also a subsidiary firm of PTCL As
of 2008; Ufone employs more than 1,730 people. It manufactures it’s the GSM company
providing services to all four continents urban and rural areas., As of 2008, Ufone is the
second largest telecommunication company in Pakistan. In recent years the company has
endured significant improvement in services to almost 4,745 locations throughout the
country.
3. History
In 1990, Pakistan introduced its first mobile phone service called “Paktel”. After eleven years
in January 2001, a new cellular company with GSM technology came into the market and
they named it Ufone. The government of Pakistan granted them the license of Pak Telecom
mobile limited to operate GSM 9000 all Around Pakistan. Ufone succeeded to establish itself
in the market by providing quality service at low rates. After it’s opening, initially they
started their service in major cities like Rawalpindi, Islamabad, Karachi and Lahore and on
major highways. Later the service expanded to other major cities like Peshawar, Quetta and
different towns.
Ufone invested around $ 65 million to setup its modern technical infrastructure to provide
high quality crystal clear voice and fast data transmission. Ufone targeted the middle class, by
introducing low rates and different packages with Urdu names like Jazba etc to attracted
lower and middle class people. Ufone has expanded its customer support in a very organized
manner with a planned network of dealers, outlets for people convenient. Ufone is committed
to care for its customers even after they have acquired a new connection.
Ufone not only focused on the technical capabilities, but to provide subscribers a convenient
to get connections and services. Ufone recently started GPRS through which users can
connect themselves to the global village via Internet, also introduced multimedia messaging
services and worldwide SMS at flat rates. Not only SMS but also provides Ufone Info service
through which user can get latest information about news, sports, religion, horoscope, stock
exchange etc even live sports updates. The tariff packages have been designed keeping in
mind the requirements of every segment of the society may that be a housewife, a taxi driver,
a trader or a student.
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Ufone started its operation from Islamabad on 29th January 2001. Cellular industry
performance in Pakistan before the launch of Ufone was quite dismal, with one of the lowest
population penetration rates in the Whole region. Ufone’s strategy from the day one was to
change this scenario and ensure that mobile phones are turned into an everyday business and
personal communication tools for all. This approach brought about a revolution in the market;
increasing its size fivefold in a mere two years. Ufone’s own performance in these two years
has been exemplary, as it surpassed all financial and marketing goals. Despite Ufone’s
strategy to provide a high standard of service rather than increasing subscriber base without
capacity, it has achieved a substantial market share in a market ten years older than itself.
1. COMPETITIVE ANALYSIS:-The competitive environment for mobile telephony in Pakistan is tough and Ufone’s is a major player of the market. Primary competition is of course between four mobile operators for the share of the market. But there is other potential source of competition, which should also be taken into consideration
DIRECT COMPETITION:
Direct competition to Ufone service is with thee licensed mobile world in today’s market. These are: Mobilink. Warid . Telenor. Zong
INDIRECT COMPETITION:The indirect competition is from: Fixed line services. Card payphone services. Prepaid calling cards.Massive expansion in penetration and quality of fixed line, payphone and prepaid calling cards can effect mobile business environment.
(i) MAJOR COMPETITORSUfone is facing competition from 4 network operators operating within Pakistan, among which, MOBILINK, WARID.TELENOR and ZONG.
MOBILINK:-
Mobilink GSM (PMCL), a subsidiary of Orascom Telecom, started its operations in 1994, and has become the market leader both in terms of growth as well as having the largest
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customer subscriber base in Pakistan - a base of over 31 million and growing. Mobilink pride ourselves on being the first cellular service provider to operate on a 100% digital GSM technology in Pakistan that also provides state-of the- art communication solutions to its customers. Mobilink offers exclusively designed tariff plans that cater to the communication needs of a diverse group of people, from individuals to businessmen to corporate and multinationals. To achieve this objective, we offer both postpaid (Indigo) and prepaid (JAZZ) solutions to our customers. Compared to our competitors, both the postpaid (Indigo) and prepaid (JAZZ) brands are the largest brands of their kind in the Pakistan cellular industry.In addition to providing advanced voice communication services that makes the lives of millions that much easy, we also offer a host of value-added-services to our prized customers. At the same time, Mobilink places high importance to its coverage, which is why we cover you in 10,000+ cities and towns nationwide as well as over 130 countries on international roaming service.
TELENOR:-
Telenor Pakistan launched its operations in March 2005 as the single largest direct European investment in Pakistan, setting precedence for further foreign investments in the telecom sector. The company has covered several milestones over the past twenty eight months and grown in a number of directions, Telenor have grown to become a leading telecom operator in the country. In fiscal year 2006, Telenor achieved nearly 200% growth in our subscriber base – the highest in the industry by a wide margin. Telenor are the fastest growing mobile network in the country, with coverage reaching deep into many of the remotest areas of Pakistan. In the most difficult terrains of the country, from the hilly northern areas to the sprawling deserts in the south, at times we are the only operator connecting the previously unconnected.
WARID TELECOM:-
Warid Pakistan launched its services in May 2005.Within 80 days of launch Warid Pakistan claims to have attracted more than 1 million users. According to Pakistan Telecommunication Authority, currently Warid Telecom has 16.15 million subscribers as of September 2008. It is ranked as the fourth largest operator in Pakistan. Warid Pakistan claims it has the largest "postpaid" subscriber base in Pakistan. On June 30th, 2007, Singapore Telecommunications Limited (SingTel)and Warid Telecom announced that they have entered into a definitive agreement subsequent to which SingTel will acquire a 30 per cent equity stake in Warid Telecom for an estimated $758 million — valuing the company at an enterprise value of $2.9 billion.
ZONG:-
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Zong is the first International brand of China Mobile being launched in Pakistan. It is meant to empower and liberate the people of Pakistan in every nook and corner of the country. It will become a part of their hearts, their minds and bring about a change in their lives that everyone desired but few thought would be possible. The core essence of ZONG is to allow people to communicate at will, without worrying about tariffs, network coverage, capacity issues or congestion. ZONG will be supported by ground breaking communications, trend setting customer service and an unmatched product offering which will redefine rules of the game and establish. ZONG as a serious contender for the number one spot.
4. MISSION
"Ufone, it's all about U! We are where you want to be…
…At Ufone we aim to provide you with wider coverage, superior connectivity, clear signals
& voice quality. Wherever you are, Ufone keeps you connected."
5. VISION
“To be the leading telecommunication service provider in Pakistan by offering innovate
communication solutions for our customers while exceeding shareholder value & employee
expectation.”
6. OBJECTIVES
Ufone is a dynamic organization with a powerful culture that allows people to make the most
of their skills, personality and career. I developed such knowledge and skills which directed
to my career. Customer Service 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. The outlets are able to service the customers with
innovative solutions, and are empowered with Web based franchise management systems.
Ufone is poised to face the ever increasing challenges of the market and is confident it will
attract new customers. It 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.
7. Departments in Ufone
The Following departments are currently working:
Human Resource Management
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Marketing Department
Commercial Department
Sales Department
Finance Department
Payroll Department
Information Technology Department
Engineering Department
Administration
Auditing Department
Customer Care
8. Environmental Scanning
8. A Internal & External Analysis
Internal Analysis
Human Resource Management
Marketing Department
Commercial Department
Sales Department
Finance Department
Payroll Department
Information Technology Department
Engineering Department
Administration
Auditing Department
Customer Care
External Environment
Economic Conditions
Social Conditions
Culture
Demographics
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Environmental
Competitive
Technological
SWOT ANALYSIS:-SWOT analysis is a mean of summarizing an Ufone strategic factor. It illustrates how the external opportunities and threats facing a particular organization can be matched with that corporation’s internal strengths and weaknesses to result in four sets of possible strategic alternatives.
STRENTH:-
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 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.
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 achievement indeed, especially considering the fact those two new international players also entered into themarket in 2005.
Ufone increased its Focus on the youth segment (which comprises 50% of the population), with the Prepay brand.
Ufone has some exciting and energetic SMS packages that made SMS almost free. They are offering Rs. 25, Rs.50, Rs.80 packages which its subscribers really love it.
Variety of Value Added Services. Established customer base including lower middle class. Fewer rates than
competitors.
WEAKNESSES:-
Ufone 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. Ufone have to take serious steps to properly list its customers to ensure that there is no misuse.
Ufone 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.
Poor Organizational Structure. Centralized structure failed to provide proper guidance over instruction and policies
Stagnant Profitability. As compared to financial assets, Ufone is not close to expected profitability
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Its coverage on Southern part of Pakistan is quite good but in northern areas its coverage is a bit poor.
Ufone is plagued with some internal problems like when it is privatizedØ to Etisalaat being the part of the PTCL many employees were not happy with the pay scale that they were offering.
OPPORTUNITIES:-
Ufone 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:
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.
Ufone 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 Ufone can take advantage of this demographic situation and should introduce more and more services and packages that attracts youth towards it.
Ufone 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 Ufone give its service there then it will definitely attract people and its number of customers will shoot like a rocket.
If Ufone enhance its voice quality then definitely it would be prefer more by customers.
Ufone should import technological equipments from China because they are giving the best
Technology at very low rates so it will not only help Ufone to be ahead technologically but also will help Ufone to decrease its cost.
Ufone can surprise its competitors by introducing “Ufone kiosk”. These will be ATM like machines and that will give 24-hour service to Ufone subscribers to load the balance just like they take money from ATM.
THREATS
As Ufone is cellular company and there is cut throat competition among cellular companies in Pakistan. There are four other companies also working in Pakistan so Ufone would have to face some growing competitive pressures.
In Balochistan and FATA where Ufone already has network coverage is inØ danger because of critical situation and operation being held there. Investment of Ufone is in danger.
By the arrival of China Mobile Company (Zong) in cellular industry ofØ Pakistan the Ufone 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.
Ufone have to develop strategies to counter their strategy and to survive in the market. The key threat to Ufone is also some adverse Government policies ofØ implementing
Tax on telecommunication industry that will ultimately affect the revenues.
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Telenor is giving higher salary to its employees as compared to Ufone so many of its skilful and competent employees are going there. That will affect the company’s profitability in the long run.
Another threat is any new company from foreign countries e.g. Orange and Vodafone.
8. C Structure (Chain of Command)
C.E.O
V.P
G.M
Senior Manager
Manager
Assistant Manager
Senior Executive
Permanent Executive
Outsourced Executive
M.T
8. D Culture
Ufone is a dynamic organization with an equally empowering culture that allows people to
make the most of their skills, personality and career. As a company we deliver solutions that
drive business value, create social value and improve the lives of every customer.
8. E Resources
Ufone is a special place to work. Employees at Ufone gain help in developing their
capabilities and are recognized and competitively rewarded for their performance.
We believe that all employees at Ufone have a right to offer input and be involved in helping
their team grow. Creating a work environment in which employees can improve their minds,
continuously learn, gain professional growth and feel inspired by similarly motivated
individuals is fundamental at Ufone. In turn, we expect that employees share Ufone’s vision
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for company, team and individual growth and that employees will strive to make a difference
every day. This exemplifies Ufone’s commitment to people.
Formulation
9. Strategies
10. A Corporate Strategy
A corporate strategy depicts the corporate culture's perception of progress and growth. The
corporate strategy comprises a directional strategy through a corporate vision and a mission
statement. The corporate strategy is an important strategy to observe to depict the best image
of the company toward its clientele. If the corporation wants to be perceived as a leading
clothes manufacturer, its corporate strategies have to incorporate growth in the retail line that
will allow them to keep up with the latest trends in fashion and clothes.
10. A. I Directional Strategy
Ufone is currently following “Internal growth strategy”, as it is the second largest cellular
company operating in Pakistan. The company is mainly focusing on market development i.e.
they are expanding their network to capture large market share Along with that they are also
doing product development for which training will be of a more technical nature, as well as
focusing on interpersonal skills such as team building.
10. A.II Growth Strategy
As mobile users in the country have reached over 28 million at a very rapid pace, Ufone has
maintained itself as the 2nd largest cellular operator in Pakistan with a subscriber base of
around 6.5 million and a market share of nearly 22%. Ufone has seen a subscriber growth rate
of over 200% in the last year, and since the start of 2010. Ufone added nearly 5 million
subscribers onto its network. A remarkable achievement indeed, especially considering the
fact those two new international players also entered into the market in 2005. Subsequently
the growth in subscriber base caused a healthy trend in revenues which have doubled.
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10. A.III Diversification Strategy
Ufone does not seems to be going in diversified business, it’s all business are telecom based.
10. A.iv Stability Strategy
Ufone continued its remarkable track record in the telecom industry with handsome growth in
revenues by 16 percent and in profit by 78 percent in the third quarter of current fiscal year
ended in March 2010.
Pakistan Telecommunication Company Limited (PTCL) financial report said that it wholly-
subsidiary outperformed again to consolidate a quite strengthening position of the company
in terms of its financial stability.
10. A. v No Change Strategy
Ufone is consistently working on no change strategy because their strategies are very much
stable, and need not any kind of major change.
10.A.vi Profit Stability Strategy
A recently released annual report PTA for the year 2008-2009 has shown growth of 17% in
revenue for the cellular industry overall reflecting that the industry is involved in a healthy
competition and its strategy to increase customer base as well as revenues through value
added services and call minutes has worked so far.
Amongst the top four players, Ufone led with 46% increase in revenue, Mobilink the largest
cellular operator in the country in terms of declared customer base has increased its net
revenue by 4%over the same period, Telenor also performed well with 14% increase and
Warid telecom fared with 9% increase in revenue. The total revenue of the industry saw a
growth from Rupees 182.122 billion in the year 2007-2008 to Rupees 212.423 billion in the
year 2008-2009.
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10. B.vii BCG Matrix
Ufone understands the value of words and the need to communicate effectively and
efficiently at all levels of society, which is why company’s primary focus is on U. Ufone
offers, Prepay & Post-pay services in the Telecom sector.
The telecom market’s growing rate in Pakistan is higher than any Asian country. Ufone offers
lower rates and better network then other already established cellular companies. All living
standards have been captured by Ufone, like Students, Labour and Businessmen, etc.
Ufone aims to provide with wider coverage, superior connectivity, clear signals & voice
quality to their valued customers
From this figure we can see that ufone prepay is at Stars and Post-pay on question marks this
means that ufone should advertise the post-pay more than their prepay connections as it
should also be in the stars for higher success and to get High growth-rate and High Market
Company should continue its low rates packages to compete with its competitors
Bargaining Power of Buyers
Similar Call rates Low MNP rates Similar Packages Low switching Cost Undifferentiated Services
Product differentiation New offers Increase Brand Loyalty among customers through competitive advantage Bringing out innovative services
Bargaining Power of Suppliers
Their suppliers in the market are less but they sell to many No substitute of suppliers.
Company should work on creating long term healthy relationships with the suppliers.
Threat of Substitute
Number of substitute available e. g Telenor, Mobil ink, Warid, Zong Same services characteristics by competitors substitute Low switching Cost
Service differentiation Value addition Built brand name through brand awareness Develop brand image Use competitive advantage as a tool
Rivalry among
Number of competitors Plenty of growth
Increase level of competitive activity Price
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Established Firms or Competitors
opportunity in market Similar service characteristic
reduction New services
10. C Functional Strategy
10. C.i Core Competencies
The essential CRM focus of any organization should be on developing core competencies,
and an overall strategy of building customer relationships. In this way, all efforts in the
organization can be aligned to:
Customers and the culture of exceeding of customer expectation
Understanding and managing the people impact on the culture of the organization
Customers being recognized and treated as partners
The value of relationship-building being valued
Service being seen as a value-adding activity
Reward and recognition being based on customer focus ie., 'going the extra mile'
Evidence of corporate support for service activity
10. c.ii Market Segmentation
Prepaid
Cellular service market is a diverse set of people. Ufone as well as other cellular service
companies segment their market on four bases: - economy, age, gender & occupation.
1. ECONOMY: Upper class, Middle class, socio-economic class, lower class
2. AGE: Teenagers, youngsters, middle age, aged people
3. GENDER: Male & Female
4. OCCUPATION: corporate class, Business class, working class etc.
Postpaid
Cellular service market is a diverse set of people. Ufone as well as other cellular service
companies segment their market on four bases: - economy & occupation.
ECONOMY : Upper class, Middle class,
OCCUPATION : corporate class, Business class
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10. C.iii Target Markets
Prepaid
Cellular phones are the technology of new era, the 21st century. These cellular phones are the
main focus of our youngsters. All the cellular companies are targeting The Youth one way or
other. Ufone is no longer a follower in this race. Its main focus is “THE YOUTH” of
Pakistan which is its Target Market.
Target marketing strategy
Ufone has always been targeting Youth Market by using young brand endorsers
or ambassadors. It always brings such packages and offers that precisely meet the needs of
our young people. No doubt it has also launched packages, brands and offers for working
people, business class, ladies and aged ones. Ufone seeks to target masses in the long run.
Postpaid
Cellular companies providing postpaid service target government bodies, corporate class,
business class which are earning premiums from the market. Leading persons in the
companies and government are the most attractive customers of the postpaid service.
Target marketing strategy
Ufone is targeting corporate class by providing most suitable packages which facilitate
corporate class affectively. Ambassadors for the postpaid are chosen very carefully which
correctly target the corporate class. They provide packages, offers and brands which meet
corporate class’s day to day business needs.
10. C.iv Positioning
Prepaid
Positioning is the process of creating an image of company’s brand in the mind of market.
Companies position themselves emotionally, functionally or on the basis of brand quality.
Ufone is still a market challenger in comparison to market leader MOBILINK. It is still to
reach to the top most position of cellular companies. So Ufone positions itself on the basis of
its services.
Ufone’s former Positioning Statement:
“Everybody Loves to Ufone Prepay”
Ufone’s new Positioning Statement:
“Ufone tum hi toh ho!”
Or
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“It’s All about U”
Ufone’s positioning strategy
Ufone changed the image of mobile phones from a luxury only affordable by the elite, to a
necessity affordable by the common man. Since its inception, Ufone has positioned its brand
for “MASSES” on the basis of services it is providing and its lowest call rates. It makes them
believe that it satisfies the needs of everyone (viz all classes, age & genders). It tells them
that Ufone is there when anybody needs it. The brand name UFONE itself is a positioning
statement.
Postpaid
Although Mobilink has the most of the market share of the postpaid but Ufone is positioning
the market on the basis of service.
Ufone’s Post-paid slogan is
“Endless Possibilities”
Ufone’s positioning strategy:
Ufone firstly positioned postpaid as the use for corporate class only but Mobilink already
captured the most of corporate class, then Ufone repositioned its postpaid by providing
package to each business class such as U50, U250 etc.
10. C.v Differentiation
Prepaid
In these days of intense competition marketers find it hard to differentiate their services from
those of competitors. Now customer care about only price. An unsatisfied customer will
immediately go for brand switching. Thus leaving a customer unsatisfied and not meeting
his/her demands is out of question for marketers.
Differentiation Strategy
Ufone has always strategized in satisfying the demands of its customers. In doing so it has
been successful in differentiating itself in terms of:-
Price
Quality service
Technology
Postpaid
As Mobilink is already capturing most of the Post-paid market because of its first mover
advantage that was the reason. Ufone differentiated its postpaid by not compromising on
quality. Corporate persons have concern with quality of service provided to them.
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Differentiation Strategy
Ufone satisfies its customers by providing best of the postpaid service. In postpaid Ufone
differentiate itself on the basis of;
Quality
Price
Technology
10.C.vi Customer Relationship
Prepaid
With 28 million mobile users in Pakistan, Ufone is having a subscriber base of around 7
million. Ufone is showing a remarkable growth rate. It is maintaining a healthy customer
relationship through its “customer service centers” and “call centers”. Its department of
“Customer Operations” is specially designed for maintaining Customer Relationships.
Customer Relationship Strategy
Ufone strategize to build and maintain strong customer relationships in order to build long-
term customer loyalty and to capture customer lifetime value. In this context Ufone has been
training its internees and permanent employees in the fine art of interacting with customers. It
is also strategizing to offer gifts & rewards for its long-term customers in its Post Pay to
match the wonderful customer relationship strategy of INDIGO.
Postpaid
Ufone postpaid is on the second position in postpaid market and having a large anount of
customers which trust on the Ufone postpaid. It is maintaining a healthy customer
relationship through its “customer service centers” and “call centers”. Its department of
“Customer Operations” is specially designed for maintaining Customer Relationships.
Customer Relationship Strategy:-
In Postpaid Customer Relationship Strategy, postpaid customers are preferred on the others.
They get preference in every service just as when they call on Ufone helpline their call is
given response frequently and treated very well.
10.C.vii Total Market orientation
Prepaid
Total Market Orientation is about understanding and meeting customer’s expressed and latent
needs.
Strategy
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Ufone has always considered the ever growing needs of low call rates and quality service. It
has provided its customers their needed packages and has introduced such brands & packages
that meet customer’s latent needs as well. For example 5 ka 15 is result of a latent need of
women of our society. They plan to make a short call but it becomes a long one
unintentionally due to gossips and chit chats.
Postpaid
Total Market Orientation is about understanding and meeting customer’s expressed and latent
needs.
Strategy
Ufone classifies its postpaid customers in different classes and provides suitable packages
which facilitate each class. For example Ufone introduced U50, U250 to a separate class and
U1600 and U5000 for different class.
10.C.viii Competitive strategy
Prepaid
There is a hard core competition among the cellular service providers in Pakistan. Ufone is a
market challenger in its competitive position, where MOBILINK is the market leader. Warid,
Telenor and newly introduced ZONG are also strong contenders in market challenger
category. Ufone has the following four direct competitors:-
Ufone also considers the following as its competitors:-
ZONG (former PAKTEL)
Mobilink
Telenor
Warid
Strategy
Ufone’s competitive strategies are Customer intimacy and Differentiation. Ufone aims at fore
passing Mobilink in its competitive race.
Postpaid
In postpaid Ufone faces four competitors which are
Indigo
Telenor Persona
Zahi
Zong Postpaid
Mobilink is the major competitor of Ufone which captured most of the postpaid market
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Strategy
Ufone postpaid competitive strategies concentrate on price and quality bases. Ufone gives
different offers and packages to its customers which its competitors don’t.
10.C.ix Marketing Mix
Services
Prepaid
Ufone is a service providing company. Service is any intangible product that consists of
activities, benefits or satisfactions offered for sale.
Positioning Strategies
Product-repositioning strategies
I. Among existing customers
II. Among new users
Postpaid
Ufone Post pay is a brand that keeps up with you, understanding your drive for victory in the
business arena and your sense of belonging in your personal life. On the road to success,
Ufone Post pay is a brand for those who expect more from life, from themselves and from
their phones, so turn your mobile communication into the unique experience you always
wanted.
Positioning Strategies
Product Design Strategy
I. Standard Product
II. Customizd Product
Ufone’s core competency is that they always charge almost lowest rates of their service and
gives quality, modern technology and different offers at one place. Ufone uses penetration
strategy, penetration means it charge lower rates than that of competitors. For example in
postpaid they give different packages to different classes and differentiate its service by
providing marvelous offers.
Price
Prepaid
Cellular service providers are facing intense price competition in contemporary market.
Customers perceive pricing as the heart of brand selection. Price has always seen the core
differentiation of Ufone. Ufone is the one who is offering least call rates off-network.
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Penetration Strategy
Ufone strategize to capture the existing pricing needs of its customers and use it well on
occasional or timely basis. For example Ufone offered very good call rates on international
calls in Eid days. It offered hourly call rates in Ramadan when people were least likely to
avail the offer that much that it might prove unprofitable for Ufone. It was a fantastic strategy
to beautify the brand image in term of pricing in customer’s minds as well as remain
profitable in doing so. Ufone follows market penetration pricing strategy and dynamic pricing
strategy to meet the customer needs and ever changing price competition.
Postpaid
Customers perceive pricing as the heart of brand selection. Price has always been the core
differentiation of Ufone. Ufone is the one who is offering least call rates off-network.
Penetration Strategy
Ufone’s price strategy in postpaid is very affective and suitable according to market needs
and priorities. Ufone always gives its customers almost lowest rates prevailing in market.
They give packages to each class and facilitate with most suitable packages
Place
Prepaid
Place plays a very important part in the distribution and promotion of services. Competitors
of Ufone are seeking to penetrate into places where others haven’t reached. Cellular service
providers are drastically widening their network & coverage in every area of Pakistan.
Mobilink has this edge in place excellence because it is the pioneer in cellular telephonic
field.
Intensive Strategy
Ufone strategize to widen its coverage to all places in Pakistan in order to meet the
requirements of its increasing customer base. Now Ufone is heading from cities to remote
northern areas in expanding its network. Ufone has intensive promotion in cities, but it is also
considering improving its promotion in rural areas as well.
Postpaid
Place plays a very important part in the distribution and promotion of services. Competitors
of Ufone are seeking to penetrate into places where others haven’t reached. Cellular service
providers are drastically widening their network & coverage in every area of Pakistan.
Mobilink has this edge in place excellence because it is the pioneer in cellular telephonic
field.
Intensive Strategy
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Place plays a very important part in the distribution and promotion of services. Competitors
of Ufone are seeking to penetrate into places where others aven’t reached. Cellular service
providers are drastically widening their network & coverage in every area of Pakistan.
Mobilink has this edge in place excellence because it is the pioneer in cellular telephonic
field.
Promotion
Prepaid
Ufone believes in Integrated Marketing Communication which is a carefully blended mix of
promotion tools. Ufone employ different marketing activities and channels to communicate
and deliver value to customer. These activities are coordinated to provide maximum
communication output. These communication channels includes:-
Advertising, sales promotion, public relations, direct marketing & personal selling. Ufone
strategize to carry out promotion in order to increase its market share.
Strategy
Advertising
Sales Promotion
Public Relations: Ufone is less conscious of developing its general public relations.
But recently it has launched its “Hajj Guide” service on Ufone. It avoids getting in
news stories and controversies but sometimes it proves inevitable.
Direct Marketing: Ufone employ on-road umbrella franchises where the directly
market and sell their connections and Sims.
Personal Selling: Ufone administer personal selling facility to sell their Post Pay
connections targeting well to do people and businessmen.
Postpaid
Ufone is currently not advertising its postpaid service through television, newspaper and
other advertising source but one can get awareness of postpaid by Ufone pamphlets,
broachers and posters
Sales Promotion Strategy
Public Relations: Ufone is less conscious of developing its general public relations. But
recently it has launched its “Hajj Guide” service on Ufone. It avoids getting in news stories
and controversies but sometimes it proves inevitable.
10.C.x Advertising & Developing AD Campaign
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“Any paid form of non-personal presentation and promotion of ideas, goods, or services by
an identified sponsor”
Advertising Objectives
Ufone use advertisements when:
It has to inform the customers about new or available services
It seeks to persuade people to purchase their service or switch to their connection
from any other connection
Advertising Budget
Ufone is a heavy spender on advertising in electronic media as well as other media. Recently
Ufone invested a huge amount on mass advertising. It was definitely a risk to take such
decision. They are developing and playing new advertisements on electronic media not even
with a month’s gap or so. A single Ufone advertisement played 15-20 times per day on a TV
channel costs millions varying with the time of day when it is played. Ufone spends 20% of
its profit on advertising and sales promotion.
Advertising Strategy
Advertising strategy consists of two major elements: Advertising Message & Advertising
Media. Ufone has the following strategies regarding the Message and Media of advertising,
Advertising Message
Message Content --»The very first content of Ufone’s advertising message was humor, and
then in its blooming stage it shifted its message content to youthful excitement. Recently
Ufone has again adopted humorous theme for its message content. This time Ufone is
winning the hearts of people through humor and it has increased RPI of Ufone. Ufone has
already generated much revenue through it.
Message Format --»The format of Ufone’s advertisements has always been very
colorful and eye catching. The shocking Orange & Green colors used by Ufone have
always attracted people. These colors look beautiful on wall printing of Ufone.
Message Source --»The very first Ufone advertisements had Faisal Qureshi as its
message source. Afterwards Ufone hired non-celebrity young models for its youthful
message theme. Ufone also hired three lollywood queens i.e. Meera, Jia Ali and
Veena Malik with Mikaal in an advertisement of “Baat Ban Jaye”. This advertisement
created a big controversy regarding the erotic and sexually attracting acts by the three
female models. Due to negative response by people Ufone had to vacate its billboards
and eradicate its banners, posters etc overnight, as directed by CEO and CMO of
Ufone. But now Ufone has again hired a comedian trio featuring Faisal Qureshi,
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Mikaal & Hammad. The strategy behind hiring this trio is that they are economical
and are personal favorites of people. Ufone always hire endorsers in group ·
Mr.Waqas Anjum (Senior Marketing Executive-Multan) is of view that you must
bring changes in marketing to attract customers. For this purpose Ufone is re-
launching itself under the name of one single brand called “UFONE”. This brand
would have Orange & Black as its corporate color instead of conventional Orange &
Green color.
Personal Selling
Personal selling is oral communication with potential buyers of a product with the intention
of making a sale. The personal selling may focus initially on developing a relationship with
the potential buyer, but will always ultimately end with an attempt to "close the sale"
Personal selling is one of the oldest forms of promotion. It involves the use of a sales force to
support a push strategy (encouraging intermediaries to buy the product) or a pull
strategy (where the role of the sales force may be limited to supporting retailers and
providing after-sales service).
Ufone sale representative make the selling selling by providing services to the customer at
their doorstep, i.e. informing about the new packages, serving customers and of course sell
their product and attract the new customers.
10.C.xi Financial Strategy
Ufone has over the last six and a half years made huge investments in the national economy.
PTML has successfully been able to build upon its excellent financial results from the
previous year. During the year Ufone successfully completed the network expansion of Phase
IV 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.
Since Ufone is an SBU of PTCL therefore they are not authorized to disclose their profits
separately. For the same reason PTCL’s financial statement incorporates the profits earned
through its mobile operations and the figure are displayed in their annual reports.
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
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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.
A strong focus will be on maintaining high quality of service, which is always a benchmark
of Ufone, increasing usage and exploring new revenue streams on value added services,
market visibility through various market initiatives to fulfill subscribers’ satisfaction and
demand and above all to increase the value of investment for the shareholders.
10. C.xii Operational
When a company wants to compete in innovation, it needs to maximize flexibility. Flexibility
is maximized by aggregating work into larger, holistic pieces that are executed by teams of
higher wages, high skilled workers. Giving the units their own support systems and decision-
making authority to take advantage of local opportunities in regional or specialized product
markets also enhances flexibility.
Keeping in view of all these factors the structure of Ufone is designed i.e. the overall
Structure of the Ufone is Divisional (More flexible and innovative). Mainly Ufone has four
regions and within those regions the structure is functional .The decision making authority is
centralized at the top but within the regions it is decentralized i.e. regional heads have to
inform top management before making any decision.
EngineeringCustomer Care
Information System
FinanceMarketing
&
Sales
Project Director
CEO
Board Of Directors
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This is what Ufone looks from the organizational hierarchy point of view. There are eight
different departments each headed by a Project Director. They report directly to the CEO.
There are four BU (Business Unit) each Project Director is responsible for these eight
divisions. BUs are divided geographically into three divisions
BU North (Peshawar to Jehlum, including Islamabad)
BU Central-1 (Gujranwala till Sialkot)
BU Central-2 (Multan till Rahim Yar Khan)
BUM South (Sindh and Balochistan)
In order to give a jump-start to the company, a comprehensive initiation plan has been made
along with aggressive customer acquisition, care and retention strategies. Ufone has the best
integration of eight departments each project director.
Finance
Engineering
Customer Care
Marketing & Sales
Human Resource
Business Units Khi/Lhr/Fsd
Information Systems
Quality Assurance
Provision of quality service to the customers is of utmost importance for the progress of any
service-based company. At Ufone the management is mindful of the same and has been
constantly endeavoring to enhance the existing facilities. Therefore operations at Ufone are
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all planned and carried out in such a way so as to maximize operational efficiency and
customer satisfaction.
Although it is the subsidiary of the Pakistan Telecom Company Limited (PTCL), Ufone
carries out its operations autonomously under the license of Pakistan Telecom Mobiles
Limited (PTML). The company head office is established in Islamabad (F-7 Markaz), which
serves as the center for all its strategic activities.
Operating Performance
Ufone’s operational performance has been very encouraging. Despite the stiff competition in
Pakistan telecom market which has led to reduction of prices to bare minimum level, due to
its aggressive policies and exercising strict control over expenses the Company managed to
improve its revenue and after-tax profit by 87% and 54% respectively, as compared to last
year.
10.C.iii Human Resource Management
UFONE considers their employees to be the asset of the company, so in order to retain their
employees following practices are followed in the company.
HR Practices
Recruitment and selection
Orientation
Training and development
Compensation and Benefits
Performance Appraisal
Work Force
HR at UFONE is divided into the following two major categories
Permanent Employees (1500-2000 Approximately)
Outsourced Employees (2000 Approximately)
Permanent Employees
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HR Permanent employees are further divided into following two categories.
Operation
Training and Development
Operational Department
It covers all the areas including hiring recruitment, selection and payroll etc. HR operation
team manages all the employee activities gathers all the information and make use of it for
further processes.
Training and Development
HR team of training and development make a performance evaluation of all the employees
and the see where the gap occurs between the actual performance and the desired
performance. Then training is designed for area which needs to be improved. On the job and
off the job both the trainings are given according to the need of the employee.
Employee Benefit & Compensation
Training & Development
Employee Motivation
Retention of Employees
Career Planning/ Succession Planning
Employee Relations/ Communication
Employee Awards
Employee Events Management
Medical & Life Insurance
Compensation and Benefits
Ufone follow the performance base pay structure and pay for their performance and work
output.
Compensation
The total returns which an employee gets against his or her work.
It maybe:
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Employee Health Plans
Employee Insurance
Employee Leave
Employee Retirement Income Security Act
Executive Compensation
Maternity & Paternity Benefits
Pension & Retirement Plans
Wages & Salaries
Workplace Programs
Compensation strategies are usually market based and is linked with the performance with a
greater emphasis on variable pay. Salary adjustment is based on the performance, market
movement and internal/ external equity adjustment. Revision of compensation is based on
total pay and monetization of benefits.
11. Implementation
11.a Program
Ufone had been implanting different kind of activities to promote itself like
Plant a Tree Campaign
Ufone Comics
Unique Banking Solution with HBL
11. b Budget
Ufone invests heavily on its advertising budget and its commercials are not only aired on TV and radio but are also printed in the leading newspapers and magazines of the country. Huge billboards and banners have also been put up at eye catching locations in different cities, advertising the latest new services being offered. It also participates in sponsoring various theatre and stage plays in various cities along with live rock concerts held across the country.
11. C Total Quality Management
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A strong focus will be on maintaining high quality of service, which is always a benchmark
of Ufone, increasing usage and exploring new revenue streams on value added services,
market visibility through various market initiatives to fulfill subscribers’ satisfaction and
demand and above all to increase the value of investment for the shareholders.
12. Controlling and Evaluation
Controlling is the basic process of monitoring, comparing and connected work performance.
Ufone’s performance have been very encouraging.Ufone has maintained itself as the 2nd
largest cellular operator in Pakistan with a subscriber base of around more than 99 million
and a market share of nearly 22%.
12. A Value Chain Management
The value chain management of ufone s very effective because they have divided their work
in every level of organization according to workers works specialization.
12. B Methods of Ufone
The methods which ufone is following in every field (planning, organizing, leading,
controlling) is well balanced and working like a charm..,
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13. Conclusion
Ufone is one of the telecom sectors who need to produce more output by implementing new
technologies, new tariffs, and new consumer satisfaction value added service. Further, it is
still the second largest cellular service provider in the country. Ufone more need to grow in
the market and to meet the customer needs by satisfying them. Ufone bring amazing packages
to attract the customers.
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The choice of people is Ufone because Ufone price level is low and affordable that every
One can say
“It’s all about U”
14. Recommendations
Ufone should introduce International SMS packages. Ufone has strong financial position &
more competitive advantages then other cellular companies so it should more focus on its
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