UFone Assignment by Shakeel Ahmad

By Shakeel Ahmad Assignment on Ufone

CHAPTER -1

INTRODUCTION

1.1 BACKGROUND OF THE STUDY:

This report is about the Ufone, specifically concentrating on the marketing

strategies of the Ufone and the Customer care, in the growing and most

competitive industry of the cellular phones. In the competitive business

environment of these days, the performance of an organization cannot be judge

absolutely. It should be comparative. The organization’s journey towards its

mission needs a continuous review of its performance on pre defined time

periods. This performance must be measured against standards to indicate

whether everything is going well or there is a need to take corrective actions.

In this report the focus will remained on the performance of the company

regarding the tough industry competition and growth and the company’s

marketing strategies. It will also cover to some extent different other areas, and

also the company’s strategy to remain directly in contact with its customers

through customer care centers.

1.2 ANALYSIS:

Ufone has very good prospects, as the growth potential of the cellular

industry in the country is enormous. Ufone has successfully reached over 180

cities and still a lot more has to be done.

Ufone holds a very effective sale promotion strategy and one of the major

steps it has taken in this regard is the free launch of connections on 14 august

National College Sciences1


2004 which has boosted its customer base and sale of scratch cards. Ufone is

always been consistent in lowering its prices and making mobile an affordable

thing in reach of a common men.

1.3 FINDING:

All the measures of true success, exceeding the revenue targets, crossing

the targeted subscriber base, providing excellent customer care, capturing a

substantial expanding the size of the market and surpassing all customer

expectations, have been achieved by Ufone, quite obviously. Ufone is a real

success.

Conclusion of the major issues based on analysis of the performance of

Ufone and its market value reveals that it has a market niche of being inexpensive

and reliable.



1.4 RECOMMENDATIONS:

Ufone should sustain its niche of being inexpensive and reliable. It should

adapt the horizontal growth strategy. It should re-organize the current structure of

management at Ufone customer care centers to improve the quality of work over

there.

1.5 SCOPE OF THE WORK:

To manipulate and discuss each and everything of an organization is

always a difficult task. All the functional areas require a detailed discussion.

Along with all other limitations, time factor is above all. So it has been tried in

this report to remain specific. Main focus of the work thus, is limited to the

marketing strategies of the firm and the customer relations. The performance

regarding these areas might be good, average or bad. Every person in the

organization, individually or collectively, as a member of the department,

contributes to the overall performance of the organization. This can be promote

the goodwill more or less. For service oriented company like Ufone, the credit

mainly goes to the marketing and the customer care departments to maintain and

of the company. So performance can be surely judge with reference to these

departments, which is the main focus of this report.



CHAPTER-2

ORGANIZATIONAL & FUNCTIONAL SETUP

2.1 A REVIEW OF THE ORGANIZATION

2.1.1 INTRODUCING THE UFONE:

The world of telecommunication sector is heading towards the

wireless communication. The mobile business has big growth potential. The fact

is cleared by the increasing demand of the telecom and mobile experts all around

the globe. In some countries it has grown so fast that the level of mobile

penetration has crossed the fixed line levels (e.g. Finland and Sweden). Ufone is a

newly cellular company as compared to others like Mobilink, operating in

Pakistan, providing cellular services for 7 years now. Ufone’s services are offered

by Pak Telecom Mobile Limited (PTML), a 100% own subsidiary of Pakistan

Telecommunication Company Limited (PTCL). PTML is a private sector

organization working independently. Ufone, the brand name of the service,.

Lahore, Karachi, Kohat, Jehlum, Gujranwala, Faisalabad, Shekhopura est. in

addition to the road coverage on Peshawar ---- Islamabad ---Lahore secion. Till

now its coverage has been extended to more than 180 cities.



HISTORICAL BACKGROUND OF UFONE

In today’s changing trends in telecom sector, all global (world class)

telecos has strong cellular networks either directly or through subsidiaries. With

this fact in view, there was need of PTCL as well to hae its own cellular service.

Pak Telecom Mobile Limited, a wholly owned subsidiary of PTCL was therefore

created keeping the same in view.4

Ufone came into existence due to concentric diversification strategy (growth

through diversification out of an industry into a related industry) by PTCL.

Table: 2.1 Proposed Model of Corporate Strategies

Business Strength/ Competitive Position

Strong Average Weak

IndustryAttrac-

Tiveness

Hi

Med

Low

1Growth

Concentration via Vertical Integration

2Growth

Concentration viaHorizontal Integration

3RetrenchmentTurnaround

4Stability

Phase or Proceed with Caution

5Growth

Concentration via Horizontal Integration

6Retrenchment

Captive Company or Divestment

StabilityNo change inProfit strategy

7Growth

ConcentricDiversification

8Growth

ConglomerateDiversification

9RetrenchmentBankrupley or

Liquidation

Source J.D. Hunger, E.J. Flyon and T.L. Wheelen, “Contingency Corporate

Strategy; A Proposed Typology with Research Proposition,” Paper presented to



the Midwest Division of the Academy of Management, Milwaukee. Wisconsin,

April 1990.

In this background of growth, it was essential for PTCL to establish itself in

cellular phone business before the exclusivity on fixed telephone expires.

Entrance of PTCL in cellular phone industry will keep it to face the challenge of

exclusivity expiry.5

Being leader in its core business of providing connections for

communication through land lying phones/terminals PTCL has the capabilities

needed for success in the newly industry. PTCL has a strong financial position to

support its new business. It has a surplus liquidity which is placed at low interest

rates. The investment in Ufone has got a big opportunity to earn huge returns for

PTCL. And it is cleared of the large business Ufone has earned and its successful

circulation over 180 big cities of Pakistan.

EVOLUTIONARY PROCESS:

The dream of PTCL to enter into the cellular phone industry is very

old. Till 1995, 96 cellular connections were being provided by three different

companies (which will be discussed briefly in coming chapter). The cellular

phone industry was enjoying high profit margins by targeting corporate customers

only. Mobile phone was considered to be symbol of status. This can be called an

early growth stage of mobile phone industry in Pakistan. From the progress of

these companies being in touch with PTCL for using its land lying network, it was

easy for PTCL to forecast the future of the cellular phone industry. So the plan

was proposed which ultimately led to the establishment of PTML in 1998 and

Ufone in 2001.



NATURE OF THE BUSINESS:

It is a fully service oriented in nature.

MISSION STATEMENT:

“To become the best cellular communication option available in the country for

U.”

SLOGAN:

“It’s all about U.”

GOALS AND OBJECTIVES:

As a common practice big organizations divide their long term

mission into short term goals and objectives. To attain these goals and objectives

they develop strategies accompanied by policies, procedures, programs, rules and

regulations. The goals and objectives have to be achieved collectively or they can

be related to a specific department. So the top management can assign the goals

and objectives to a single concern section or to the entire organization. As a

matter of fact, these goals and objectives are secretive and are not disclose

generally. However broadly speaking, the goals and objectives of Ufone are as

under;

100% achievement in given target of sales.

To penetrate into the market with existing products e.g. prepaid and

postpaid packages as per the segments and to build a front line services

selling company image in public.



Concentrate to generate high quality sales and help to build trust, loyalty

and sense of affection among the customers by performing and extending

extra services to them.

To do all possible efforts to out class competitor’s activities from the

market and to achieve the company’s goals by representing excellently as

a true Pakistani company.

To sustain customer base and maintain quality to avoid sale returns.

To ensure the following personal excellence;

Product and company’s excellence.

Coordination, cooperation and reporting.

Professionalism.

Time management.

Office management.

STRATEGIES:

To be recognized as the leaders in quality mobile communications, Ufone will;

Provide quality services to the customers.

Contribute in the social welfare.

Do right thing at right time.

Reward opportunities to the employees and associates.

Show creativity.

Provide harmony.

Walk the talk (say what you can do)

Respect and value the customers.

Provide integrity.



QUALITY POLICY:

At Ufone, the quality policy is defined in a very simple term that is to

optimize the performance. However the areas on which the management focuses

its concentration are;

o Voice quality.

o Connectivity.

o Customer services.

o Coverage.

In this regard the objective of the firm can be summarized as “To retain the

subscribers on board by maintaining the quality of the product.”

2.2 THE TELECOMMUNICATION SECTOR 1947---2005:

At independence 1947, the Pakistan telecommunication sector was organized as a

combined P&T Department as it was in India before partition. In September 1959,

the minister for railways and communications decided that a detailed examination

be made of the working of the Pakistan Posts and telegraph department for

bringing about improvement.

The Cabinet approved this decision and a major step was taken in 1962 to create

the Pakistan Telephone & Telegraph department. The World Bank felt a

reorganization necessary in 1968 and for that purpose appointed consultants for a

study. This was also followed in 1969 by a review and a report to the Chief

Marshall Law Administrator. In 1973, the Cabinet approved to setup a board to

administer and control the T&T. after prolonged discussions between the

Government and the World Bank during 1973 to 1979, a Presidential Order was



issued on 30th May 1979 which gave the DG T&T enhanced administrative and

fiscal powers and appointed a full time Financial Advisor. The new arrangements

came into force on 1st July 1979. As a result and after reviews, the Government

decided to convert the T&T into an autonomous corporation that was created as

PTC by an ordinance on 15th December 1990. Government obtained the services

of a consortium led by Bear Steams (USA) for study and recommendation which

resulted in the promulgation of the Telecommunication Ordinance of July 1995

separating the policy, regulations and operations in the sector. While policy was

reserved for the Government, the regulation of the sector was entrusted to the

Pakistan Telecommunication Authority (PTA). A frequency allocation board

(FAB) was created for the management of the radio frequency spectrum and for

government’s telecommunication services; National Telecommunication

Corporation (NTC) was created. The PTC was converted to the Pakistan

Telecommunication Company Limited (PTCL) on December 31st, 1995.

In October 1996, the National Assembly enacted the Telecommunication

Reorganization Act replacing the Ordinances.6

PRIVITIZATION OF PTCL:

Internationally, the general trend of conducting business is inclined

towards privatization, with the role of the governments limited to performing

regulatory and monitoring tasks. This approach became popular during the mid

eighties and has continued to be the preferable model to date. This trend has

developed after the world saw the clear inability of government owned and run

organizations to operate efficiently. This was evident in counties like the former

Soviet Union and several of the communist states of the Eastern Europe.



The 1970’s saw a major shift in Pakistan towards nationalization due to the

policies of the government at that time, which was inclined towards a socialist

welfare model. However, subsequent turn of events was to prove these policies to

be seriously flawed a failure worldwide. Only a decade later, the government was

advocating the privatization of everything under the sun. Superficially, it seems to

be an open and shut case of a poor strategy corrected after it was proven wrong.

Pakistan Telecommunication Corporation was established in Dec 1990 to take

over the functions of the Pakistan Telephone and Telegraph Department. Its

operations were governed by Pakistan Telecommunication Corporation Act 1991.

In 1991 GOP announced its iment to privatize PTC and appointed a financial

advisory team led by Bear Steams and Coopers & Lybrand based on whose

advice decided to sell the 26% stake of the share capital, with management rights

of PTC by converting into a limited company under the provisions of Companies

Ordinance 1984.7

PTCL CURRENT ASSESMENT:

o The head quarters of PTCL are at Islamabad.

o The total number of employees at PTCL is around 55000. The data is

from four provinces (Sindh, Balochistan, Punjab, and NWFP), and four

federally controlled areas (Islamabad, Northern Areas, Azad jammu &

Kashmir and FATA).

o Total installed lines:

o Total working connections:

o Percentage digitalization:

o Universal Access Network:

o Mobile Telephone Base:


P.T.A

PTCL ISP Companies

Sat Phone Co.

Ufone Mobilink Paktel Insta Warid Telenor


o Toll Free (0800 operational) Customers:

o Internet Customers:

o Universal Internet Number(UIN):

o Nation Wide Direct Dialing Stations:

o Country Teledensity:

P.T.A

Pakistan Telecommunication Authority, working under the supervision of

Ministry of Science & Technology, is a Government Organization, established

under Pakistan Telecommunication (Re-organization) Act 1996. PTA is working

as a corporate body to regulate the telecom sector.8 All the mobile phone

operators and PTCL follow the rules & regulations of PTA, which look after

keep a check on all land lying (if some company other than PTCL launches its

operation) and mobile phone companies. The headquarter of PTA is in

Islamabad. All sorts of licenses related to telecommunication sector are granted

by PTA. The setup of the telecommunication sector in Pakistan can be

understood from the following figure

Figure: 2.1 Setup of Telecom Sector In Pakistan



OVERALL CELLULAR PHONE INDUSTRY IN PAKISTAN:

The introduction of the cellular phones in Pakistan is almost 12 years old. So it

can be said that it is the growth stage of the industry life cycle which is expanding

day by day. The number of subscribers has been increased with a huge ratio and

still increasing every day and lots of opportunities for the players for growth

through horizontal integration i.e. by expanding the firm’s business into other

geographical locations.

Pakistan is the very attractive market for the mobile phones. There are over 3

million active mobile phone users. Most of these customers belong to the key

cities like Karachi, Lahore, Islamabad, Peshawar, Faisalabad etc. but now with the

increase in the networks of the mobile companies in the different other big and

small cities and the rapid decrease in mobile service charges, the ratio has also

increased in the small cities too. A large market is still lying untouched and

waiting anxiously to get the cell phone because of the fact that with a mobile

phone in hand one can expand its business operations and remain in touched with

his business all time. According to P.T.A the number of cell phone subscribers is

expected to reach 15 million during next two years. A potential demand of around

25 million subscribers till 2018 is required to be satisfied in the country. P.T.A

has so far issued 178 licenses for various telecom services, 90 licenses for



Wireless Local Loop (WLL) to 15 companies for all 14 telecom regions of the

country. Besides this, 76 Fixed Local Loop (FLL) licenses have been awarded to

34 companies and 12 Long Distance & International (LDI) licenses awarded to

different companies. Some of the companies which have won the WLL licenses

include M/s.Telecard, M/s.Burraq Telecom, M/s.DV Com, M/s.World Call,

M/s.Warid WLL, M/s.Microtech Link and others. PTA will issue as much as 108

WLL licenses to 20 companies which have won the spectrum through open

bidding in August this year. The Authority received Rps. 14.121 billion against

the spectrum price. After successful completion of phase-one of the deregulation

process, PTA has also invited applications from Pakistani and foreign companies

for the grant of Local Loop (LL) and Long Distance & International (LDI)

licenses for all PTCL regions excluding Azad Jammu & Kashmir and Northern

Areas on open and unrestricted basis.*

At present there are four mobile companies operating in Pakistan and the

upcoming new foreign companies will commence there activities soon, as they are

in process to establish their setup. The present companies are Paktel, Instaphone,

Mobilink, & Ufone.

A brief discussion about these companies is as under;

PAKTEL

Paktel is the first company that introduced the mobile phones in Pakistan. Started

its operation in 1989, Paktel entered the Pakistani market with a huge investment

Cable and Wireless, an American based company. Being pioneer in the mobile

phone industry, Paktel at one time became a generic name for mobile phones like

Coke. It has recently upgrade its network to GSM and brought a big investment in



its brand and marketing setup. Some facts and figures about the company are as

under;

Year and first city launched: 1989, Karachi Number of cities with services: Over 160 Number of exchanges or switches: 3 Switching Centers Technology used: GSM Market share: 6% Head Office: Islamabad

A great change in the history of Paktel is its merger with Instaphone whereby

Instaphone parent company Millicom purchased 97% shares of the Cable &

Wireless and owned Paktel.

INSTAPHONE:

An aggressive company with very effective marketing strategies, Instaphone

proved to be a customer friendly company by introducing variety of attractive

packages. Instaphone’s prepaid package INSTAONE has been a very popular one

till a few years back. Being a first ever prepaid mobile phone system, INSTAONE

became a generic name for the prepaid card system of mobile phones. Due to the

congestion problem in network, the popularity of it is gradually decreasing and if

we take the competitive market of today & the technological advancements in

GSM, it seems to be very far away from others. Instaphone is the brand name of

Pakcom Limited., a subsidiary of Millicom International Cellular. MIC operates

30 cellular networks, carrying out its business in more than 60 countries

worldwide. After taking over Paktel, the top management of Instaphone now

looks after the operations of Paktel also, as the new arrival of Paktel with GSM

technology needs a much more look over. Some facts and figures about the

company are as under;



Year and first city launched: 1990, Karachi Number of exchanges: 3-Switching Centers Number of cities with network coverage: 185 Technology used: DAMPS (Digital AMPS) Number of active subscribers: Over 600,000 Market share: 8% Head Office: Islamabad

Officially the merger of Instaphone and Paktel took place in sep.2000. As a new

setup, Pakcom has appointed franchises for Instaphone and Paktel for sales,

customer care and billing. These franchises are run by private investors. Majority

of the franchise holders are the ex-dealers of either

Paktel or Instaphone. So far Paktel franchise is known as Paktel Point and for

Instaphone is the Insta Sales, supervised by the territory managers of Pakcom.

MOBILINK:

Before the introduction of the Paktel GSM, Mobilink was the only direct

competitor of Ufone, interms of technology. Mobilink is the first company that

introduced GSM technology in Pakistan. Mobilink is the joint venture of

Motorola and Saif telecom, operating under the supervision of Motorola, a well

known manufacturer of the computer related parts e.g. hard disk and pagers and

mobile phone hand sets etc. Motorola is also the service provider company for

communication in many countries.

Mobilink gradually captured the market by emphasizing on advertising the basic

features of the GSM technology e.g. security against scanning and voice quality.

Later on by its prepaid packages like JAZZ, Mobilink rapidly captured the market

share. Before the CPP (calling party pays) system, the incoming calls were

charged to the subscriber of the mobile phones. JAZZ came up with a promotion

of free incoming calls for a limited time. It generated a record sale for the



company. With another facility of LNO (late night option) in which the out going

calls made between 10:30 pm to 06:30 am were not charged, sale of postpaid

packages also increased considerably. People with one postpaid LNO at one end

and a prepaid JAZZ connection at the other end used to talk for free for the whole

night. The JAZZ connections were than stopped by the company and it took

almost one year before they were opened again with incoming calls being charged

to the customers. But now it has remitted all charges on incoming charges from

any country in Pakistan and also made every call a local call to any Mobilink

connection all over Pakistan. Mobilink has also introduced the new phenomenon

of blending the prepaid and post paid connections in the form of a postpaid

package known as Mobilink Indigo where you can control the budget of a

postpaid connection by uploading a scratch card balance. It provides the

opportunity for the Mobilink customers to enjoy the postpaid facilities with a

controllable budget. With very new and different ideas of marketing, Mobilink

remains the Market Leader for the mobile phone industry. Some facts and figures

about the Mobilink are as under;

Date of launched and first city: August 1994 Lahore Number of cities with network coverage: Over 350 Cities Technology used: GSM Number of active subscribers: Over 10 Million Market share: 50% Head Office: Islamabad

In 1999, Motorola and Saif Telecom sold off their shares to an Egyptian company

Orascom and now Mobilink is 100% owned by Orascom. As a new setup,

Mobilink has also appointed its franchises countrywide. These centers provide the

facilities of sales, service and billing.

UFONE VS COMPETITORS:



Broadly categorizing and keeping technology in view as a major factor, Ufone has

direct and as well as indirect competitors. The term direct and indirect refers in

terms of the technology used. Formally, Mobilink was the only direct competitor

but now Paktel with GSM technology also became the direct competitor.

Whereas, the Instaphone comes under the indirect competitor. The number of

direct competitors are yet to get increased by the arrival of new companies like

AL-WARID &

TELENOR:

The table and diagram reveals the market share of each company:

Table: 2.2 Market Share of different Cellular Companies

Name of the Company Number of Subscribers Market Shares

Mobilink Over 10 Million 50%

Ufone 5 Million 23%

Paktel Over 500,000 6%

Instaphone Over 600,000 8%

Others Over 1,200,000 13%

Figure 2.2 Market Share of the 4 Cellular Companies



2.3 HISTORY OF MOBILE TELEPHONES:

The mobile phones are basically the result of the combination of two of the

greatest inventions of the history i.e. Radio & Telephone. The afterwards

developments gave birth to different types of wireless devices. Police started

using two way radios as early as 1921, which were named Wireless or Walkie-

Talkies and are still used for variety of applications. Some of the disadvantages or

limitations of these devices include half duplex sound, one person can talk at one

time, push to talk, limited range and limited frequency.

In 1977, first license for AMPS (Advance Mobile Phone Syatem) network was

granted to IIImots Bell Telephone in Europe. Mobile phones rapidly started

making their place in various countries with every country using its own type of

network technology. (AMPS, TACS, CNET, NMT etc.)9

EARLY TRENDS AND DEVELOPMENTS:

First cellular networks were introduced in late 70s, these were basically analogue

systems having lots of limitations and deficiencies including voice quality,

security of the communication etc. however, different standards in different areas

of the world were being used e.g.

Four different standards in USA.

A variety of standards in Europe.



Another standard in Japan.

All these standards were incompatible and ineffective. US allowed

growth of different standards to encourage a free market and innovations. The

Europeans however got together in early 80s to develop a common pan European

standard.

THE GSM SUCCESS STORY:

Group special mobile or GSM was the standard in mobile phones adopted by

Europeans. The objective, as mentioned earlier, was to provide a wider market for

mobile phone operators.

The first GSM network was introduced in Europe in 1981. later on this standard

expanded quickly to become the premier world standard and thus GSM got the

meaning as Global System for Mobile Communications.

The GSM proved to be the robust technology soon after its introduction due to its

major features like:

Security against the scanning and cloning.

SIM (Subscriber Identification Module) card facility enabling the

customer to store his valuable data.

Freedom to change the handset and shift the database easily.

Seamless connectivity worldwide through international roaming with

same number contact ability.

Near wire like sound quality.

Economies of scale.



So all these factors made possible for GSM to become the only leading standard

for mobile phones. Therefore now;

o 55% of the global cellular market (380m) uses the GSM standard.

o 500 organizations in 158 countries offer GSM.

o 4 new customers are added every second.

o 1 out of 16 people in the world has a GSM connection.

o 1 billion subscribers were expected by 2005.

o In 1999, PC growth rate was 22% while GSM growth rate was 77%.

3G AND SATELLITE TELEPHONY:

3G or third generation, the third step from analogue to the latest one is based upon

the GSM platform.

1st Generation

Analogue.

2nd Generation

Digital. 0110000010100111

3rd Generation

Mobile Multimedia.

3G is a quantum leap in available capacity. It provides the ability to transmit high

volumes of data along with voice thus making the cell phone a mobile device with

video and internet services. It is possible to download data at breath taking

speeds. Licenses for 3G have been issued in Europe. OK raised approximately

$30 b through 3G licenses. Everyone seeking the license wants to concert the



explosion in data traffic into revenues. Having already committed themselves to

spending more than $30 b on their licenses and seen their share prices and credit

ratings slide as a result. West European operators are now facing up to the need to

spend roughly as much again on infrastructure --- with more big sums to come in

areas such as marketing and sales. The satellite telephony, another milestone,

entered into the world of communication because the cellular coverage as a

percentage of Earth’s area is still small. Coverage through the satellite gives a

global footprint.

2.4 MANAGEMENT REVIEW:

REGIONAL SET UP

There are three functional switching centers of Ufone in cities Islamabad,

Lahore and Karachi. As a common practice and for monitoring the performance

effectively, the country has been divided into three regions, North, Central and South.

The following figure shows the regional setup and the cities included in the regions.



Figer: 2.3 Regional Setup of Ufone

Head Office Islamabad

North Central South

Peshawar-Jehlum Jehlum-Punjab (end) Karachi-Sindh (Interior)

Ufone

Customer Service Center

Franchise Franchise Franchise

From above figure it is clear that there is a centralized system of organization

structure of Ufone. All the regions and the cities with are under the command and

supervision of headquarter.



CHAPTER -3

ANALYSIS

3.1 ANALYSIS OF SALES PROMOTION ACTIVITIES:

Sales promotion consists of a diverse collection of incentives tools, mostly short

run, designed to stimulate quicker and greater purchase of particular products/

services by customers.1

Ufone is a service oriented firm and it target different promotion activities in short

or long run e.g. sales promotion, business promotion etc. it is difficult to cover up

all the activities done by Ufone at once but the major promotion activities which

had come up with outstanding and satisfactory results are;

SALES PROMOTION ACTIVITIES:

Ufone being a service oriented firm mainly focus on the sales promotion

activities. The major sales promotion activities undertaken by Ufone are;

FREE CONNECTIONS:

Ufone come with a very bold decision in promoting its brand by offering free

connections to the people in different big cities like Peshawar, Islamabad,

Karachi, Lahore, Rawalpindi, Faisalabad, Haiderabad, etc. at the occasion of

independence day of Pakistan from 14 august till 17 august for three days. This

was a very big surprise for the people of these cities as no mobile company had

come up with such a major decision ever. People greatly appreciated this step and

rushed to the Ufone customer centers and dealers outlets. This activity resulted in



500,000 new customers for Ufone and the biggest ever recorded sale of its scratch

cards which has increased by 60%. This activity not only resulted in its product

promotion but also the promotion of Ufone’s business. But the big flaw in this

activity, which the management never realized before was the management of the

crowd. The panic created by the people in order to get a connection resulted in the

destruction of the Ufone office in Peshawar and also the injuries of the most of

the employees. This also resulted in frustration of many people who didn’t have

the connections. Ufone management should have done different precautionary

arrangements before announcing this campaign.

DECREASE IN CONNECTION CHARGES:

After offering free connections, the second major decision taken by the Ufone

management was the decrease in prices for the new connection as it has always

been consistent in gradually decrease in its connection charges with the decrease

in Govt. Tax. Now Ufone is charging only 199 Rps for a connection. This has also

brought a revolutionary increase in its customer base.

DECREASE IN TARIFFS:

Ufone has also decrease its tariff for outgoing calls. This is also a good step in

giving its customers a relief from the big charges for the different calls made. In

the first step it has decreased these charges from 5.70rps/ minute to

4.70rps/minuteOn 5th February 2005, Ufone came up with another major step

decreasing the call charges from Ufone to Ufone up to 3 Rps/minute & with a late

night option of 1.30 Rps/minute after 10pm. This is another great step by Ufone

management in promoting its product.



REMOVAL OF ROAMING CHARGES:

Ufone in response to its competitors has also come up with the removal of all the

roaming charges throughout the country. Now with zero balance one can attend a

call from any city of Pakistan. This is also a major step in promoting its sales and

people visiting the customer care greatly appreciated this decision which has

resulted in the greater brand loyalty of the Ufone customers.

SPECIAL PACKAGE FOR MMS:

Ufone is now mainly focusing in attracting new customers by promoting its Value

Added Services like Multi Media Messaging (MMS) and GPRS as it’s the only

mobile company offering these services. Ufone in collaboration with United

Mobile (a mobile set selling company) has offered free 50 multi media messages,

free activation of the MMS service and a free Ufone connection on the purchase

of a MMS enabled set from the any outlet of the company or temporary stalls

arranged for this purpose in different areas. This is also a good step in attracting

youngsters as they are more interested in these sorts of things.

FREE ACTIVATION OF GPRS AND MMS SERVICE:

Ufone till now was offering the free activation of its GPRS and MMS services

with the free settings in the customers’ mobile set’s configuration at any customer

acre center or through call center. But now these services are offered on the

payment of only 70rps at the customer service centers.

PRIZES:



Ufone also announce different cash prizes contest for its customer on different

occasions like Eid, Cricket matches etc. These prizes are usually given to those

customers who have the MMS service. Like on Eid ul Adha , the Bakra contest,

where customers could win a cash prize of 100000 Rps. The cricket contests on

different big matches of Pakistani team.

PUBLIC RELATIONS:

Public Relations (PR) is another important marketing tool. Not only must the

company relate constructively to its customers, suppliers, and dealers, but also

relate to large set of interested public. A public is any group that has an actual or

potential interest or impact on a company’s ability to achieve its objectives.2

Ufone also gives an important emphasize on establishing and promoting its PR. It

is always in touch with its customers through its customer service centers and

dealers. The different tools Ufone uses in promoting its PR are;

EVENTS:

Companies can draw attention to new product or other company activities by

arranging special events or sponsoring many. These events include concerts,

sports tournaments, contests and competition etc. Ufone has always been ahead in

arranging and sponsoring many events like Cricket matches of Pakistan team,

Basant festivals in Islamabad and Lahore, Annual Animal shows in Islamabad,

Musical Concerts taking place in different cities etc.

NEWS:

One of the major tasks of PR professionals is to find or create favorable news

about the company, its products, and its people. A good PR media director



understands the press’s needs for stories that are interesting and timely and for

press releases that are well written and attention getting. Ufone always gives

special attention towards these and have come up with many interesting ideas.

Like on the removal of roaming charges, Introduction of MMS and GPRS first

time in the market, Ufone has tried its level best to take advantage of this

opportunity and make people aware of these in best possible way.

IDENTITY MEDIA:

In an over communicated society, companies have to compete for attention. They

should strive to create a visual identity that the public immediately recognizes.

This is carried by company’s Logos, stationary, brochures, signs, business forms,

cards, building, uniform and dress codes etc. Ufone has been ahead in arranging

all these tools for it promotion.

3.2 CRITICAL ANALYSIS:

Strategy formulation is often referred as long term planning. The process is

primarily analytical not action oriented. Thomas and David in their book

“strategic management and business policies” write: “Formulation process is

concerned with developing a corporation’s mission, objectives, strategies and

policies. In order to do this, strategy makers must analyze the corporation’s

strategic factors. (Key Strengths, weaknesses, opportunities, and threats) in light

of the current situation”3. Ufone is comparatively a new organization in the

mobile industry but its over all performance is excellent in terms of meeting the

sales targets and maintaining the quality of its services. Thus it won the trust and

confidence of its customers and increased its goodwill with effective marketing

strategies. A review of the management, organizational, marketing, accounting,

and financial and information system shows satisfactory results.



UFONE WITH A PROPITIOUS NICHE

William Newman suggests that a corporation should seek a propitious niche in its

strategy formulation process. Wheelen and Thomas elaborate this in detail by

explaining this niche. They say, “This niche is a corporation’s specific

competitive role. It should be so well suited to the firm’s internal and external

environment that the other corporations are not likely to challenge or dislodge it.

The corporation thus has a distinctive competence that enables it to take

advantage of specific environmental opportunities”.4

Finding such a niche is not always easy. As firm’s management must be always

looking for strategies windows that is market opportunities. According to a study

of high performing, mid-sized growth companies, It was found that these

successful corporations have four characteristics in common.

They innovate as a way of life.

They compete on the value not price.

They achieve leadership in niche markets.

They build on their strengths by competing in related niches.

In summary, research reveals that corporate performance is strongly influenced by

how well a company position itself within an industry. A specific niche in which a

corporation’s strengths fit well with environmental opportunities is thus a desired

outcome of situation analysis and a valuable means for a corporation to gain

competitive advantage. Before going further here is an example which has a close

relationship with the propitious niche of Ufone.



EXAMPLE:

Fadal Engineering Company Finds a Propitious Niche

The machine tool industry in 1990 was not a very attractive enterprise for most of

the U.S. companies. Led by Japanese corporations, importers were responsible for

43% of the $4 billion industry. U.S. companies such as Cincinnati Milicron and

Gidding & Lewis had been successful by catering to multi billion-dollar

customers like Caterpillar and Boeing, but were also threatened by foreign

competition. All in all, this did not appear to be a good industry for a small family

run business.

When Francis de Caussin, a Detroit machinist, moved his famiuly to North

Hollywood, California, in 1953, he formed a company whose name was the

acronym of the first intials of the founder and his sons Adrian, David and Larry:

Fdal Engineering Company (pronounced fuhdal). From their garage, the family

built a business by making high precision machine parts. Early in the 1980’s the

family branched into the machine tool business. After considerable work, they

made a no-frills vertical-machining center to drill, bore and mill metal pieces.

Compared with the machine tools made for the big manufacturers, Fadal’s

machine had fewer parts and simpler electronic controls.

The company soon expanded into another machine tools that were designed to

appeal to smaller manufacturers that could not afford the more sophisticated,

complex machines made by larger outfits. The machines made by Fadal were

functional and durable, but far cheaper than the typical lowest priced competing

machine. Since Fadal generally used U.S. made standard parts, repairs were

usually a simple matter. By 1990, Fadal’s sales reached the $80 million range, ten



times what they were in 1985. The company controlled nearly 20% of the $400

million metal working machine market tailored to the needs of small

manufacturers.

Why was a small family-run machine tool maker successful in a relatively

unattractive industry? Given its small size and the fact that existing competition

was ignoring the small manufacturer’s needs, Fadal took the advantage of the

market opportunity. The company designed products with a minimum of parts and

frills, making its machines inexpensive and reliable. It kept overhead low, R&D

was minimal. Only 20 of its 200 employees were salaried. The company has

prospered. According to Adrian de Caussin, the eldest brother and Fadal’s

electronic chief, “we have vigor. Big, old time toolmakers have lost that and if

lose ours, we’ll go the same way.”5

As discussed before Ufone mostly targeted the prospects with the lower income.

In its advertisements on TV, students, taxi drivers, mechanics, businessmen,

housewife, people working abroad away from their homes, people in rural areas

etc were targeted. Another emphasize in these advertisements was the

connectivity of Ufone service which was a major issue and lots of problems in

this regard were faced by other companies. Here can be found a major

relationship between Ufone and above mentioned example. Ufone claims of being

inexpensive and reliable and this is basically the propitious niche of Ufone.

3.3 SWOT ANALYSIS:

SWOT analysis is a mean of summarizing a firm’s strategic factors. 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.6



Table 3.1 TOWS Matrix for Generating a S.W.O.T.

Internal

Factors

(IFAS)

-----------------------------

External

Factors

(EFAS)

Strengths (S)

-----------------------------

Line 5-10 Internal

Strengths here

Weaknesses (W)

-----------------------------

Line 5-10 Internal Weaknesses here

Opportunities (O)

-----------------------------

List 5-10 External

Opportunities here

SO Strategies

----------------------------

Generates Strategies here that use Strengths to

take advantage of Opportunities

WO (Strategies)

-----------------------------

Generates Strategies here that use Strengths to

take advantage of Opportunities by over coming weaknesses

Threats (T)

-----------------------------

List 5-10 External Threats here

ST ( Strategies)

-----------------------------

Generates Strategies here that use strengths to

avoid threats.

ST ( Strategies)

-----------------------------

Generates Strategies here that minimize

weaknesses and avoid threats.

Source: Adapter from H.Weihrich, “The TOWS Matrix-A Tool for Situational

Analysis,” Long Range Planning (April 1982), p.60 Copyright © 1982 by

Pergamon Press.



SWOT ANALYSIS OF UFONE:

STRENGHTS WEAKNESSES

* Connectivity * lengthy procedures for decision making

* System Up-gradable * SMS problems* PTCL & Govt. support * Lack of R&D department* Best available system * Limited staff at Customer center * WAP * Connectivity problems at

Peak timings * Multi Media Messaging * Limited capacity at Call

center* GPRS * Call drops* Latest and tested equipment * Connectivity problems in

GPRS* Public support being a Pakistani firm* Strong Marketing wing* Experienced top management.

OPPORTUNITIES THREATS

* Rapid growth in mobile Industry * Privatization policy

* Many potential cities still waiting * Upcoming foreign

for mobile service companies

* Reduction in tax on mobile phone * Satalite Phones

connections

* Car tracking system *Political Unrest and

Terrorist activities in

Pakistan

* Potential market of Afghanistan



PROPOSED CORPORATE STRATEGIES FOR UFONE SO

STRATEGIES

Launch of mobile service in many cities where mobile service is not

available and PTCL exchanges are already present.

Introduction of WAP and internet available sets in collaboration with any

mobile set company like NOKIA.

Sustain “Penetration price” strategy. It will enable the company to have a

lead from other companies and gradually the company will become the

market leader.

Start negotiating with Afghan Govt. to establish a subsidiary or joint

venture over there.

WO STRATEGIES:

Get hold of present Ufone cities and make sure that the sales of

connection remains continued as in present.

Restructure the customer service center and appoint new skilled staff to

improve customer satisfaction.

Introduce more and attractive packages for new and existing customers

with reduction in tariffs.

Reduce the charges for GPRS and MMS.

ST STRATEGIES:

Engage the dealers of others companies and free lancers to sale Ufone

connection and reward them with attractive packages.

Invest more in social welfare activities.



Arrange programs, functions, and seminars in favor of Govt. to attract it

for more investment in IT & mobile sector.

Arrange programs in favor of peace and stability in economic

development of Pakistan.

Pursue “meet the competition” pricing strategy.

WT STRATEGIES:

Give more authority to the authorized dealers and engage them in others

activities e.g. SIM change, Sale of scratch cards and activation of GPRS

and MMS.

Improve the quality of service at service centers or just close down the

customer service centers and appoint the staff at dealer’s offices. It will

reduce the fixed cost.

Merge with the upcoming foreign companies to expand its network and

utilize their experience to become the market leader.



REFERENCES

1. Marketing Management by Philip Kotler (1994) Published by Prentice-

Hall International, Inc New Jersey. P 664.

2. Ibid P. 671

3. Ibid P.678-679

4. Wheelan Thomas L. and Hunger D.J. (1992). Strategic Management and

Business Policies. California: Addison Wesley Publishing Company

P.156

5. Ibid P. 162

6. Ibid P. 161

7. Ibid P. 162

8. Ibid P..159



CHAPTER -4

FINDINGS AND RECOMMENDATIONS

By interviewing different people, users as well as non users of the mobile phone

in order to find out the general opinion of the people in terms of advantages and

disadvantages of the mobile phone, revealed following interesting facts;

ADVANTAGES:

An easy way to remain in touch with the business, family and friends.

A symbol of modernism.

Entertainment device.(Games, messages)

Cheap way to give any message through SMS

A show off device.

A sense of security and satisfaction.

A solution to talk to a friend/girl friend at any time.

Schedule developer device.

A device to access internet through GPRS.

A device to exchange multi media messages through MMS.

DISADVANTAGES:

Wastage of money.

Lack of privacy.

One of the causes of stress.

Injurious to health (harmful electromagnetic waves)

Uneasy to carry all time.



Worry of being lost or theft.

Causes of accident due to the diversion of concentration while driving.

FINDINGS:

Ufone acme up with an effective marketing strategy which introduced it as

a good mobile phone company in general public.

An affordable mobile phone service being inexpensive and reliable.

GSM technology with latest systems and equipment.

The company believes in quality not quantity.

For technical support and assistance, the mobile phones companies

especially GSM, depends entirely upon foreign companies.

In Pakistan the land lying phone industry is at the stage of low

attractiveness.

Ufone is been warmly welcomed by general public because of being a

Pakistani company.

RECOMMENDATIONS:

Business plan must be reviewed on pre-defined times to change the

strategies or take corrective actions. Ufone should also make quick actions

in terms of change in market actions and change in competitor’s strategies.

Ufone should excel in technical side of the cellular phone industry so that

in future it has to depend little on foreign firms and consultants.

Decision making process should be made swift and easy in other to avail

the opportunities on time.

Ufone must sustain its niche of being inexpensive, reliable and economical

and it must maintain its prices as low as possible in future.



In future the company must upgrade its quality of service with time and

must make it sure that the service quality remains good.

It should make its dealers confidence in the company stronger and reward

them on showing good performance.

Restructuring of the customer centers is required because of many

problems faced by the customers while visiting any. A plan is proposed

for resolving this problem.

PLAN FOR REORGANIZING THE MANAGEMENT ATCUSTOMER

CENTERS:

As it is discussed earlier in chapter.02 that the customer care center has a very key

role in polishing and strengthening the company’s image and goodwill in

customers mind. Company is in direct contact with the customer through these

outlets. No matter Ufone has a wide network of customer care centers in cities

with the mobile phone service with efficient and well trained staff. But many

deficiencies were observed at these centers. A few important one’s are;

o Limited staff with respect to burden of work.

o Un-equal distribution of work among representatives.

o No refreshment breaks for staff members during tough working hours.

o Appointment of un-skilled workers.

Due to these deficiencies a panic situation is usually observed during peak

timings. Due to which customers as well as staff members face many problems.

As the burden of work has increased due to the rapid increase in the customer

base of Ufone, customer care centers requires few changes in the style of work

they are up to.



Few recommendations are given below for resolving these problems;

Increase the number of customer center representatives at places where the

daily visitors are much high.

Prepare a proper schedule having suitable short breaks for the employees

to refresh which will make employees enjoy their work and their

concentration.

End the sale of scratch cards to sellers at customer centers and ensure that

the sale is done only through the sale staff in the market. This will

decrease the number of people visiting customer center every day.

Reorganizing the staff and categorizing different activities separately like

sale of connections, SIM change etc.

Create different counters for separate group of activities and appoint

separate staff who can do the job more efficiently.

The different kinds of counters which are suggested to be created are

in the form of;

COUNTER 1:

This counter should deal the sale of connections only. As it is not a difficult task,

so only one person is enough to handle it.

COUNTER 2:

This counter will deal in different queries about the MMS and GPRS only like the

activation, deactivation, customer information etc. the number of representatives

here may vary from 1-2 according to the requirement.



COUNTER 3:

The representatives at this counter will deal only in the SIM related issues e.g.

issuing new SIM, customer verification, blocking and unblocking of service etc.

COUNTER 4:

This counter will deal only in the balance adjustment and other related issues like

restoration of balance in case of balance drops, approving security waivers,

adjusting customer security deposits etc.

The distribution of work will reduce the burden of work and customer’s wastage

of time. By this way the customer centers will also become more efficient and

quick. This will also increase the company’s goodwill and customer trust in the

firm and its service and thus make the brand loyalty stronger. This re-organization

can also be presented in the form of chart given;


Manager

Incharge Customer

Care

Incharge Finance

InchargeSales

Incharge Eng& IT

Sales Officer

Finance Officer

Finance Officer

Sales Officer

CCR CCR

Assist:Officer

Assist:Officer

CCR CCR

Counter1

Counter4

Counter2

Counter3


Figure: 4.1 Reorganization of Customer Care



REFERENCES

1. Interview from different peoples, users as well as non users of mobile

phones. Dated : January 12, 2005.

2. Interview from Mr. Naeem Dad Khan, customer care representative,

Rawalpindi. Dated : January 20, 2005.



CHAPTER -5

CONCLUSION

5.1 CONCLUSION:

Ufone has showed a remarkable performance up till now. Achievement of

5 Million customer base till now is an appreciating figure to be proud off.

Extending its coverage to over 180 cities in short time of about 7 years is an

outstanding achievement. With an effective marketing plan, it has introduced

mobile as an affordable device in reach of a common man. It has also taken the

full advantage of Govt. support to cellular industry and provided the benefit to its

customers of low connection charges, reduce tariff rates, latest technological

advancements etc. but there is still a lot to do. There are still a lot of potential

customers & Ufone has a better opportunity to get maximum of them due to

increase in its popularity among general public as an economical service. P.T.A

has awarded licenses to several foreign companies and two new operators of

cellular industry are expected to commence their operations this year. It will bring

a tough competition in the market. So it is recommended for Ufone to sustain its

niche of being inexpensive and reliable. There is also a need of new and a

strongly reviewed marketing plan to hold strong grip on the market. Ufone should

also try to come over its weaknesses as soon as possible. There is a much need of

a Research and Development department in Ufone. So that it could quickly find

out the market opportunities to grab them and needs to change in its marketing

plan on time. This will help it to become the market leader soon in future.




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