competitive analysis of gsm based cellular services providers in pakistan using house of quality
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Competitive Analysis of GSM Based Cellular Services Providers in Pakistan Using
House of Quality.
Imran Ghafoor Chaudhry
Department of Management Sciences
COMSATS Institute of Information Technology, Islamabad, Pakistan.
imran_g@comsats.edu.pk
Dr. Qasiar Abbas
Department of Management Sciences
COMSATS Institute of Information Technology, Islamabad, Pakistan.
qaisar@comsats.edu.pk
Muhammad Bilal Butt
Department of Engineering Management
Center of Advanced studies in Engineering, Islamabad, Pakistan.
bmehmood_kp@hotmail.com
Khalid Abbas Gondal
Department of Engineering Management
Center of Advanced studies in Engineering, Islamabad, Pakistan.
khalidabbas_gondal@yahoo.com
Muhammad Khurram Riaz
Department of Engineering Management
Center of Advanced studies in Engineering, Islamabad, Pakistan.
khurram_riaz78@yahoo.com
Abstract
The Telecom sector all around the world and especially in Pakistan has experienced a tremendous growth in the
last few years. However, through our research we have identified a shift in the buying pattern of the cellular
services subscribers as they are now becoming more conscious of the quality of services (QoS) which are being
offered to them rather merely the availability of economical packages.
We have used the House of Quality model to ascertain the level of quality consciousness among the
customers/firms and how these firms are undertaking quality related initiatives to create differentiated
products/services for one of the rapidly growing market. It is also one of our main findings that more engineering
efforts are required of the cellular services providers as far as following the rules & regulations, voice quality
and expansion of network is concerned.
Keywords: QFD, House of Quality, Cellular services provider, QoS and Pakistan.
2
I. Overview of Cellular Services Providers
The telecommunication sector of Pakistan was awarded the status of industry in 2005 and since then it has
been one of the fastest growing sectors of Pakistan quite eminent from various factors such as the mobile
density reaching 52.87 in April, 2008 and the number of mobile subscribers reaching 85 million. (Source:
Pakistan Telecommunication Authority, Annual report 2007-2008).
Figure: 1 Cellular Mobile Projection
(Source: Pakistan Telecommunication Authority Annual Report 2007-2008)
This has been a trend in all of the developing economies of Asia and also in the South Asian region where the
mobile penetration is highest in Pakistan.
Table 1: Mobile penetration of Regional Countries (%)
(Source: Pakistan Telecommunication Authority Annual Report 2007-2008)
The cellular service sector is now contributing more than 2.0% of Pakistan’s GDP and annual GST/CED
collections from this sector was 8.89 billion rupees during Jan-Mar 2008 (Pakistan Telecom Authority, 2008).
And at the same time Foreign Direct Investment has been the highest in the Telecommunication’s sector of
Pakistan reaching to almost 35.6% in 2006-2007.
Table 2: FDI in Pakistan Leading sectors Including Telecom Sector
(Source: Pakistan Telecommunication Authority Annual Report 2007-2008)
3
One reason that can be attributed to such an enormous influx of FDI in the Telecom Sector of Pakistan has
been the de-regulation policy adopted by the Pakistan Telecom Authority (PTA) inviting more/new
investments by world renowned telecom/cellular services providers such as Eitalsalat, Warid, Wateen,
Orascom, China Mobile and etc.
Figure 2: Investment by Cellular Mobile Operators (2006-2007)
(Source: Pakistan Telecommunication Authority Annual Report 2007-2008)
The annual gross revenue (recent & forecasted) of the cellular companies again shows that the Mobilink will
continue to show its domination and will continue to earn many times more than its competitors.
Table 3: Total Revenue by Mobile Operators 2004-2007
(Source: Pakistan Telecommunication Authority Annual Report 2007-2008)
II. Model
Although Quality Function Deployment (QFD) does not result in reduction of the product development time
but it does helps in the development of better product resulting in better customer satisfaction (lager, 2006).
Various researchers have analyzed the use of QFD in better product development such as Barry & Gabriel
who studied the application of QFD for interactive games development. At the same time it is been studied
that the structured processes like QFD have been used to identify and influence customer requirements (Tidd
et al., 2006).
House of Quality being a graphic tool for defining the relationship between customer desires and the
firm/product capabilities is a part of the Quality Function Deployment (QFD). It utilizes a planning matrix to
establish relation between what the customer wants and how a firm can develop products that is going to meet
those wants.
“Quality Function Deployment (QFD), as a customer-driven tool, is generally used in the early phase of new
or improved products/services design process, and therefore most of the input parameters are highly subjective in nature” (Raharjo et al. 2008). Also “QFD is a system for translating customer requirements (government
regulations, operating conditions and buyer expectations) into suitable technical characteristics and ensuring
that important ones are prioritized in the design” (David Joaquin et al. 2007). Thus it was decided to conduct
various surveys in order to obtain the data characteristics or the quality of services determinants directly from
the concerned stakeholders to be later incorporated in the model.
As the first phase of the research we have confined ourselves to the House 1 of the House of Quality where
the relationship matrix is built between the customer requirements in terms of quality of services and the steps that Mobilink is taking/plans to take to match those requirements. The same matrix is also loaded with the
information of the closest competitor Telenor in order to evaluate the competitive positioning.
4
Figure 3: House of Quality
(Source: Thomas Lager, The industrial usability of quality function deployment: a literature review and synthesis on a meta-
level)
III. Customer Requirement Acquisition
Methodology
There are different mechanisms that an organization can use to collect data. The organization can
search (solicited) for the information, or the information can be volunteered (unsolicited) to the
organization. Solicited and unsolicited information can be further categorized into measurable
(quantitative) or subjective (qualitative) data. In the solicited, measurable way we can gather the
information by customer surveys, market surveys and trade trails like working with preferred
customers, analyzing products from other manufacturers etc. We have used customer surveys
approach to determine the factors/features which contribute to the quality of services provided by
any mobile service provider.
In House of Quality the voice of customer is very important rather it is one of the fundamental
elements. To get the feed back of the customers for the House of Quality we conducted a survey. The
survey was divided into two phases. First phase of survey was regarding identification of data
characteristics and the second phase was about rating Mobilink and Telenor based on these data
characteristics.
Survey Phase I
The first phase of the survey constituted of asking cellular services subscribers regarding the
factors/features which they think are determinants of the quality of services provided by any mobile
service provider. The respondents consisted of literate people of Islamabad and Rawalpindi who
have been using any cellular services. It was an important limiter as a good level of thought process
and observation was required of the respondents.
The survey Phase-I revealed that better connectivity/reliability/Network Availability was the main
quality determinant of quality of services followed by help line/better customer support and
customized new applications. All other factor along with their weightage is given in the following
graph:
5
Figure 4: Results Survey Phase-I (Customer Requirements Acquisition)
Survey Phase II
In the second phase of the survey a survey form containing the QoS determinants identified as result of survey
Phase I and asking respondents to rate Telenor and Mobilink against the quality factors/ features. Limiter at this stage of survey was that the respondents are either subscriber of Telenor, Mobilink or of both. The results
obtained shows that Mobilink has edge over Telenor in terms of country wide coverage and otherwise as far
as other determinants are concerned Telenor has the edge.
0
2
4
6
8
10
12
14
16
Results: Survey II
M OBILINK 8 7 6 6 5 5 4 6 6 5 5
TELENOR 7 7 7 8 6 7 7 8 6 7 7
Country
wide
coverage
Internatio
nal
Connecti
Customiz
ed/new
applicatio
Better
Voice
quality
Help Line/
Better
Customer
Better
Connecti
vity/Relia
No
Hidden
Charges
GPRS
Facility
Number
Selection
Inter-
network
rates
Better
Security
Figure 5: Results Survey Phase-II (Customer Requirements Acquisition)
IV. Technical Requirements Acquisition This stage consisted of collecting data about the technical descriptors i.e. how the firm describes its quality
consciousness embedded in the future plans. A mix of interviews and surveys was used in order to obtain
these descriptors.
Methodology
To acquire the technical feedback we adopted an approach consisting of both interviews and surveys.
However, the limiter at this stage was to obtain the data from the technical team and management people
working in these firms who have a say in the organizational decision making or in process/product designing.
PHASE-I
In this phase various senior managers of Telenor were interviewed and information about quality determinants as perceived by their organization were obtained. The basic aim is to identify the technical descriptors which
then can be used to carryout the next phase whereby we evaluated the competitive positioning of Telenor
against Mobilink based on these technical descriptors. The technical descriptors identified in this phase are
listed below:
6
Table 4: Results Phase-I (Technical Requirements Acquisition)
Sr. Technical Descriptors
1 Innovative value added services 2 Improving quality of services
3
Enhanced data rates for GSM Evolution (9.6-114)kbps
4 Strictly follow the PTA security procedures
5 Install best possible billing solutions
6 Can work to provide number on will
7
5-6 International roaming partners are signed monthly
8 Voice quality monitoring via vendors
9 Aggressive approach towards expanding network
10 Mark areas where there are only outdoor clients
11 Trying to offer more economical package
PHASE-II
In this phase we distributed the questionnaires based on the technical descriptors identified in Phase I. Here
limiter was again that the respondents should be the subscriber of Telenor, Mobilink or have used both in past.
The basic idea is to ask the respondents to compare and rate the competitive ratings of the firms in question
based on the technical descriptors identified previously.
Result-Phase II
0
1
2
3
4
5
6
7
8
9
Rating
Technical Descriptors
TELENOR
MOBILINK
TELENOR 8 8 8 9 7 7 9 7 9 8 9
MOBILINK 7 7 7 9 6 6 8 6 8 8 8
Innovati
ve value
added
Improvi
ng
quality
Enhanc
ed data
rates for
Strictly
follow
the PTA
Install
best
possible
Can
work to
provide
5-6
Internati
onal
Voice
quality
monitori
Aggress
ive
approac
Mark
areas
where
Trying
to offer
more
Figure 6: Results Phase-II (Technical Requirements Acquisition)
The results shows that Telenor is ahead of Mobilink in almost all of the technical descriptors such as in
offering innovative value added services, improving quality of services and etc. However they are equal in
some descriptors such as in strictly following PTA rule and in marking & providing services where there are
only outdoor clients.
7
V. House of Quality
As mentioned earlier that because of various research constraints we have confined our research to
building house 1 at this moment. Using the information collected in the Phase-I & II of collecting
information on the data characteristics, Phase-I and II of the identification of the technical
descriptors and after doing relevant computations the house-1 of house of quality model is given
below.
Figure 7: House of Quality (House-I)
8
VI. Findings & Discussions
Step 1: customer requirements
This stage is marked by the identification of the factors or variables by the customers which defines the
customer requirements. This in fact determines the quality parameters as perceived and required by the
customers. In order to remove any bias from this process we use the Factor Rating method and using the
Survey 1 form let the customers themselves first identify the important factors/variables. Along with the identification of the variables/factors another important step completed at this stage was the estimation of the
weights of the said factors.
Using the number of responses as the basis of assigning weights we identified three important facts. Firstly all
the identified factors/variables can be divided into two groups namely features and performance. Secondly the
factors and variables with most weight age when ranked in descending order revealed that better
connectivity/reliability/availability got the most weightage by the consumers closely followed by a desire of
customized/new features, better customer support services and enhanced nation wide coverage. Third important fact that needs attention is that the customers of cellular service providers are so tuned to low
quality at economical packages that although this survey is about QoS but most of the customers still believe
that offering an economical package is still a quality factor.
Step 2- technical descriptors
In this stage it is required that technical descriptors be identified. As our base firm is Telenor so we carried out two detailed interviews in order to present before them the customer requirements and also to find out what
the Telenor is doing or plans to do to cater for these factors/variables.
After detailed discussion and analysis of the interview sessions we identified eleven technical descriptors.
These technical descriptors are:
� Innovative value added services
� Improving quality of services
� Enhanced data rates for GSM
� Strictly follow the PTA security standards
� Install best possible billing solutions
� Can work to provide number on will
� Signing 5-6 international roaming partners each month
� Voice quality monitoring via third party
� Aggressive network expansion strategy � Mark areas where there is outdoor traffic only
� Try to offer more economical package
Important point to note over here is that most of these are solutions to already existing quality related issues.
This shows that these are remedies and not prevention mechanisms.
STEP-3 Developing the Relationship Matrix between What’s and How’s
This stage is marked by establishing the relationship between customer requirements and the technical
descriptors. The basic idea is to mark the relationship as High (9), Medium (6) and low (3) depending upon
the correlation between what’s and how’s.
It is found that the strongest correlation exists between the strictly following the PTA security procedures and
other customer requirements. This was followed by the correlation between the innovative value added
services and voice quality monitoring via 3rd
party vendor. However, very less correlation exists between the
intention to work for providing the number on will and other customer requirements.
STEP- 4 Inter-relationship Matrix between HOW’s
This is the stage where we completed the hut of the house of quality be establishing cross-correlation among
the various technical descriptors. Firm carries out this stage as it helps them to identify those features that
might have more than one positive impact on the future products or services.
There are four levels of inter-relationships namely positive, strong positive, negative and strong negative. In
our research project we have find out that there again exists a very string correlation between the strictly
following the PTA security procedures and other technical descriptors. The reason is obviously the big brother
role of PTA and therefore every new policy or tactics of a cellular firm entirely depends on these guidelines
issued by the PTA.
9
Another important consideration at this stage is the relationship between the aggressive plans for expansion
and other technical descriptors. This rather shows an overall negative correlation which simply shows that
expansion of the existing network not necessarily means that the company will also improve on other quality
related issued raised by the firm itself.
Step-5 competitive assessment
Competitive assessment means the assessment of the firm and its competitor by the customers. At this stage
we carried out the Survey 2 and asked the consumers to rate the service offered by the Telenor and Mobilink
on the basis of the performance and features already identified during the Survey 1.
It has been found that Telenor is ahead of Mobilink in all performance and features accept they are equal in
offering international connectivity and Mobilink is ahead only in the offering of more country wide coverage.
This is indoubtly true as Mobilink is still offering more coverage in Pakistan.
Another important finding of this stage has been the large difference that exists in the minds of the consumers
when they compare the services of these two firms in terms of hidden charges. Consumers believe that there
are less hidden charges in Telenor packages as compared to that of the Mobilink.
STEP-6 Developing prioritized Customer Requirements
These are based on the results of Survey 1 whereby the consumers were asked to identify the most important
factors/variables that they take in consideration while selecting the cellular service provider. On the basis of
this survey we were able to compute the weigthage that customers have given to each of these required
features or performance parameters.
According to the results following are the factors along with their ranking in terms of weightage:
Table 5: Prioritized Customer Requirements
Better Connectivity/Reliability/Network Availability 7
Customized/new applications & Features 5
Help Line/ Better Customer support 5
Country wide coverage 5
Better Voice quality 4
GPRS Facility 1
Better Security 2
Inter-network rates 1
Number Selection 1
International Connectivity & SMS 1
No Hidden Charges 0
This clearly shows that the consumers give more weightage in the availability of un-interrupted services
through better connectivity and reliable network availability.
Target value
The target value cell helps the firm to identify and define its future directions. On the basis of the interviews
conducted by us with the Telenor authorities we find out that they are more concerned with the enhancement
of the existing network more than any thing else.
At the same time they feel contempt with level of reliable network, internet work rates, GPRS facility and the
level of hidden charges (if any). However the improvement of the quality of service and offering innovative
and customized features has a secondary importance.
Scale-up factor
This sub-stage tells us the level of improvement that the company requires in its product/service offerings in
comparison to the customer requirements. Here it is our finding that the customers of the Telenor requires
them to work more harder in their efforts of offering more country wide coverage, option of number selection
and especially in offering of better help line/customer support services.
10
Sales point
During our interviews we asked questions to analyze how the Telenor executives feel about the technical
descriptors they are offering or plans to offer and about the sale-ability of the customer required
factors/variables. In this regard we have observed that as far as the features are concerned offering better help line and customer support services have more attractive opportunities in the market. At the same time as far as
the performance is concerned, the Telenor executives feel that by offering better coverage, better voice quality
and reliable connectivity and network services will help them to better attract new and serve existing
customers.
Absolute weight
Absolute weight helps us in prioritizing the customer requirements by taking in consideration the importance
to customers, scale up factor and the sales point. Following are the results of the computations done by us:
Table 6: Absolute Weights
Customized/new applications & Features 6
Help Line/ Better Customer support 12
GPRS Facility 2
Better Security 2
No Hidden Charges 0
FEATURES
Number Selection 1
International Connectivity & SMS 1
Better Voice quality 8
Country wide coverage 13
Better Connectivity/Reliability/Network availability 14
PERFORMANCE
Inter-network rates 1
It is clear from the above mentioned results of computations customers are more concerned for the better
connectivity/reliability/network availability closely followed by better coverage and then by better help
line/customer support services. This is the one of the most important finding of our research project as it
clearly highlights the desire of the main stake holders namely the consumers, cellular service providers and
the PTA to offer quality services and features. This is however a main shift from the results of our earlier
research. The results of earlier research had showed more inclination of the consumers towards the desire of
economical packages as compared to the quality of services.
Step-7 developing prioritized technical descriptors
This stage is marked by the comparative analysis of the technical descriptors as being offered by the Telenor
and the Mobilink. For this another important stage we carried out Survey 3 whereby we involved only the
technical team members of the two firms in question and asked them to rate there services against the
technical descriptors already identified. The results shows that the firms are at par as far as following the PTA security regulations is concerned but Telenor is ahead of Mobilink when it comes to the rest of the customers
services and technical department technical descriptors. Following is the summary of results of the Survey 3:
Table 7: Prioritized Technical Descriptors
Customer Services Technical Department
Inno
vat
ive
val
ue
add
ed
serv
ices
Impro
vin
g q
ual
ity o
f se
rvic
es
Enh
ance
d d
ata
rate
s fo
r G
SM
Evolu
tion
(9.6
-11
4)k
bps
Str
ictl
y f
oll
ow
the
PT
A
secu
rity
pro
ced
ure
s
Inst
all
bes
t poss
ible
bil
ling
solu
tio
ns
Can
work
to p
rov
ide
nu
mb
er
on
wil
l
5-6
Inte
rnat
ional
roam
ing
par
tner
s ar
e si
gn
ed m
onth
ly
Vo
ice
qual
ity m
on
itori
ng v
ia
ven
dors
A
ggre
ssiv
e ap
pro
ach t
ow
ards
expan
din
g n
etw
ork
M
ark a
reas
wh
ere
ther
e ar
e
only
ou
tdo
or
clie
nts
T
ryin
g t
o o
ffer
more
econo
mic
al p
ackag
e
TELENOR 8 8 8 9 7 7 9 7 9 8 9
MOBILINK 7 7 7 9 6 6 8 6 8 8 8
11
Degree of difficulty
This sub stage helps the firm to evaluate that what is the degree of difficulty that the firm has to bear when it
intends to offer the technical descriptors it has planned for. It is our finding that Telenor feels that it is very difficult for them to offer the customers with a number of
their choice under the prevailing PTA rules and regulations. Another difficult task that the firm feels is to
constantly enhancing the international connectivity opportunities.
However Telenor feels that they feel at ease when it comes to follow the PTA security procedures as
compared to other technical descriptors.
Target value
Target value helps the firm to establish a base level that they have to use for comparison when they are
comparing their current level of technical offerings. The interviews that we conducted during this project have
also helped to determine the target value for Telenor.
Telenor feels contempt when they are comparing the level of current technical offerings such as the
installation of the best possible billing solutions, procedures already adopted for the provision of number on
will, voice monitoring through third party , innovative value added services, enhancement of data rates and
marking the out door traffic areas are concerned.
That means that the firm feels that it needs to work on improving the quality of services and on efforts to offer
more economical packages.
Absolute weight
The absolute weight for each technical descriptor is determined by taking the dot product of the column in the
relationship matrix and the column for importance to customers. It is our findings (after appropriate computations) that the absolute weight of following the PTA security
procedures is the highest followed by the importance of voice monitoring through the third party.
At the same time relative weight of trying to offer more economical package in the presence of quality
parameters is very low. Thus it again proves our point that there is a shift observed by us in this research from
a desire of economical packages towards quality enhancement.
Relative weight
The relative weight for each technical descriptor is determined by taking the dot product of the column in the
relationship matrix and the column for absolute weight in the prioritized customer requirements.
The pattern is the same as that of the absolute weight which is that the weightage of following the PTA
regulations is highest followed by the monitoring of the voice of quality by third party and aggressive
approach towards expanding the network.
Higher absolute and relative ratings identify those areas where engineering efforts need to be concentrated.
The primary difference between these weights is that the relative weight also includes information on
customer scale up factor and the sales point.
In short, more engineering efforts are required by the firm when they have to follow the PTA regulations,
monitoring the voice quality and the expansion of the network.
VII. Conclusion
Telecom sector is one of the growing sectors among the South Asian countries and especially in Pakistan. It is not only bringing in Foreign direct investment but also more competition for the existing services providers
forcing them to offer better products/services to its subscribers. At the same time market trends have revealed
that the subscribers are now asking for quality products/services in addition to economical packages. But it is
quite difficult to determine the determinants of quality of services (QoS).
In this research we have conducted the surveys from the subscribers in order to find out the determinants of
QoS as perceived by the subscribers themselves. The main finding of this research is that customers are
inclined towards using quality products/services rather merely using economical packages. Also as already mentioned more engineering efforts in terms of enhancing quality of services (QoS) is required as far as
following PTA rules and regulations, voice quality and expansion of network is concerned.
12
VIII. References
Delgado-Hernandez, D. J. , Bampton, K. E. & Aspinwall, E. Quality function deployment in construction.
Construction Management & Economics; Jun2007, Vol. 25 Issue 6, p597-609, 13p.
IP, Barry. & Jacobs, G. 2006. Quality Function Deployment for the Games Industry: Results from a Practical
Application. Total Quality Management, Vol. 17, No. 7, 835–856, September 2006.
Larger, T. 2005.The industrial usability of quality function deployment: a literature review and synthesis on a
meta-level. R&D Management 35, 4, 2005. Blackwell Publishing Ltd, 2005.
Pakistan Telecommunication Authority, 2008. Annual report 2007-2008. [Online]. Available at :
http://www.pta.org.pk.
Raharjo, H., Brombacher, A. & Xie, M. Dealing with subjectivity in early product design phase: A systematic
approach to exploit Quality Function Deployment potentials. Computers & Industrial Engineering; Aug2008,
Vol. 55 Issue 1, p253-278, 26p.
Tidd, J. & Hull, F.M. 2006. Managing service innovation: the need for selectivity rather than ‘best practice’.
Journal compilation 2006 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350
Main St, Malden, MA, 02148, USA.
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