A comprehensive analysis of strategies of

Orascom Telecom Bangladesh Limited

Letter of transmittal

December 14, 2011

Course instructor

Faria Rashid

Business Strategy (MGT 401)

BRAC Business school66, Mohakhali, Dhaka 1212.

Subject: Submission of the term paper on “A comprehensive analysis of strategies of Orascom

Telecom Bangladesh limited (Banglalink)”.

Dear Madam,

Here is the project report that we have completed as part of fulfilling the requirement for our

Business Strategy (MGT 401) course. This report was completed in two weeks by the

undersigned students. During this analysis we have enriched and gained experience regarding

practical aspects of SME Banking System. We believe that the report contains comprehensive

information about the strategic plan of Banglalink. We have tried our best to follow your

instructions to complete the term paper. It has been great and worthwhile experience for us to

work on this topic.

We here by submit the report for your perusal and request you to accept our report.

Sincerely yours,

Farhana Jabin peuly 08204003 ..........................................

Sumona Haque 08204016 .........................................

Marzanul Hasan 08304051 ..........................................

Rajib Roy 07304012 ...........................................

Nazmul Hasan Duranta 09204138 ............................................

Jannat Shahria 09104075 .....………………………...

Acknowledgement

We would like to thank Mr. Quazi Abid-ur-Rahman, Accounts Payable Officer from

Accounting & Finance department for helping us with the relevant information about some of the

Strategic Action Plan of Orascom Telecom Bangladesh Limited (Banglalink) that we needed to

prepare this report.

We are especially thankful to Mr. , Bangladesh, for his contribution in

making appointment with Mr, , Financial Executive of Orascom Telecom

Bangladesh Limited (Banglalink).

Executive Summary

As assigned by our course instructor to prepare a term paper on comprehensive analysis of

strategies of Orascom Telecom Bangladesh Limited, we tried our best to gather all the

information within our reach. Having read in our course book about the topic, we tried to relate it

to the real practice of Orascom Telecom Bangladesh limited. Orascom Telecom Bangladesh

Limited is working to fulfill the demand of consumer. Our term paper intends to find out and

analyze their strategy according to its industry and company situation. In today’s world of

business, developing an effective strategic plan plays a significant role in achieving

organizational goals and targeted performance. Banglalink being no exception tries to adopt best

strategic plan matching to its competitive position in the matured industry as the runner-up

company. They prefer to promote their marketing activities through different media. Banglalink

carries on offensive strategies mainly to challenge its main key rival Grameen Phone. Our term

paper provides relevant strategic, financial objectives both for short-term and long-term

according to the company’s set mission and vision. Our term paper also provides some

recommendations for improving its performance that ultimately leads them to achieve their

particular objectives. We think the developed strategic plan analyzing their overall market

environment would help them further to progress in expanding their network coverage as well as

other product packages and service benefits for its customers, which would contribute to their

larger profit margin and increased number of market share compared to its two near rivals like

Grameen Phone and Robi.

Table of content

Topic Page Number

1

2-3

3

4

5-8

8-10

11-14

14

15-16

17-18

Conclusion18-19

References19

Objective of the report:

General

The general objective of our report is to discuss the strategic action plan of Orascom Telecom

Bangladesh Limited. We have focused on comprehensive analysis of strategies as well as have

tried to come up with some recommended actions to improve performance by taking some long-

term and immediate actions.

Specific

To compare theoretical ideas with practical working environment and to explore different terms

of business strategy.

Methodology:

Data:

Basically in this report we used primary and secondary data.

Primary data:

We went to Orascom Telecom Bangladesh Limited and took interviews from some of the

members of Banglalink. Quazi Abid-ur-Rahman, Accounts Payable officer, Accounting &

Finance, he was the primary source of our relevant information and data.

Secondary data:

We also took abundant help of website of Orascom Telecom Bangladesh Limited, published

annual reports on their website, internal newsletters, journals and articles from newspapers as our

secondary data.

Methods:

We have used qualitative research technique. We compared theory and our leanings with the

actual and real practice of the company in a qualitative way.

Limitation of the data:

We faced some problems to collect the information. Some obstacles are given in the below-

Lack of Co-operation for their official confidentiality, they did not disclose any of

their financial objectives related matters.

Limited source of data, only the website and the interview of official persons.

They did not provide any negative information about their company.

Company Overview:

Orascom Telecom Bangladesh Ltd. (Banglalink) is the wholly owned subsidiary of Egyptian

Orascom Telecom, the ultimate parent company of the group is vimpelcom, the 6th largest

mobile phone operator in the world. Banglalink is the second largest cellular service provider in

Bangladesh after Grameen Phone. The company was founded in 1998 and is based in Dhaka,

Bangladesh. Banglalink GSM Ltd. was formerly known as Sheba Telecom Pvt. Ltd. As a result

of acquisition of Sheba Telecom Pvt Ltd. by Orascom Telecom Holding S.A.E. in 2004, Sheba

Telecom Private Ltd.'s name was changed when it purchased 100% of the shares of Sheba

Telecom (Pvt.) Limited (“Sheba”). And its telecommunication services were re-launched under

the brand name Banglalink. As of September 2, 2004, Banglalink GSM Ltd. operates as a

subsidiary of Orascom Telecom Holding S.A.E. When Banglalink began operations in

Bangladesh in February 2005, its impact was felt immediately: overnight mobile telephony

became an affordable option for customers across a wide range of market segments. When

Banglalink entered the Bangladesh telecom industry in February 2005, the scenario changed

overnight with mobile telephony becoming an extremely useful and affordable communication

tool for people across all segments. Within one year of operation, Banglalink became the fastest

growing mobile operator of the country with a growth rate of 257%. This milestone was

achieved with innovative and attractive products and services targeting the different market

segments; aggressive improvement of network quality and dedicated customer care; and

effective communication that emotionally connected customers with Banglalink. Banglalink is

today the 2nd largest mobile operator in the country and recently celebrated with 1 crore

customers. This has been achieved in just three and a half years. Banglalink currently has 15

million subscribers as of May 2010, representing a market share of 26%, the fastest growing

mobile company in Bangladesh. The mobile phone has since become the symbol of a positive

change in Bangladesh. This positive change, quite rightly attributed to Banglalink, has since

become their corporate positioning, which is reflected in the slogan, “making a difference” or

“din bodol”. Making a difference is the central theme that resonates through everything that they

do, be it through their products, services, CSR, or other activities.

Strategic Action Plan:

1.A. Company Vision:

As Banglalink aims to understand peoples' needs best and develop appropriate communication

services to improve peoples' life and make it simple. Their vision is “To be part of people’s daily

lives by providing reliable and simple products and services that help people interact and

communicate better.” The company aims to make a difference in the lives of the people.

All the Banglalink family members have one thing in common- a passion to serve. All their work

is aimed towards meeting their vision. All members of the Banglalink family are highly

passionate individuals, fully committed to achieving the vision that they have set themselves.

The customers' needs matter most to them, which is, making their customers’ life simple and

improving is all that they actually want. To ensure the fact that Banglalink’s vision gets

achieved, they have established a few corporate values that it tries to instill in its employees. All

employees of Banglalink demonstrate the following values in their day-to-day activities to ensure

“making a difference” in every area of operations. They want to be Straight-forward, Reliable,

Innovative and above all, Passionate. Moreover, Banglalink wants to go that extra mile, so that

customers can have the best possible service as well as paving way for investing in the future of

Bangladesh.

1.B. Company mission:

Banglalink understands customer needs best and will create and deliver appropriate

communication services to improve people’s lives and make them easier. Banglalink’s success is

based on a simple mission: "Bringing mobile telephony to the masses". Banglalink’s slogan

"making a difference" does not only reflect in the telecom industry, but also in its products and

services which makes difference to the lives of its customers. Its mission is “To maintain its

position as the leading mobile service provider in Bangladesh, providing the best quality service

to its customers, the best working environment for its employees, top value for its shareholders,

and proudly contributing to the development of their community.”

1.C. Company objectives:

After setting the company mission and vision there is need to set company objectives. Objectives

actually convert mission and vision into specific performance outcomes. Company objectives

represent a managerial commitment to achieving particular results and outcomes within a given

time frame. Objectives help achieve the targeted outcome of a company which greatly improve a

company’s actual performance. The objectives functions refer that how the organization is doing

company personally to try hard or do the best they can, and then living with whatever results

they deliver is clearly insufficient. For our project report we have selected one of the most

renowned telecom company Banglalink which is holding the second leading position in Telecom

Company in Bangladesh, they also have some set of objectives for their company. The principal

objective of the Company is to provide telecommunication services across Bangladesh through

the installation and operation of telecommunication facilities. From our course we have come to

know that there are two types of performance yardsticks are required for all company, Strategic

objectives and Financial objectives. In strategic and financial objectives there are some crucial

points which enrich company’s value than the other rival company.

A company’s set of financial and strategic objectives ought to include both near-term and longer-

term performance targets.

Strategic Objectives:

Strategic objectives relate to target outcomes that indicate a company is strengthening its market

standing, competitive vitality, and future business prospects. Its outcomes are mainly focused on

improving competitive vitality and future business position.

Short-term objectives:

Commitment to the Customers to achieve customer satisfaction:

Banglalink’s main business objective is to maintain their leadership in providing the best quality

service and best value for money to their customers. They are committed to the highest level of

customer satisfaction by meeting their customers’ needs, providing superior network quality and

the widest network coverage, and offering a great customer service experience. They simply

attempt to overtake key competitors on product performance or quality.

Strengthening the company’s brand name appeal:

Banglalink’s another main short term objective is creating its brand associations by doing CSR

activities. Banglalink continues to play an active role in the area of corporate social

responsibility (CSR). Banglalink is contentiously putting its effort to make contribution for the

potential sectors where national interest is involve. Banglalink has chosen the tourism sector as

to be one of the major platforms for CSR activities. For example- Banglalink focuses its CSR on

the field of Tradition & culture of Bengal, Beautification of the city towns; it is the official

sponsor of Bangladesh Tourism Corporation, the voting campaign to vote for Cox-bazaar and

sunder-boon and cleaning Cox-bazaar etc.

Other short-term objectives include-

Achieving desired revenue through introducing new and innovative products and services

Discovering new segment of customers

Consistently creating new usage of its product

Achieving technological leadership

Having stronger national sales and distribution capabilities than rivals

Long-term objectives:

Being customer oriented to increase customer base:

Banglalink’s ultimate aim is not only to increase revenues but also to build long-term

relationships and loyalty with their customers in order to sustain their success in the future. To

do so, they provide customers with accurate, truthful, complete and consistent information

concerning their products and services.

Protecting customer information:

Customer information is strictly confidential. Banglalink safeguards customer information stored

in their records and information systems in compliance with the Telecom.

Commitment to their employees:

Banglalink’s employees are their most valued asset. Its ability to succeed depends on the

integrity, knowledge, skills, diversity, and teamwork of the employees. It is shaping a

challenging, fair, firm, and productive work environment, which emphasizes mutual respect and

team-work. It strives to reward high performance and promises to be responsive to the needs of

the employees. The company is committed to providing equitable compensation, excellent

working conditions, and a fair atmosphere with great opportunities for professional growth.

Equal Employment Opportunity:

Banglalink is an equal opportunity employer and takes the pride itself with the Equal

Employment Opportunity policy (EEO). All employment applications are considered without

regard to age, gender, religion, disability, or marital status.

1. D. Financial objectives:

Financial objectives relate to the financial performance targets management has established for

the organization to achieve. Like other telecommunication network provider company it has got

some common financial objectives. These are actually set as a means to achieve the anticipated

results.

Short-term objectives:

To increase annual revenues of its products and services by 5% during year 2012.

Attaining a positive EBITDA (Earnings before Interest and Tax Deduction and

Amortization

To achieve an annual increase in after-tax profits of 10% during year 2012.

Long-term objectives:

To achieve larger profit margins.

To ensure 20% increase in return on equity within three to five years.

To ensure sufficient internal cash flows to fund new capital investment.

To ensure stable earnings during periods of recession.

1.D. Functional strategies:

Functional-area strategies concern the actions, approaches and practices to be employed in

managing particular functions or business processes or key activities within a business. The

primary role of a functional strategy is to support the company’s overall business strategy and

competitive approach. Banglalink aims at establishing or strengthening a business unit’s

competencies and capabilities in performing strategy-critical activities so as to enhance the

business’s market position and standing with customers. There are approximately eight

functional departments in the organization. The functions of these departments are described

briefly in the following sections:

Marketing:

Since Banglalink’s products and services are customer-oriented, so their main and basic

functional strategy is to set an effective marketing strategy. They set the managerial game plan

for running the sales and marketing part of business. Their Marketing team actually consists of

several teams, which includes PR and Communications, Value Added services (VAS), Loyalty

& Retention and International Roaming. The Loyalty & Retention team is responsible for the

designing of the special offers launched from time to time in an attempt either to increase

customer base and The VAS division is responsible for the continuously adding valuable

services to provide a complete solution to existing customers, for example, for making

conference calling and ring tone or logo downloads possible. These two teams together are in

charge of making the customers experience with our network more satisfying. Besides, Public

Relations and Communication is responsible for designing and developing all promotional

materials for the marketing of any new product or package and any other activities. They

coordinate and work directly with the advertising agency, vendors and procurement. Regarding

the market development strategies the company formulates strategies in accordance with the

changing trends and increasing the level of competition.

Marketing Mix (4 Ps):

The marketing mix of the company can be broken down into the "4 Ps" of marketing. These are

the parameters that the marketing manager can control, subject to the internal and external

constraints of the marketing environment to make decisions focusing on the customers in the

target market in order to create perceived value and generate positive response.

Product:

Banglalink became the first company to provide free incoming calls from BTTB for both post-

paid and pre-paid connections. Banglalink offers a number of products and value added services

to its valued subscribers. These attractive products and services are designed to cater to the needs

of the individual subscribers. They divide all of these products into four categories; these are-

Pre-Paid, Post-Paid, Banglalink Enterprise, Banglalink CU. The company also provides various

value-added services, such as call forwarding/divert, call waiting/call holding, call barring, caller

line identification presentation, voice mail, short messaging, ring tone and logo downloads,

conference call, picture messages, and instant recharge etc. The second important service

provided by this industry is the data transfer service i.e. Internet. Internet is provided in the form

of EDGE & GPRS by the operators. The tangible products of the industry are Internet modems.

There are different postpaid and pre paid packages that are considered as the main quality

offering from Banglalink. It provides the pre paid connection with zero monthly subscription

fees. Banglalink currently offers two prepaid plans. All the prepaid plans come in two phases—

Standard (T&T incoming and outgoing with NWD and ISD) and M2M. Currently there are three

postpaid plans from Banglalink for its tail customers. These packages are known as personal

package, personal supplementary, personal call and control. Banglalink enterprise offers a wide

range of products and services to suit the needs of the business community. Companies under the

enterprise package are provided with a dedicated enterprise relationship manager who provides

them with personalized customer care round the clock. The current packages are: enterprise

corporate; targeted at the corporate segment, enterprise SME; targeted at the SME segment,

enterprise personal. Banglalink CU package is targeted at the shopkeepers, which offers PCO

facility to the general public.

Price:

Maintained prices are mostly offered revolving around a certain figure. Their unique selling

proposition is innovativeness of their value added features. Banglalink’s price effective strategy

has enabled them to capture the capture the second highest market chunk so far. There are

various rates for various packages of Internet service. It can be on volume basis (dependant on

bytes downloaded or transferred) or at fixed rates.

Place:

Banglalink has established their distribution facilities almost everywhere in Bangladesh. They

have their own customer care centers almost in all the important areas of almost all the different

regions of the country. Besides their own customer centers, there are one or more authorized

dealers in every district. Banglalink is currently operating in 64 districts of the country where

they are making their presence felt through franchises. For a telecom giant like Banglalink, their

unusual and informal distribution system is the most effective one where people can not only buy

new connections but they can also get their queries entertained as well regarding their current

package and for the forthcoming packages as well.

Promotion:

In the case of promotion, Banglalink adapted aggressive marketing strategy. They place their ads

in every possible media - from TV to radio, from print media to Internet, from the body of the

buses to billboards. Operators spend enormous amounts of money on advertisements, often

acquiring the services of leading media producers and actors to direct and play out TV

commercials. They have been passionately promoting the preservation and celebration of

national and cultural heritage through sponsored initiatives like Jagoroner Gaan, New7Wonders,

Modhu Mela, Boshonto Uthshab and many more.

Human Resources department:

At Banglalink, they believe that their teamwork is their greatest asset. Useful contributions made

by each individual bring them that much closer to their goals. The Banglalink family is made up

of a group of passionate individuals, uniquely qualified from diverse disciplines but working

towards its vision. Banglalink in their HR department set strategies as such that ensures for the

employees a friendly, professional and mutually supportive environment that encourages their

people to develop their potentials to an optimal level, maintenance of a true quality of

professionalism that can be found in all world-class multinational companies, co-operation

between the team oriented professionals, who contribute to the greater whole of the organization

through their participation in decision making situations. Their business unit strategy is

following short term rather than long term strategies because they need immediate results and

outcomes for their organization. But in terms of other financial marketing or other activities they

follow corporate unit strategies. Banglalink maintains their corporate unit strategy with specific

growth. They also use Aggregate planning and Succession planning. Aggregate planning is

basically for the lower level jobs and succession planning is basically for management positions.

Moreover, it follows a system which recognizes and rewards groups as well as individuals for

their efforts and contributions to the company. The HR department is also responsible for

disseminating internal communication to all users and in the process of developing compensation

packages for its employees.

Finance:

The Finance department is the largest department in the head office. It consists of the

Procurement and Cash Management divisions among many others. Proper statistical analyses

using the modernized and up to date statistical tools are being used and the company data is

properly checked as well as the balance sheets and financial statements are periodically made.

Budgets for all marketing strategies are decided based on previous budgets and if a new strategy

is launched, company discusses it in an open meeting and then the budgets are allocated. Also,

this Department ensures that the methods of procurement are fair and equitable and that the

products procured meet all bid specifications, are of high quality and constitute the best value for

the money. Accounting & Finance department of Banglalink is a very important value adding

function within the organization. It holds belief that Accounting and Finance Department has the

strategic role to add value to Banglalink’s business by providing right information on time,

ensuring right process and maintaining appropriate control. To achieve this goal the organization

provide highest importance to the Automation, Speed, Accuracy and Commercial sense when

providing service to their Internal and External stakeholders.

And according to their interview, they do not have any Research and Development department

within the organization.

Others include-

Sales:

From their point of view, marketing activities are targeted and conducted in such a way that

ultimately facilitate them to lead their company to make greater revenue from sales. So after the

marketing area they consider their sales department as the second most important functional

department. One of the most important links in the chain, the sales department is responsible for

all the sales activities of the organization. It is divided into four divisions- Direct Sales,

Corporate Sales, Distribution Sales and Sales Support.

Customer Care:

Unlike any other organizations Banglalink considers its customer care important department in

their organization and functions as a separate department. Banglalink pioneered the concept of

taking customer service closer to its stakeholders through the introduction of more than 1,000

customer care points across the country – the largest network of its kind in the industry. This is

segmented, consisting of the Customer Care division itself, and then there is Care Line, Credit

Management Unit and the Support Services Unit. They are responsible for handling customer

queries and providing solutions to any problems faced by the subscribers. Here their strategy lies

in delivering customer care using its call centers and customer care networks. Their strategy aims

at providing a complete mobile solution, connections, handsets, accessories and providing

selected customer services like SIM replacement, reconnection, bill payment etc. They are

strategically located at key points around the country. Currently Banglalink provides customer

care services to its clients through Banglalink sales & care centres. Banglalink points, Banglalink

service points Banglalink care lines are call centers serving customers 24 hours 7 days a week

with instant solutions.

IT & Billing:

The IT & Billing department, as is evident from the name, is in charge of all the hardware,

software and program requirement of the other departments. They also generate the bills for the

company subscribers (post-paid).

Administration:

Along with the Administration division, the department also consists of the Legal division and

the Project Management Office.

Technical:

The technical people are all located at Hosna Tower in Gulshan – 1, but many work off site, take

care of BTS or BSCs. The various divisions of this particular department include Access

Network, Core Access etc.

Recommended actions to improve performance:

Since its inception, Banglalink has always endeavoured to provide its customers with innovative

products and services on a regular basis. In order to recommend some actions for Banglalink, we

identified several opportunities. In addition, we have developed some creative and new strategies

that we believe will help Banglalink become the top telecom operator in this country in the next

3 years. Based on the findings of the reports, the following recommendations are made:

First of all, they should improve their equity position to fund expansion, thus reducing the

risk of default arising from large debt position.

Most professionals and even students nowadays have credit or debit cards. But most of us

have not had the experience to purchase something using our cell phones, or from

websites like ebay, amazon without a physical transaction. Banglalink could introduce a

service naming emarket.com. It will have to negotiate and sign contractual agreements

with providers such as grocery supermarkets, pharmacies, books stores etc. If the

suppliers have the resources for home delivery then they can register their products with

Banglalink.

Banglalink could launch a website with the selected products from these participating

vendors (a site not similar to grameenphone’s cellbazaar). This website can be made

accessible from desktops, laptops and cell phones using wap services and also without

internet using power menus. However, it is open to all to register as the suppliers of

banglalink emarket, just needs to fulfill some requirements. Here banglalink can earn

money both from cellphone usage and suppliers registration/contract fee. Here the

business process does not need huge investment, just some contracts with strong and

reliable suppliers. Banglalink has already the system of power menu, and cutting

cellphone balance for value added services. Thus, they will be the pioneer of real

ecommerce, online banking.

Banglalink should introduce to convert phone balance in to cash. When they give the

dealership to PCO they should give also this authority to pay people in cash when they

transfer balance. Also one can use your phone balance when shopping in various stores

by transferring money to the cellphone of those shops/stores. It does not need any new

technology, as they are using similar technology in “Banglalink bill-pay service”.

Like Nokia Vodafone, Banglalink should launch Nokia Banglalink and Samsung

Banglalink phone sets. They will make a contract and customize the different and popular

models of nokia and Samsung with their own operating system and appearance. But

phone sets will be locked, only for Banglalink SIM, and price must be below market

price. GP has introduced own branded handset. However, the quality of the device and

price clearly indicate that it is meant for the mid to low income population.Tata indicom

or idea global in India has introduced a variety of handsets, ranging from expensive and

sophisticated to cheap and functional. We recommend that Banglalink employ the same

strategy and introduce a diverse set of handsets that are designed by brand name

manufacturers such as Nokia and Samsung etc. along with their own brand.

Banglalink has already introduced remittance system, but it is limited to only two banks.

It needs to increase the number of associate banks, and also advertise this offer massively

especially in rural area as people in rural area need to receive money from their foreign

relatives at large extend.

It should attract the corporations. Because in corporations they can sell in bulk amount,

also get the customers who use much. Remittance is good idea in this regard, but it needs

more idea like this, and customizing sims and mobile operating system for the

corporation, and with some other extra benefits.

As it needs huge investment Banglalink can invest money for 4G, as it needs very lengthy

business process like 1 to 3 years to setup 3G or 4G Technology. According to GP’s

website, there are 27 million subscribers where 7 million is active internet users but

Banglalink has less than 0.01 million internet subscribers from its 17 million users.

Banglalink’s one of the main drawback is data service. Again to make it unreachable for

banglalink GP has invested 220 million US dollar in 3G system. It has passed already 2

years GP has announced 3G. So then it will be difficult for GP to switch 4G quickly.

They do not want change their investment very soon too.

2. A. Porter’s Generic Strategy:

If we closely look at the market situation, we will see that the market situation is perfectly

suitable for following “Low Cost Provider Strategy” because:

1. Price competition among the rival mobile phone operators (Grameenphone, Banglalink,

Robi, Airtel) is vigorous. A company can grab most of the customers by offering low

price.

2. Rival companies are offering similar products.

3. Most customers use the product in the same ways.

4. Customers incur low costs in switching their purchases from one operator to other

operator as the price of mobile phone SIM card of different mobile phone operators is

almost same.

5. Industry newcomers (Airtel) are using introductory low price to attract buyers and

building a customer base.

But analyzing each of the existing rivals in this industry, we think that Banglalink is

following “Best Cost Provider” strategy. Banglalink aims at delivering much of the same

attributes of key rival’s offering to buyers by satisfying their expectations performance or

service features. As its products have similar types of attributes comparable with one of its

key rivals like Grameen phone, that is, it maintains its standard quality service of network

coverage along with comparably attractive customer service and offers a bit or slightly lower

price than industry average (competitors). Thus Banglalink attempts to achieve best-cost

status which makes its customers to consider it as the best cost for them. In mobile

communication industry, the customers want quality networking system at a cheap call rate.

Therefore, their target market is those value-conscious buyers who are looking for similar

appealing features at an appealingly slight low price. “Best Cost Provider” strategy works

best where buyers seek quality diversified products, at the same time; they are also very

much concerned about price and value. Moreover, Banglalink as a Best Cost Provider

strategy follower positions itself by providing its customers moderate quality product at

below-average price. If we go through the pricing policy of different mobile operator

companies, it would be clear that Banglalink is competing with required or essential quality

in its offerings and charging a slightly lower call rate than the average call rate.

GRAMEENPHONE

Name of the Product Call rate

SHOHOj 1.09 tk for 1st minute

0.79 tk from 2nd minute

BONDHU 7 FnF numbers are available

GP-GP F&Fs are available at

BDT 0.49/min.

1 other operator F&F at Tk

0.79/min.

Other than the 7 F&Fs at

BDT 0.99/min.

APON

Any Grameenphone number 49paisa/ min, during 12

hours of each day. The rest

12 hours allow you to talk at

BDT 99 paisa/min to GP

numbers.

Other Number 1.29 tk to 1.59 tk

3 FnF number Taka 0.49/min

SMILE

All Grameenphone friends in

the special hour

Tk. 0.49/min at Tk. 1.50/min

at other peak and off – peak

hours.

Other operator 2.00 tk.

DIJUICE 0.49 to 1.38 tk

BANGLALINK

Name of the Product Description Call rate

DESH To banglalink and other operator 1.29 tk for 1st minute

0.99 tk from 2nd minute

FnF Number 0.49 for B.link number

0.99 to other operator

AK DESH AK

RATE

To any number 0.89 tk/ minute

DESH AK RATE

DARUN

FNF (banglalink and other operator) 0.49 tk

Normal rate

0.99 tk for 1st minute.

0.69tk from 2nd minute.

DESH

RONGDHANU

12.00am-5.00pm -1.50/min

will be charged per minute

during the 1st five minutes.

From 6th to 30th minute, the

call will be free of charge.

Similarly, from 31st to 35th

minute, the tariff will be tk.

1.50/minute and from 36th to

60th minute, the call will be

free of charge.

BANGLALINK

DESH 7fnf

To B.link FNF numbers 0.75 tk for 1st minute

0.45 tk from 2nd minute

To other FNF numbers 1.29 tk for 1st minute

0.99 tk from 2nd minute

AIRTEL

Name of the product Call rate

GOLPO Airtel to Airtel 0.77 tk/ minute

Other operator 0.77 tk/ minute

DOLBODOL Community 0.29 tk/ minute

Onnet 0.59 tk/ minute

Offnet 1.49 tk/ minute

KOTHA Airtel to Airtel 0.59 tk/ minute

Other operator 1.19 tk/ minute

ADDA Airtel to Airtel 0.59 tk/ minute

Other operator 1.19 tk/ minute

FnF 0.29 tk/ minute

ROBI

Name of the product Call rate

MUHURTO To Robi and other operator 1.6 tk/ minute

SHOROL To Robi and other operator 0.68 tk/ minute

To FnF number 0.25 tk/ minute

NOBANNO To Robi and other operator 0.84 tk/minute (14 paisa/sec)

GOTI To Robi and other operator 0.84 tk/minute (14 paisa/sec)

PROTHOM To Robi 0.44 tk/ minute

To other operator 0.88 tk/ minute

The following table is showing the summary of the price of each operator at a glance –

Summary

Mobile operator Average call rate

Grameenphone 0.49 to 2.00 taka/minute

Banglalink 0.49 to 1.29 taka/ minute

Robi 0.68 to 1.6 taka/minute

Airtel 0.59 to 1.49 taka/minute

If we look at the call rate of the operator companies, it is clear that the call rate of Banglalink is

at a moderate level. So, it matches to the best cost provider strategy.

Product variation: Looking at the product criteria, we would see that Banglalink is offering

various kinds of packages or diversified packages. Customers can choose a suitable package

according to their need from among the various kinds of packages.

Moderate networking coverage:

Grameenphone Grameenphone’s network covers 99% of

Bangladesh’s population and 89% of the total

land area.

13,000 base stations are located in about

7,200 sites in operation around the country.

Banglalink Covered 61 districts, 90% of Bangladesh’s

population have been covered by its base

station.

ROBI 7400 base stations in more than 5300 sites.

After analyzing those statistics, it is clear that the service of Banglalink’s network coverage is

better than its immediate market challenger Robi. Even though it is not as good as

Grameenphone but it possesses comparable benefits of minimum requirements for meeting

customers’ need at the level of their expectations. So, it is clear that the service of Banglalink is

maintaining moderate or medium-quality level at the best below-average price for its customers.

Non-Generic Strategies:

Most every company must at times go on the offensive to improve its market position and try to

build a competitive advantage or widen an existing one. Banglalink is following offensive

strategy as it takes any initiative before something happens into environment. Banglalink’s

principal offensive strategy options include the following things:

Offering moderate, comparably good product at a lower price than the market leader

Leapfrogging competitors by assuming future market condition and advertising its product according to that.

Continuously offering different new packages to the customers.

Adopting and improving on the good ideas of other companies. Example: Grameenphone is improving its service through increasing customer care service. So, Banglalink is also following that. When Grameenphone offers a call rate which is low and competitive, Banglalink also offers that sort of package and call rate.

Deliberately attacking those market segments where its key rival (Grameenphone) makes big profits. Example: Grameenphone is generating handsome profit by targeting the people of different occupation. Grameenphone is offering different packages for the people of different occupation. Now Banglalink is targeting those market segments by offering attractive packages (Banglalink Inspire, Banglalink SME). Targeting the SME segments Banglalink introduced the only customized offer in the market for SMEs.

2. B. Industry situation:

The introduction of telecommunication industry has been pretty late in our country compared to

those of the neighboring countries. Though the first telecom company, Citycell, was introduced

ages ago, the device has not become so pervasive until 1997, the year when the biggest telecom

of the country, GrameenPhone hit the market with its GSM technology. After that the industry

grew at such an incredible rate in just a decade that anyone could hardly imagine. Now there are

a number of players battling so hard for their respective market share and the consumers as well

as the economy benefitted tremendously from this intense competition. It has been clearly

noticed that, as the market is growing, proportionally all the companies are getting new

subscribers depending on their nationwide coverage. Their market share is increasing, keeping

pace with the growth rate of the market. Because there are a number of operators in the market,

the cost for switching loyalty is very low. Customers may want to switch from one operator to

another for a better deal. In fact, every customer nowadays uses more than one mobile phone or

at least owns more than one connection, and uses them interchangeably. This trend is especially

very dominant among the teenagers who constitute a major portion of the market share being

very sensitive to price. The supplier is not powerful in this case which is a plus for the company

and the company can play with the price to keep the production cost low. The current success of

the telecom industry is primarily due to an intense demand from customers for their services and

products. Ever present promotions and advertisements, most of which were highly innovative

and attractive were also a key factor in the industry's success.

After analyzing the market situation, it can be said that telecommunication industry has entered

into the maturity stage. A maturing industry is one that is moving from rapid growth to

significantly slower growth. An industry is said to be mature when nearly all potential buyers are

already users of the industry’s product. In a mature market, demand consists of replacement sales

to existing users, wining the competition depends on attracting the few remaining new customers

and to convince existing buyers to up their usage, having a growth rate of customer base or

economy as a whole under 5%.

If we look at the present market condition we would see that those attributes match to the

telecommunication industry. Every company should have an assessment of the market

environment to estimate how the company could react in different circumstances. Banglalink

existing in matured position competes mainly based on price and quality like other prevailing

competitors in the industry. If we concentrate on the promotional activities of different mobile

phone operator companies we will notice that most of the companies are trying to grab the

customers of one another towards their service offerings through cost reduction (offering suitable

package at a cheaper call rate) and by providing better network coverage. Besides, they are

gaining access to additional sales outlets by increasing customer care centers as well as

expanding the company’s geographic coverage in order to improve service quality. Also, they

are putting emphasis on convincing their customers to increase their usage, which is, expanding

their product line through offering different packages (Airtel- GOLPO, ADDA, Banglalink-

Desh, Rongdhonu, increasing FnF numbers, bonus on usage). Mobile operator companies are

encouraging the customers to use their existing connection rather than influencing them to buy

new products (Giving bonus on recharging switched off SIM connections). Moreover, the

companies are emphasizing on creating more value with their services to retain their customers

as much as possible. Banglalink provides value to its customers by constant innovation to cater

to the needs of the market. A dedicated hotline has been established for prospective customers to

provide customers with required information and also provide sales service at their doorstep

through a team of Business development officers throughout the country. In order to enhance the

overall value proposition it introduced music station, SMS roaming for its international roaming

customers. Such initiatives helped in differentiating Banglalink as an innovator. Driving by the

new competitive character of the industry maturity, the effective strategic move that can help

Banglalink is to put its main efforts on increasing sales to its present customers by coming up

with different customer services and finding more ways for customers to use the product like

offering minitue bonus, SMS bonus etc.

2. C. Company Situation

If we want to analyze the company situation in terms of industry situation we have to see the market

share of some mobile phone operator companies.

Name of the company Market share

Grameenphone 32 million subscribers. 43.8% market share.

Banglalink Subscriber base of 20.05 million, Market

share 27.03%

Robi 14 million subscribers, 12.07% market share

Airtel Market share 6.54%, 5.29 million subscribers

Based on the number of subscribers, Banglalink has smaller market shares than the industry

leader Grameen Phone, so this the runner-up firm in telecommunication industry. Being a runner

up firm, Banglalink is challenging the market leader (Grameenphone), employing offensive

strategies, taking proactive actions to further expand its market share and trying to build a

stronger market position in the industry.

Moreover, if we look through the strategic policies which have been adopted by Banglalink it

will be clear to us that how Banglalink is challenging the market leader being in the runner-up

position. They are discussed below.

Banglalink often involves in agreement with the corporate groups. Banglalink does so

because it wants to increase the market share. The reason is that the corporate bodies

have the maximum need of communication. Moreover, it includes more prestige to the

image of Banglalink if it can involve with a renowned corporate organization. Another

reason is that this positive image may help the company to obtain the rival’s customer.

According to Banglalink officials, capital investment will reach more than 50 billion by

2014. It continues to invest heavily in network enhancement. They do so because the

market is becoming more competitive and their aim is to be the market leader. For this

reason, Banglalink is increasing its capital investment in purchasing network equipment

and expansion into rural areas. It also pioneered the concept of taking customer service

closer to its stakeholders through the introduction of more than 1000 customer care points

across the country -the largest network of its kind in the industry.

In Bangladesh, most of the telecommunication industry’s target customers are very price

sensitive. So Banglalink is trying to reduce their operating cost improving internal

operating efficiency. Then they can offer a lower call rate to capture market.

If we look through the call rate of Banglalink we will find that they are charging the price

of call near the call rate of Grameenphone. Banglalink is following the pricing strategy of

Grameenphone, not the Robi or Airtel. It is also following the strategy of Grameenphone

in terms of improving customer service (increasing customer care center). This indicates

that Banglalink is challenging the market leader. Moreover, Banglalink has taken

aggressive promotional strategy to attract the maximum number of customers.

Other strategy that Banglalink employs or can continue using is the distinctive-image

strategy. They can focus on devising unusual creative advertising by building their

strategies around ways to make themselves stand out from competitors. The corporate

stance of “Making a difference” is reflected in everything Banglalink does, from its

innovative services, advertising quality to the CSR activities that they have supported.

Conclusion:

Banglalink is a communication company offering an extensive range of wireless communication

services tailored to meet the needs of individual consumers, businesses and government entities.

They have carefully crafted their strategic operations to meet the specific needs of each of their

targeted customer groups through focused communication solutions. They have touched the lives

of their customers in diverse ways – enhancing the quality of life economically, socially and

emotionally and have earned a place in the hearts of millions. Their continued dedication to their

customers has firmly established them as the best in customer care service, with over 1000

Banglalink Service Points (BSP) across the country. They make the highest investment in

network expansion. They are the second largest wireless company in Bangladesh, based on the

number of wireless subscribers, and the number is rapidly increasing. They are on a relentless

pursuit to retain and attract subscribers by taking innovative actions to improve their customer

care, sales and distribution functions, and brand awareness. They continuously endeavor to

improve their subscribers’ experience which includes improving their network performance by

adding cell sites to expand the coverage and capacity of their networks, introducing an ever

increasing array of functions feasible over the phone, and offering subscribers excellent value

propositions with their wide range of customized pricing plans. They have reached out

aggressively to rural areas, fortified by a major network expansion, which has further contributed

to the strong customer acquisition. Although they market their services using traditional print and

broadcast media advertising, they also provide exposure to their brand name through various

sponsorship activities of cultural and national significance. Aside from enhancing its brand

image, these initiatives further consolidate their role as a compassionate corporate citizen,

committed to utilizing their resources to usher in positive changes all around them. Through the

challenges and successes that cross their path, they remain steadfastly committed to making a

difference through everything they do, and they look forward to the future with determined

confidence. They have the best team that continues to achieve more than its competitors with

fewer team members. Growth over the last years have been fuelled with innovative products and

services targeting different market segments, aggressive improvement of network quality and

dedicated customer care, creating an extensive distribution network across the country, and

establishing a strong brand that emotionally connected customers with Banglalink.

References:

Thomson, Strickland, Gamble (2011), Crafting and Executing Strategy, ed; 16th,

McGraw-Hill/Irwin, New York.

http://www.weeklyblitz.net/988/mobile-telecom-industry-in-bangladesh

http://researchexamples.com/report/strategic-management-2/my-debate-in-strategic-

management-course/

http://www.sb.iub.edu.bd/Nadia_Mreedula_intern_report_sum_2008.pdf

http://bangladesheconomy.wordpress.com/2010/04/12/banglalink-to-invest-tk-7-5b-in-

network-expansion-this-year/

http://www.banglalinkgsm.com

http://www.airtelbd.com

http://www.grameenphone.com

http://www.robi.com.bd

http://marketingmixx.com/marketing-plan-2/198-banglalink-marketing-

plan.html#.TuM78egH3gw