hrm360 2014 summer case 3 2 banglalink

5/21/2018 HRM360 2014 Summer Case 3 2 BanglaLink

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Simple and efficient cellular telephony with the least possible total cost of ownership iswhat we will stand for says Lars P Reichelt, the new chief executive officer ofBanglalink, the GSM operation of Orascom Telecom.

The Swiss-educated Reichelt has a string of successful involvements in some of themajor players of the European mobile market. They include European telecoms giantTelefonicas GSM operations in Switzerland, ONE of Austria and TelesystemInternational Wireless in the Czech Republic which is a subsidiary of global telecomsplayer Vodafone AirTouch. Till recently Lars Reichelt headed Yahoo Wirelesss Europeoperations. Brought in by Orascom Telecom to spearhead its latest venture, Banglalink,he believes it is not competition but expansion of the market with efficiency that matters.Would Banglalink be able to catch up with Grameen Phone or Aktel, the countrys twoleading GSM operators?

However, Banglalink is far away behind Grameen Phone and AKTELregardingpreference as the favorite cell phone provider. And there is a rumor going on that HutchTelecom will take over Banglalink. And this grapevine is really affecting theirreputation.

HISTORICAL BACKGROUND

The service sector has been growing rapidly after the World War II, as many nations shiftfrom a manufacturing based economy to service economy. Telecommunication industryis playing an important role in the communication system that has become an obvious for

this modern world. Orascom Telecom Holdings which was established in 1998 is one ofthose dynamic telecom companies of the world. Till date, this Egyptian Telecomcompany is facilitating cellular phone service to the people of 9 countries. Banglalinkis the new member of the esteemed GSM family of Orascom Telecom Holdings. Thescenario of the telecom industry has totally changed as Banglalink

TMentered in the

industry with the aim of serving mobile phone services to the mass population of thecountry so that the entire communication system of Bangladesh develop dramatically.

If we compare the present situation of BanglalinkTM

with Sheba Telecom Company, wefind the emerging growth and cordial consumer acceptance of BanglalinkTMwhich wasnever been seen and even thought during the operational period of Sheba Telecom

Company. Brand preference and consumer acceptance of BanglalinkTM

has created thisimmense growth rate.

Banglalink is the new member of the GSM family of Orascom Telecom Holdings.Orascom Telecom Holdings is operating in 9 countries of the world. The subsidiariesinclude Egypt, Algeria, Pakistan, Tunisia, Iraq, Bangladesh, Congo Brazzaville,Zimbabwe, and Democratic Republic of Congo. The operational performance in 2004was driven by a robust subscriber growth with a marked rise in commercial activities by

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OTH operations. The number of subscribers exceeded 15 million by August 2004, withprepaid subscribers constituting 73% of the total subscriber base. In Pakistan, Mobilinkexceeded the 5 million-subscriber base. In Algeria, Djezzy exceeded 3.4 million

subscribers

BANGLALINK TIGER RUN IN OUR CELLPHONE SECTOR

Banglalink, the most recently acquired subsidiary of Orascom Telecom Holdings. InSeptember, 2004, Naguib Sawiris-the Chairman and CEO of Orascom Telecom Holdingsannounced the acquisition of Sheba Telecom (Pvt.) Limited. The acquisition cost wasUS$60million. The company started its operation in Bangladesh on February 10, 2005with the trade markBanglalink.A robust growth has been seen from the verybeginning of the operation of Banglalink. Surprising Public acceptance resulted to get

nearly 100,000 subscribers within couple of weeks of its launch in February 2005. By theend of May, Banglalinkwas able to get approximately 400,000 subscribers. And now ithas above 900,000 subscribers in Bangladesh which shows the most aggressive growth &an unprecedented success in the mobile phone industry in Bangladesh.

Orascom Telecom Holding was established in the year 1998. After the establishmentOrascom Telecom Holding has acquired nine operating licenses in this region. Now it isone of the leading mobile telecommunication companies of the world which is operatingits business in nine emerging markets in the Middle East, Africa and South Asia. Hugecapital investment and the honest effort of all the employees helped Orascom telecomholding to grab the market share of in the telecom industry of the world within a short

period of seven years. Now Orascom Telecom Holdings is serving to 18 million mobilephone subscriber of the world which is only 3.46% of the total market size of 520million. The capital of Orascom Telecom is estimated at 1.1 billion Egyptian Poundrepresented in 110 million shares. The majority of the share (56.9%) of OrascomTelecom Holding is owned by the Sawiris family of Egypt. IPO (Initial Public Offerings)of US$320 million was raised during the year 2000 which was the largest public offeringat Egyptian Stock Market at that time. To increase the capital, Orascom Telecom Holdingtraded its share in London, Cairo, and Alexandria Stock Exchanges and all these offeringcovers the remaining 43.1% share of the total capital investment.

MISSION

STATEMENT

The mission statement of the OTH is to be the prime telecom operator in the MiddleEast, Africa, and South Asia, providing the best quality services to our customers,

value to our shareholders, and a dynamic working environment for our employees.With this mission in mind, Orascom Telecom Holdings is working effectively to reach itsgoal.

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VISION

Understand people's best need and create & deliver appropriate communicationservices to improve people's life and make it easier.Orascom Telecom HoldingCompany has established some values that inspire its employees to work effectively andefficiently which ultimately helping the organization to reach its vision.

OBJECTIVE

The main objective of the company is to increase the market share in related

diversified products and complete mobility solutions in Bangladesh.

EXISTING DEPARTMENTS

Orascom Telecom Holdingsis providing GSM mobile service in Bangladesh with thetrade markBanglalink.

Banglalinkhas seven functional departments. These are:

1. Marketing,2. Sales,

3. Human Resource,4. Customer Care,5. Technical Department.6. Finance,7. Administration,

Here we focused about the HR department and Marketing department and the functionsof these departments are described below:

Human Resources Department

The Real Tigers Behind the Stripes!

Banglalink, believe that our teamwork is our greatest asset. Useful contributions made byeach individual bring us that much closer to our goals. The Banglalink family is made upof a group of passionate individuals, uniquely qualified from diverse disciplines butworking towards our vision.

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Banglalink ensures for the Tigers/Tigress:

A friendly, professional and mutually supportive environment that encouragesour people to develop their potentials to an optimal level.

A true quality of professionalism that can be found in all world-classmultinational companies

Team oriented professionals, who contribute to the greater whole of theorganization through their participation in decision making situations.

A system which recognizes and rewards groups as well as individuals for theirefforts and contributions to the company

Human resource department plays a very important role in the functioning of theorganization. There are 12 employees in the HRD who are reporting to the Head of HRD-

Mr. Mohammed Allam. The main tasks of this department are employee recruitment,selection, transfer, promotion, training, performance appraisal, manpower planning etc.Different divisions send their personnel requirement to HR department.

Then HRD sets target, prepare recruitment planning and go for the recruitment process.When an employee is recruited a separate employee file is opened comprising of allinformation of the particular employee which is regularly upgraded by HRD. Thisdepartment is also responsible for performance appraisal of employees that is veryimportant for the confirmation, increment, promotion, transfer of employees.

This is done through job analysis, setting up of performance standard and appraisalinterview. Aside from recruiting and training employees, the HR department is alsoresponsible for disseminating internal communication to all users and in the process ofdeveloping compensation packages for its employees, such as medical insurance underthe group plan, life insurance and running several activities such as the VaccinationProgram for all.

Training activities are continuously taking place to develop and hone the skills &knowledge of the personnel, such as the English Language & MS Project Courses forselected employees and conducting a GSM Orientation session for all employees,especially the Sales, Marketing & Customer Care Departments who have to deal withcustomers.

Marketing Department:

The Marketing department consists of a number of sub units which includes:

Value added service (VAS) unit,

Loyalty & Retention unit,

Public Relation & Communications unit, Finance,

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International Roaming unit.

As these teams work under the supervision of the marketing director, so they are fullyresponsible to report to the Marketing Director.

Value Added service (VAS)unit is responsible for innovating and ensuring the valueadded services. The existing value added services includes all the services except callingand text message service. The existing value added services of Banglalink are:

Call waiting/holding,

Call forwarding/diverting

Call conferencing/ T-adda.

Call barring.

Voice mailing/ i-bouble service.Free itemized billing.

International roaming,

Data/fax sending,

Closed user group,

SMS push-pull

Premium SMS

International SMS.

Song dedication service.

The Loyalty & Retentionunit is responsible for the designing of the special offers

launched from time to time in an attempt either to increase customer base or to increaseARPU. The VAS division is responsible for the continuously adding valuable services toprovide a complete solution to existing customers, for example, for making conferencecalling & ring tone/logo downloads possible. These two teams together are in charge ofmaking the customers experience with our network more satisfying.

Public Relation & Communicationunit is responsible for designing and developing allpromotional materials for the marketing of any new product/package and any otheractivities. They coordinate and work directly with the advertising agency and othervendors. While other companies have an entire department for promotions and branding,at Banglalink this division, consisting of only a handful of people is responsible for

this task.

International Roaming unit ensures the roaming facility for the post-paid usersbanglalink. Post-paid subscribers of banglalink is getting international roamingfacility in 120 countries.

Sales Department:

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Sales department consist of a number of sub-division which are linked with each other.All the sales activities of the organization are done by the sales department. Salesdepartment is controlled and led by the Sales Director. Four divisions of the sales

department are:

Direct Sales,

Corporate Sales,

Distribution Sales, and

Sales Support.

Distribution Sales:

This is the largest team in the department. Distribution Sales Department is responsible

for managing the product distriactivities and ensuring the sales targets are met by thecompanys six distributors (Lipro, Asimpex, Butterfly, Propel, Deens & Deshlink). Theyare also responsible to ensure that these distributors and all the dealers who are iperatingunder the distribution team are following the policies of the company with regard topromotions, package offerings, branding, pricing etc. This team works mostly outdoorsand report to the manger of the department in the evening for the completion of all typesof paper work.

Direct Sales:

This sales division helps the company to stay in close touch with its customers and get

faster and more reliable feedback from the sales force. This sales division consists of 23employees. The purpose of these booths is to sell directly to its customers, beside itsdistributors/dealers. The booths were originally established with the idea that peopleprefer to purchase their cell phones from reliable sources and no one can be more reliablethan the company itself. Thus, they provide another mechanism by which the companycan meet and satisfy its consumers communication needs, swiftly and completely.

The direct sales division operates two sales booths, run by its own employees. The firstbooth is located in Gulshan 2, on the 4thFloor of its head office, and the second booth inChittagong.

Corporate Sales

Distribution Sales

SalesDe artment Sales Support

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Corporate Sales:

In comparison with direct and distribution sales, Corporate Sales is very small and thissales division consists of only 12 employees including the manager. They are 3 sub unitsof the corporate sales department:

Large Corporate

SME (Small & Medium Enterprises)

PCO (Public call offices)

Large Corporate Sales deals with the sales activities to the large companies where theysell bulk amount which is more than 30 corporate connections. SME deals with the salesactivities to relatively small companies where they sell less than 30 corporateconnections. PCO sells high value packages to the telephonic business centers which isknown as public call centers.

Sales Support:

This team is the smallest of all the four teams. There are only 7 employees in thedepartment. But, they form an integral part of the department by providing logisticalsupport to the other three teams. Thus, they have to maintain liaison with theProcurement Department which maintains the out sourcing activities from

Kallol Group of Companies

Ring Bangladesh Limited

OrasInvest (BD) Limited

Kallol Group is banglalinkTMs scratch card distributors; Ring Bangladesh and OrasInvestare wholly own subsidiaries of OTH who provide the company with SIM cards, SAF,

handsets, POSM and other logistical support.

Functions of Customer Care Department

After sales service is the heart of the service oriented business and for thetelecommunication industry Customer Relations Division works as the bridge betweenthe customers and the company.People here are always serving the clients. A total of 142people in this division providing customer service are strengthening the relationship of banglalink

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with its valued customers.Rumana Reza, the only female director in the organization, is thehead of the Customer Care Department. This department is divided into three major divisions:

Call Center Unit, (CCU)

Billing Division (BD)and

Support Service Unit. (SSU)

Customer Care Line (CCL)

Call Center:

This division responds to customers' query 43 people are working in shifting basis in call

center to provide 24 hours service to the customers. They receive queries andcomplaints related to banglalink service and network, and provide different types ofinformation and solution to the clients. Mr. Shibu Kanti Ghosh is supervising the activesof call center.

Billing & Credit Management Division:

This part of customer care division is mainly responsible for billing customers andcollecting revenue. This department works with the help of its six units. The units arebank reconciliation unit, bank communication unit, collection unit, credit recovery unit,fraud management unit and revenue assurance unit. Mr. Shawkat Rehman is supervising

the billing and credit management unit which consist of 18 employees.

Support Service Unit:

Support Service Unit is responsible for maintaining the data base profile of thesubscribers. There are 14 employees who are working and maintaining link with salesdepartment to do their respective job.

Customer Care Line (CCL):

Customer care line is the core unit of Customer Care Department which has the direct

interaction with the customers of banglalink. Their job responsibility is to make one-stopsolution regarding any problem, quarry, or services to the banglalink customers.

PRODUCT OFFERING

Banglalink currently has five packages in the market. When the company started out,government regulations had prevented it and other telecom companies from selling SIM

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cards alone, but rather had to bundle them with a handsets. However, this policy has beenwithdrawn ever since BTRCs Teletalk itself started selling SIM cards alone to thepublic.

In fact, according to customer feedbacks, Banglalink packages are all attractive, sincethe connections and monthly line rents are the lowest in the industry, and would haveattracted a lot more customers, if only the network could be improved.

Pre-paid M2M

Pre-paid Standard

Post-paid M2M

Post-paid M2M+

Post-paid Standard

Upper Class

Corporate Products Offering:

M2M & M2M + (T&T INCOMING) CONNECTION

STANDARD CONNECTION

STANDARD (ISD)

DISCOUNT OFFER ON CONNECTION PRICE & MONTHLY FEES

FREE CONNECTION ON MIGRATION

CREDIT

DEAL WITH

MULTINATIONAL

BANKS

Banglalink has signed a credit facility agreement with Standard Chartered Bank in Dhakarecently. It will help them to expand their market rapidly. Under the agreement, the bankwill provide Banglalink with working capital facility including import and post-importfinance of telecommunication equipments and fund collection.

Banglalink is investing in telecommunication equipments for rapid expansion of itsnetwork. Currently, Banglalink network expands to 13 districts and the cell phoneoperator will cover 61 districts by end of the year.

INTIMIDATION AND PRESSURES IN THE TELECOM SECTOR

Bargaining power of buyers isgrowing for Banglalink because: Cellular phonecustomers have significantly high bargaining power because of the low cost ofprocurement of a hand set and SIM card. The industry is at the growing stage and manymore players fighting for market share with competitive price and packages. In thetelecom industry prices are coming down significantly everyday and switching cost

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coming down which is increasing the bargaining power of the buyers. Users of low costpackages may switch from Banglalinkto other packages.

High degree of rivalry in the telecom industry: The scenario of telecom industry ofBangladesh has drastically changed when OTH invested in the country by purchasing100% equity of Sheba Telecom Ltd. Suddenly all other competitors reduced the price asOrascom Telecom Holdings initiated the lowest pricing policy for banglalinkTM. GP,CityCell, AKTEL never reduced their charges for their consumers since banglalinkentered into the market. To sustain in the market, all the players of the market reducedtheir price as competitive low price is offered by banglalink.

As price and quality of service two important factor for the growth market, so all theplayers of telecom industry is giving more concentration on these two issues. Low priceand innovative product and service strategy is the core strategy of the telecom industry of

Bangladesh.

Pressure for the New Entrants Is High: Bangladesh has a potential market for telecomindustry as mobile telephony penetration in the country being somewhere around 8.54%of the total population of 148 million in the country. So, Telecom industry of Bangladeshis now at growth stage, which is attracting the foreign investors of world telecom market.If we look back to the history of telecom industry of Bangladesh we see that, Norwegiantelecom company-Telenor made a joint venture with Grameen Phone, SingTel went intoa joint venture with CityCell, Telecom Malaysia buys a huge share of AKTEL. OTH the leading telecom company of Middle-east owned 100% equity of Sheba Telecom(Pvt.) Ltd. Recently Warid Telecom the 3

rdlargest telecom company of the world has

got license to invest solely in Bangladesh. Foreign Investors like OTH, WTH, SingTel,Telenor are coming to invest in the country as the market is very attractive.

MOBILE PHONE PRICE WAR INTENSIFIES

Cell-phone tariff, after years of having a one-way-street in a captive market, is likely tohead down shortly as the four private sector mobile operators are raring for whatpromises to be a bloody price battle. However, industry people and analysts said the entryof Banglalink in February this year actually initiated the price war among the operators.

The mobile market had first seen the beginning of a price war and a rapid competitivepricing when Banglalink offered a connection and a brand new handset at the lowest startup cost at Tk 3,400 at the time, said a regulatory commission official. FollowingBanglalink, the three early operators also came up with various offers includingincreasing the validity of prepaid cards, conditional reduction of call tariff to woo morecustomers.

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The chief executive officer of Banglalink, Lars P Reichelt, claimed on different occasionsthat Banglalink has brought competition in the market and the prices of connection andhandsets have fallen by almost 40 per cent in the last seven months since Banglalinks

debut.

POTENTIAL COMPETITORS SCENARIO FROM BARRIERS TO ENTRYPERSPECTIVE

Brand loyalty:Due to increasing performance and fastest progress in expansion ofnetwork, banglalinkTMpackages inspire brand loyalty in comparison with the time ofSheba Telecoms operational period. However potential new entrants to the industry will

be deterred by the high brand loyalty to Grameen packages.

Absolute cost advantages & economies of scale: Current players have a more or lessabsolute cost advantage because they have already invested in telecom infrastructure andhave got back a significant portion of their investments. New companies like waridTelecom and OTH will have to invest in equipment and will take considerably greatertime to cover initial equipment-purchase expenses.

Distribution channel:Access to distribution channels is another major barrier to entry.Distributors of mobile phones are becoming very limited for the new entrants as there isalready 5 companies who are fighting for the market share.In all, we see that the barriers

to entry being very high, there is significantly less likelihood of new entrants into theindustry though high market attractiveness is influencing the strong foreign investors toinvest in Bangladesh Telecom Market.

BANGLALINK GET INTERLINKED WITH OTHER SUBSCRIBERS

Mobile company cannot run themselves, so they have to interlink with other subscribers,which gives them an opportunity to operate their service in the industry. Banglalink alsointerlinked with other subscribers.

The state-run cell phone company, Teletalk, Tuesday signed interconnectivity agreementwith the Banglalink ending the sufferings of its nearly 80,000 clients. The Teletalkmanaging director, M Obaidullah, and the chief executive officer of the Banglalink, LarsP Reichelt, signed the agreement on behalf of their respective companies. The Teletalkearlier this week signed similar accords with the three other mobile phone companies AKTEL, CITYCELL and GrameenPhone.

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The Teletalk subscribers were constrained to reach mobile phones of other operators dueto delays in signing interconnectivity agreements caused by conditions put forwarded bythe private mobile phone operators. However, sources said, it may take around a week for

the Teletalk users to get access to mobile phones of the private operators.

BANGLALINK CROSSES 1 MILLION MARK

Mobile operator Banglalink has crossed one million subscriber marks with a networkcovering 425 upazilas of 61 districts in 10 months inside the launch of its services. Thisis a tremendous achievement. We have operations in some other countries. But we havenot had one million subscribers in only 10 months ealsewhere, said Naguib Sawiris,

chairman of the Egyptian Orascom Telecom Holding, which fully owns Banglalink, at anews briefing in Dhaka on Tuesday. One of our main objectives from the beginning ofthe operation was to focus on enhancing the network and coverage, and offeringsubscribers reliable communications. And crossing the one million mark in such a shorttime is proof of the success of our strategy, Sawiris said.

He said by the year-end, 88 per cent of Bangladeshs 140 million people would comeunder the Banglalink coverage. Banglalink is the third largest mobile operators witharound 8 per cent market share. With a plan to target three million more subscribers by2006, Sawiris said Banglalink was one of the priority markets of the Orascom group. Thegroup will make more investments in the future in expanding the network and

introducing new products to ensure the best quality. He said Bangladesh is a goodinvestment destination for telecommunications as the sector is growing very rapidly withthe steady growth of economy.

I am sure the economy will grow further, and of course, the telecoms market is going togrow, he said. He said tariff cuts and a subsidised sale campaign had helped thecompany to grow in the market. Launched in February, Orascom bought Sheba telecomwith only 60,000 subscribers and planned to invest $300 million in network expansionover two years. Bangladesh now has about nine million subscribers, connected to fiveoperators with a penetration rate of around 6 per cent. Telecommunications equipmentmanufacturer Ericsson estimated that the total mobile subscribers will reach at least 21

million by 2007, with a penetration rate of around 14 per cent.

Banglalink launched special promotions valid till January to celebrate theachievement.The promotion package include 88 per cent discount on prepaid mobile-onlyconnections to celebrate the 88 per cent population coverage. The connection price willbe only Tk 132 against its regular price of Tk 1,100. Prepaid mobile-to-mobile plus withBTTB incoming connection will cost Tk 425 against its regular price of Tk 1,400. The

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companys chief executive officer, Lars P Reichelt, and the chief commercial officer,Mehboob Chowdhury, were also present at the briefing at the Hotel Lakeshore.

ENVIRONMENTAL FACTORS AFFECTING BANGLALINK

Warning of Substitute Products:Technological developments have opened up a newdimension in the deployment of creative and efficient telecom services and customer

satisfaction. Mobile telephony is a technological product where researchers are constantlyinnovating ways to improve and make modern lifestyle convenient. New innovation andintroduction of new value added services by one Telecom Company creates strong threatfor other existing companies. Introduction of GPRS and internet browsing facility byGrameen Phone & AKTEL has made threat and affected the business of banglalink andCityCell.

Political environment:Political environment is quite unstable that might affectbanglalinkTMs operation. Frequent change in government policy regarding tax, VAT,import and the like. There are complexities related to law and regulations. Governmentdecision to enter mobile telecommunication industry. Effects of events in international

politics.

Economic Environment:Bangladesh has a very insignificant GDP and GNP. Per capitaincome for the people of Bangladesh is also low. The current inflation rate (more than5%) is higher than what it was in the past years. Sudden rapid increase in energy pricemay have significant impact too. High tax imposition by the government will reduce thebuying power of the consumers. Worldwide negative economic impact after September11, 2001affecting Bangladesh too.

Social Environment:Huge variation in socio-demographic and socioeconomiccharacteristics. In Bangladesh, society is clearly clustered in to different categories along

different dimensions, for example, higher and lower class population in the society.Cultural values are very strong but at the same time, always open to changes and newthings. Concern for quality is less important than concern for price. Most of the peopleare homesick too. Need for affection is valued everywhere. There is moderate diversity oflifestyle. People think more in group rather than individually. Hi-tech products andservices are mostly accepted as luxury rather than necessity.

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Technological Environment: Technologically, Bangladesh is still far behind than thestandard. Lack of technical skill is a regular phenomenon for every industry inBangladesh. Low quality of after sales service in technological products and services.

Moderate focus on the development of technical skills. Lack of skilled labor in theindustry is a commonplace.

NEW BUDGET AND SIM TAX

The news - cell phone operators warn of investment rethink if SIM tax of Tk. 1,200 notlifted - that published in front page of New Age in June 14 is very painful. Where thecell-phone call charge is as high as Tk. 6.00 per minute, I think they had already gotreturn manifolds of their investment. Why are they threatening not to further invest in thisarea? Is Bangladesh not a profit heaven for cell phone operators? Is there any othercountry around the world where cell phone call charge is so high?

Then again the finance and planning minister M Saifur Rahman now shouting against theprivate cell phone operators for charging high call tariff but over the half decade morethan thousands crore taka has been robbed in a sophisticated way. Why the governmentdeclares it today as high call tariff for the people? Is it for what they are going to beimposed Tk 1,200 SIM tax? This tax also has to be paid by the people.

The government and cell phone operators both are blaming each other and targeting onlyfor high tax and tariff none is bothering for the service to the people for a reasonableprice.

However, I like to call all cell phone operators to reduce their call charge and thegovernment to withdraw or reduce the SIM tax if they want this communicationtechnology to flourish further in this country as an association for economicadvancement.

ISSUES FACING BANGLALINK

The poor image of Sheba Telecom: Banglalink was as good as dead, and thus, adog (even in a high growth market) while it operated under the brand name Sheba.However, with the change in ownership, it is giving the star and the second operator ofthe country a run for its money. While it may seem too ambitious saying that it would

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overtake the leader anytime soon, it is certainly a possibility. Banglalink is thus settingup BTS towers at a rate faster than its competitors in order to repair its image as the worstnetwork provider.

Operational issues: Banglalink management has placed one of the highest prioritieson improving its network. In 2005 alone, Orascom plans to invest $120 million,earmarking close to another $300 million for future investments. The company plans toprovide mobile communication coverage to all the 61 districts of the country and itsmajor highways by the end of the year.

Strategic issues: In a country where the mobile telephony penetration is below 2%, thebest strategic move for any operator would be to concentrate on expanding the subscriberbase. For this, packages such as Banglalink s launch offer and its most recent tariffplans are ideal, since like most emerging markets, Bangladesh is also a pre-paid driven

market.

However, in a population where majority of the people live below the poverty line it isdoubtful as to how far the companies can succeed in increasing percentage penetration.Hence, value added services like new and innovative SMS and IVR based products canhelp to raise the level of ARPU from its current position.

CURRENT OPERATIONS OF BANGLALINK

Banglalinkis grabbing market share: The growth rate of subscriber base is astonishing

which already caught the eyes of many business analysts. In the 1styear of its operation,

banglalinkTM was able to hold the position of highest growth rate of world telecomindustry and this growth rate was 1363%. This surprising growth rate reflectsbanglalinks aggressive carriage in grabbing market share. It took banglalink nearly4 months to build a subscriber base of 400,000 and by the end on 9 months operation itbecame a cell phone operator with 1 million subscriber base, while it took nearly fiveyears for its largest competitor to build a subscriber base of 500,000. Currently it hassubscriber base of 1.64 million.

Spontaneous brand awareness:The marketing department is following diversifiedstrategy to crate prompt brand image among the people of Bangladesh. Huge investmentin advertising, sponsoring different types of events, organizing creative e business eventslike Corporate Bazar are helping banglalink to build more awareness among Bangladeshipeople. By the end of one year of its operation, banglalink has a spontaneous brandawareness of more than 78% which is astonishing.

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Rapid improvement in network quality and coverage: During the time of itsinauguration, Banglalink top management has declared that the company will cover mostof the major districts and highways with its network coverage. Banglalink has kept their

promise regarding the network coverage; banglalink network has covered 61 districts andhighways within a time span of 10 months. Siemens Bangladesh limited and Huawi isworking jointly with banglalink to install state-of-the-art equipment for networkcoverage.

Rate of new product and service innovation: If we consider the innovation rate for newofferings it is clear that, banglalik is innovating and introducing new packages and newvalue added services for its valued customers. The rate of innovation is also apprciable,currently banglalink has 3 exclusive pre-paid packages, 13 catagories post-paid upper

class packages and 4 special corporate packages and 1 VIP post paid package for elitepeople are available in the market. New innovated value added services are CallConferencing, SMS Adda & SMSemail. Voice mailing (i-bubble), song dedication, i-topup (balance transfer) etc. are noticeable. Currently banglalink it department is workingon a project to introduce GPRS and MMS for its valued subscriber,

Lowest call rate for upper class (post-paid) subscribers: Most of the Banglalinkpackages are attractive for affordable initial purchasing price and lowest tariff rate in theindustry. Besides monthly rent for the upper class (post-paid) schemes are also lowest. Soit can be said that banglalink is trying to keep its promise to make cellular phoneaffordable for the country people. In other way around, banglalinkTMs lower call rate

offering strategy pressurized the other operators to reduce the tariff rate. Hence, thepeople of Bangladesh are now talking through cellular phone at a cost of only 4.00 TK onan average where only one tear before the average price for 1 minute call was 7 TK. Thecall rate for upper class (post-paid) subscriber is only TK 3.48 / minute which is also thelowest in the in the industry. So, we can say that banglalinkTM is playing an importantrole to make the cell phone more affordable.

FUTURE DIRECTIONS OF BANGLALINK

The ability to expand into new services that require an approach that is compatible with

banglalinks strengths and that compensates for its weaknesses, e.g. provision of wirelessdata transfer services by corporate clients (corporate clients generally require lesstechnical or otherwise support).Integration of new commercially viable packages intocurrent offerings e.g. call & control package (pre-paid facility in post-paid connection)which have been recently introduced.

The growing need for cross-border telecom services at lesser cost (e.g. with neighboringIndia, Burma, then onto Thailand, etc).Expansion into landline services from dedicated

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stations across country that will provide compatibility with other Bangladeshi telecomnetworks.

Higher degrees of public acceptance of new cell phone operator in the country. Economicgrowth of Bangladesh is another opportunity for banglalink.

The mobile industry is growing at a phenomenal pace these days. While it took theindustry leader more than five years to reach its first million subscribers, its last million ithad acquired in a bit more than 2 month period. With an annual growth rate of 132% inthe industry itself, it can be said to be the fastest growing industry in the country. So

Bangladesh is a huge potential market for the cell phone operators. Investors likeOrascom Telecom Holdings, Warid Telecom, Sinktel are investing in the BangladeshCell-phone market. Attraction and investment of the strong foreign investors has createdan immense competition in the industry which is resulting price war and present market isno longer monopolistic, now cellular phone industry is an oligopoly market. So, tosurvive in the competitive industry and to ruin the first place in the industry, banglalinkTMhas to follow mass marketing strategy. At the same time it must innovate value addedservices and lucrative products for the existing and potential subscribers.

A recent trend in the market is that people have more than one SIM card which is ofdifferent operators. They use SIM card of one operator when they see that the package

is more cost effective meaning the operator is charging less compared to other operatorstariff rate. Competitive price-offerings by the operators became a natural phenomenon forpresent competitive industry. To attract potential subscribers, banglalink

TMhas to

introduce technologically updated features and packages and ensure complete mobilitysolution with improved coverage.

BAKLOG of BANGLALINK

Underprivileged network quality: Network quality is a very important tool to evaluatethe service quality of cell phone. As the existing subscribers of banglalink are notsatisfied with the current network condition, so, the top level management of the

company should concentrate on this issue so that they can improve the quality of thenetwork. Banglalink technical department has to be more conscious to ensure best qualitynetwork in the country. High quality BTS (Base Transverse Station) and powerfulequipments set up can increase the quality of network.

Dont have any separate corporate care line: Since the existing corporate subscribersof banglalink are not satisfied with the customer care service, so the company shouldintroduce a separate unit in the customer care department to serve the corporate

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customers so that the corporate subscribers get prompt one stop solution of any sort ofproblem.

Less value added services: Banglalink must add more value added services to its line-up, such as WAP, Data & Fax, etc. recently GP and AKTEL introduced GPRS facility forits subscribers and this service is still not available with banglalink. To compete in themarket, and to satisfy the customers, banglalink has to be up to date regarding theinnovation and introduction of more value added services.

Poor billing delivery: If the customers do not receive the monthly bill on time, orreceive wrong itemized bill, then it directly affect the image of the company. Asbanglalink is way behind the competition regarding on time bill delivery and sometimesit sends wrong itemized bill, so to survive in the competition, banglalink must solve thisissue quickly, otherwise the company will lose its existing clients.

Technological developments have opened up a new dimension in the deployment ofcreative and efficient services and customer satisfaction. Telecommunication industry isplaying an important role in the communication system that has become an obvious forthis modern world and the scenario is indifferent for Bangladesh telecom industry. If welook at the scenario of telecom industry of country we see that people has paidapproximately 7.00 TK/minute charge for the use of their cellular phone. The scenario ofthe telecom industry has totally changed as Banglalink

entered in the industry with the

aim of serving mobile phone services to the mass population of the country so that theentire communication system of Bangladesh develop dramatically.

The intense competition in telecom industry is facilitating the people with reduced tariffrate. Cell phone is no more a fashion in the country rather it became a necessity. Peoplenow have more than one scheme card of different subscribers. So, considering thecompetitive scenario, banglalink must come up with new product and service idea thatwill satisfy not only the existing subscribers but also attract the potential subscribers andthis is the only way how the company can sustain in the intense competitive market in thelong run.

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ORGANIZATIONAL STRUCTURE: BANGLALINK

- 20 -

Rumana RezaCustomer Care Dire

Mohammed Allam

Head of HR

Ezzel M. Heikal

Chief Financing Officer

Parvez Sajjad Mahtaanager

Distribution Sales

Program

anagement

Hassan Samy

Sales Director

Altaf H. Faquih

Admin Director

Mehbub ChowdhuryChief Commercial Officer

Mohammad Mustafa

Chief Technology Officer

Nasar YousufSupervisor

Corporate Sales

Waled El Sonbatycting Chief Information Officer

Omar Rashid

arketing Director

Tanvir Ibrahimanager

Corporate Sales

Kazi Munirul Kabiranger

Direct Sales

Raed El-ShafeiSr. Manger

Sales Support

Lars P. ReicheltChief Executive Officer


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ORASCOM TELECOM HOLDINGS IN VARIOUS COUNTRIES

Country Brand name Market Share

Algeria Djezzy 73.0%

Pakistan Mobilink 63.8%Egypt MobiNil 53.5%

Tunisia Tunisiana 29.4%

Iraq Iraqna 100.0%

Bangladesh Banglalink 1.0%

Congo Brazzaville Libertis 36.8%

Zimbabwe Tel Zim 31.0%

Democratic Republic ofCongo

OasisTelecom

5.1%

BANGLALINK PRODUCT LIFE CYCLE

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V

L

OU

M

E

G

R

O

W

T

H

R

AT

E

Maturity

Growth

Decline

Introduction

TIME

banglalinkTMPLC

In growth stage of PLC, banglalinkTM

and its market characteristics are:

1. Sales increasing rapidly.2. Costs per customer average.3. Profits increasing.

4. Customer type early adopters.5. Competitors increasing; some emulators.6. Competitors strategies attempting to achieve trial; undifferentiated packages,

services; emphasis on fighting for share.7. Marketing objectives rapid share increases/ maximize share.

FIGURES

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The service provider

1.6%

23.0%

14.8%

43.4%

17.2%

Missing

Banglalink

Aktel

GP

City Cell

Figure 1: The service provider users

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- 24 -

The preference

1.6%

25.4%

13.1%

55.7%

4.1%

Missing

Banglalink

Aktel

GP

City Cell

Figure 2: Private subscription beside the corporate connection

network coverage

5.004.504.003.503.00

network coverage

Frequency

120

100

80

60

40

20

0

Std. Dev = .40

Mean = 4.83

N = 120.00

101

18

Figure 3: Service quality in terms of network coverage

hrm360 2014 summer case 3 2 banglalink

Documents

telecom industry

grameen phone

cellular phone service

mobile phone services

new member

service economy

lars reichelt

world war