Origin of the Report
Human history provokes the communication as a very important event in regular life of the people. Since than to make communication easier people has been working on it and finally in the present we see the birth of the initial maneuver and that is the wireless telecommunication. Bangladesh is not far away from such technological involvements, compared with the rest of the world, and has seen a rapid boom in the mobile industry. Within the last nine years, the user base of mobile phones has skyrocketed to massive proportions.
There are currently five competitors in the industry, namely, Grameen Phone, AKTEL, CityCell, Banglalink and Teletalk. Pacific Telecom introduced cellular telephones in Bangladesh using AMPS technology in early nineties. Initially a monopoly, they charged very high for their connections and were affordable to upper-upper segment of Dhaka and Chittagong. Their network was also limited to this Dhaka-Chittagong region. They are still remembered by many for their initial overcharging. In those days, they became a symbol of affluence. 3 years later, Grameen Phone and TMIB came up with GSM technology and soon Sheba Telecom followed suit with WLL technology.
Presently it can be definitely assumed that, the market for mobile telephones in Bangladesh is by any scale, promising. For mobile operators, at least two things are worth to be born in mind. Firstly, the core product itself is a highly technical service, so brand-image and noticeable product features are needed to differentiate the product. Secondly, a recent study indicated that awareness level of the target market is extremely high. Almost everyone who can operate and afford a cell phone knows about the service and also the name of top two operators. So, for top two players, the game is to generate as much trial as possible by converting non-users. Since the market has just started to approach the mass segment, new market penetration seems to be the least expensive strategy.
Broad Objective: To give a very competitive and customer demanding package for the SME segment.
- To understand the nature of the SME segment.
- Understand the talking habit of SME.
- To define the package in appropriate value for money.
- To find the most potential and untapped market for the mobile operators.
This report covers the overall market situation and the SME market demand for the operators and how the 3 operators except GP and Bangla Link can achieve the biggest business opportunity. It also shows the comparative analysis of all the operators. Although the existing two market player for SME in well groove but still they can follow it to improve the target in future.
Report was conducted on the basis of secondary information and the market research done by third parties and the market visit done by the Aktel SME team. Information was collected from relevant papers and documents provided by the Marketing and other divisions, publications of different organizations, daily Telecom news provided by market research department. The steps that can be taken are-
- Identifying the required data category and relevant sources
- Collecting the secondary data from the respective sources
- Compiling the data and analyzing them by using necessary tools and software
- Making conclusions and recommendation
Some limitation can be mentioned which may have to be faced during the preparation of the report, which are-
n As the approach of the study and research was decided by the Marketing division of Aktel, there was some lacking in the market research and consumer survey method and approach.
n Another limitation of this report is the lack of organized data
n The limited scope of primary data restricted the fulfillment of some additional enrichment of the findings
n Sometimes the decisions were come from the top during the internship program, so there was little chance to do some innovative and self-willing works.
Background of the Company
TM International (BD) Ltd. (TMIB), branding its services as “AKTEL” is in operation in Bangladesh since 1997. It is a company incorporated in Bangladesh with the objective of offering the state-of-art and modern telecommunications services to the people of Bangladesh at competitive prices. TMIB received license to operate GSM cellular phone services in Bangladesh in 1996.
The success story started with the commercial launch of AKTEL services in Bangladesh as a GSM 900 cellular phone operator on November 15, 1997. After the tremendous success in Dhaka, TMIB has started its operation in Chittagong in March 26, 1998. In the same year they expanded their coverage in Narayanganj the Business City and an important one closer to the capital city Dhaka. They have also reached the city with biggest beach of the world Cox’s Bazar. Now AKTEL is covering 61 districts of Bangladesh.
AKTEL’s GSM service is based on a robust network architecture and cutting edge technology such as intelligent network (IN). The intelligent network (IN) provides peace-of-mind solutions in terms of voice clarity, wider nationwide network coverage, numerous international roaming global partners, popular value added services (VASs), quality easy-access customer care, round the clock call center operations, ironclad digital network security, competitive tariff rates and precise billing. AKTEL provides standard mobile connections with NWD and ISD facilities. They also provide mobile-to-mobile, Mobile with T&T incoming and outgoing facilities. TMIB has an integrated and fully computerized Customer Care Billing System (CCBS), which supports virtually all subscriber-related functions with its 24-hour customer care service.
As of March, 2006, TMIB has approximately 1,350 staffs composed of locals and expatriates to serve its 36,00,000 (Prepaid- 35,00,000 & Postpaid-100,000) subscribers. Presently TMIB offers GSM digital cellular services in all divisional Headquarters and all major big districts. Beside the basics cellular phone services, the company provides several Value Added Services (VAS) to its customers like, Voice mail, SMS, Tele-info, Tele Ramadan, GPRS, Logo & ring tone download, International roaming, International SMS, Email to SMS and SMS to Email, FunDose, E-fill, and Re-fill and so on.
Through aggressive investment to extend network coverage and improving call quality, AKTEL has been in constant motion to maintain its commitment to provide subscribers the best possible cellular service. This momentum enveloped all (allowed) upazilas by the end of 2006. AKTEL is looking forward to massive investment to target 4.5 million subscribers by 2006, facilitated by more than doubling the number of the base stations. That is, the objective for AKTEL’s communication seems to generate sales and to approach toward building a strong and consistent brand image in the mind of the consumers to provide them a reason to select AKTEL over others.
Share in percentage
TM International (BD) Ltd. (TMIB) was found as a joint company of the Telekom Malaysia Sdn. Bhd. from Malaysia and the A. K. Khan & Co. of Dhaka, Bangladesh.
It operates as a Limited Liability Company, where a founder and a majority shareholder, the TMIB- member of the Telecom Malaysia, owns 70% shares, while the minority shares of 30 % are being controlled by the A. K. Khan & Co. Bangladesh.
TMIB started with six members in its board of directors. Mr. A. M. Zahiruddin Khan was the first Chairman of the board of directors and Hazi Omar Zakir Mustafa was the first Managing Director of TMIB.
Mr. A. M. Zahiruddin Khan was the Chairman of TMIB till March 2005. He passed away on March 29, 2005. AT TMIB’s recently concluded Board Meeting in Kuala Lumpur, Mr. Salauddin Kasem Khan is elected as its new Chairman. Mr. Khan is a founder Director of AKTEL and Managing Director of A.K. Khan & Co. Ltd.
Share in percentage of TMIB & AKTEL
Major Milestones of AKTEL
AKTEL is a mobile operator in Bangladesh, which concentrates on offering GSM communication services for private and corporate customers. The company’s intention is to promote the wireless lifestyle – the complete mobile society. AKTEL is renowned for bringing new service offers in Bangladesh. Below, some of the first time offers are mentioned:
First time introduced the Mobile to Mobile + BTTB incoming facility for AKTEL subscribers through ‘Mobile Plus’ in Bangladesh.
First time introduced the Seamless Coverage through out the Dhaka-Chittagong Highway and named it as ‘Chittagong Dhaka Corridor (CDC)’.
First time introduced the full-fledged IVR (Integrated Voice Response) based Customer Services (Call Center) in telecom market.
First time introduced cellular services in the most northern part of Bangladesh by launching AKTEL Service in Rangpur and Dinajpur in 2002.
First time introduced the automatic system generated bill amount and payment request for the Post-paid subscribers in 2002. The automatic unbarring facility, after necessary payment making by the subscribers, is also a part of this system.
First time introduced Electronic Recharge Facility called E-fill in Bangladesh
First time introduced Message Greeting System with FunDose in Bangladesh
First time introduced 30 second Pulse Rate in Bangladesh. Recently AKTEL has introduced 10-second pulse rate for the pre-paid users and 1 second pulse for the post-paid users.
First time introduced GPRS (General packet of radio service) with two months FREE trial for the post-paid subscribers.
First time introduced Club Membership Offer for the Exclusive users of AKTEL. The club is known as “Club Magnate”, which offers extra services with its Platinum, Gold and Sliver cards.
Vision & Mission:
Vision: To be a leader as a Telecommunication Service Provider in Bangladesh
Mission: AKTEL aims to be achieve it’s vision through being number “one” not only in term of market share, but also by being an employer of choice with up-to-date knowledge and products geared to address the ever changing needs of our budding nation.
AKTEL always strives to uphold the dictum “Customer First”
The Business Slogan “Clearly Ahead”
The whole is the sum of parts and when the best come together; the results can be truly spectacular. TMIB brings AKTEL Mobile phone service, a digital cellular phone service, which will prepare better for life in the fast lane. AKTEL GSM always keeps so near, even when so far.
Strategies of the Company:
Product & Services:
Attractive product packages for segmented customers
Implementation of enhanced messaging and VASs like SMS, FAX & Data, Internet & WAP to increase revenue for airtime usage
Market Promotion & Communication:
Advertisement & Promotion
Press Advertisement, Outdoor Advertisement in Strategic points, Point of Purchase (POP)
Sales & Distribution:
Focus on corporate sales through TMIB sales executive
Strengthen & build up the relationship with dealers & outlet holders
Increase sales outlets in strategic points
Re-alignment of distribution structure
Uniform profiling of sales outlets
Customer Service Management:
Uniform for Customers Relation Executives
Implementation of One-stop Customer Services through improvised billing system
Strengthen fraud management through customized report from billing system
Increase Customer Care Center in different locations
Managing Director (MD)
Chief Financial Officer (CFO)
Chief Operating Officer (COO)
Human Resource (HR)
Chart: 2 (Organogram)
Corporate Strategy (CS)
Corporate Affairs (CA)
The organogram indicates that the top-level management consists of the MD, the COO and the CFO. The chief operating officer (COO) monitors the direct operations of the company, whereas the chief financial officer (CFO) monitors the financial matters of the direct operations. At the same time, they co-operate each other and report to the managing director (MD).
The managing director is the direct supervisor of all the divisions and departments. Currently, there are four divisions and four departments. The chief of the divisions are called the general manager (GM). Conversely, the chief of the departments are called the head of department. Every general manager has an assistant general manager (AGM) and the heads of the departments are on the equivalent rank of the AGMs. Divisions deal with the core activities of the company, whereas the departments deal with the supporting activities. Every division has precise units and there is a head for every unit. Below, a concise description of every unit is specified:
Marketing division constitutes seven units. A brief description of each unit is given below:
Brand and A&P:
Brand and A&P denotes to brand and advertising & promotion. This unit deals with the overall brand management and promotion activities of the company. The unit covers both outdoor (billboards, road-overhead etc) media and indoor (print & electronic) media. This unit is also responsible for communicating with the advertising agencies, since AKTEL does not have any in-house agency. A head of the units reports to the AGM of Marketing.
Product development unit is like the R&D unit of a company, which is responsible for developing new products and services. This unit is closely related to the marketing research unit and together the units come up with new service concepts and ideas. Product development unit is also responsible for monitoring the core services (Pre-Paid and Post-Paid). Like other units, this unit also has a head reporting to the AGM.
Marketing Research and MIS:
AKTEL has one unit covering both marketing research and marketing information system (MIS). This unit conducts quarterly research through research firms and in-house interns. The unit is also responsible to keep track on the latest innovations and new offers of other operators. In TMIB, this unit is not a full-fledged unit yet. There is only one full-time employee and three interns working for the unit.
SME unit right now is composed of five members who are responsible for analyzing the current market situation and about the competitors’ progress. The SME Team generally reports to the Head of Marketing. Although the SME product not yet launched but the research is going on in full fledge. The SME team also responsible for the PCO (Public Call office) products for the time being. In other way PCO is considered a on of the SME product.
International roaming (IR) unit is basically responsible for ISD, international SMS etc services. The core task of this unit is to negotiate with foreign telecommunication companies and to expand the international coverage by making deals with them. There is a head of IR who reports to the AGM.
Corporate sales unit deals with the sales of products and services to other companies. The unit makes agreements with different companies to be AKTEL’s corporate clients and only handle the corporate level sales.
Direct sales unit is responsible for the sales of products and services to the mass customers through the customer service centers. AKTEL has eleven customer service centers around the country and these centers sell the services to the customers directly.
Dealer management unit oversees the dealers of the company around the country. AKTEL has four dealers and one agent and they need to be monitored and supervised constantly. The head of this unit reports to the AGM of Marketing.
Information Technology (IT) Division:
IT division constitutes seven units and they closely work together.
The billing unit is responsible for processing and monitoring the billing systems for the Post-Paid users. The unit has a manager who reports to the AGM of IT.
Value Added Services (VAS):
Value added service is a unit that implements the developed concepts and ideas of the marketing division. The unit is responsible for the development of the software, which will be used for the application of the new services developed by the product development unit. Simultaneously, this unit handles the VAS content providers who are the third party to the company.
This unit is responsible for charging the rates of Post-Paid service. The unit fixes per-minute and pulse rates and also fix the pulse durations. It also changes the rates on demand basis.
This unit only deals with the Pre-Paid service. It administers the e-fill and scratch card systems. At the same time, it fixes per-minute and pulse rates and fix the pulse durations.
This unit is responsible for designing and developing products and services. It develops the blueprint of the product-design.
Billing Operation Team:
Billing operation team is responsible for administering the entire billing process and developing required software for collecting bills from Post-Paid users.
Customer Relations Management (CRM):
This unit supplies required software to the customer care centers and work with these centers side by side. The centers usually inform CRM concerning their necessaries and the unit prepares suitable software for them.
Financial division has eight units dealing with financial matters of the company.
This unit keeps track on the accounts receivables of the company while preparing the balance sheet. As TMIB is a large company with thousands of financial transactions everyday, a unit to keep track on the accounts is necessary.
This unit keeps track on the accounts payable of the company.
Core account is an important unit of the finance division dealing with the budget and fixed assets. The annual budget of various departments is prepared under the close observation of this unit.
Revenue assurance unit consists of revenue assurance and fraud management. Revenue assurance monitors the transactions and assures full protection of the finances. On the other hand, fraud management protects the fraudulences take place in the daily transactions.
Corporate finance unit consists of treasury management and L/C. Treasury management deals with the inflow and outflow of the company, whereas L/C (Letter of credits) deals with the L/C opening banks and other foreign banks.
Taxation unit takes care of the tax, VAT and tariffs of the company.
The reporting unit reports the entire financial transactions of TMIB to the parent company in Malaysia.
This unit forecasts the costing of different departments and reports them regarding the expected expenditure of any alteration.
The technical division consists of three major units – planning, infrastructure and property management.
The planning unit makes plans regarding the technical matters such as the RF, SWITCH etc. They assure the proper placement of technical devices and equipments.
The infrastructure unit selects the locations and builds the base transceiver station (BTS) towers. They are also responsible for the maintenance of the towers.
The property management unit manages the technical equipments and assets.
Human Resource Department:
Human resource department is responsible for the recruitment and training of the employees of the company. They also monitor the performance and handle the promotion and salary related matters. Along with the HR department, there is an Administration. The administration is responsible for supplying furnishings and equipments to all the divisions and departments. They also administer the regulations of the company.
Corporate Strategy Department:
The corporate strategy department determines the long-term strategies and the short-term plans. All the corporate level policies come from them and they are also responsible for the implementation.
Corporate Affairs Department:
The corporate affairs department is responsible for maintaining a liaison with other major companies. Through this department, TMIB makes business deals with other corporations and assist each other.
The coordination department is responsible for the internal and external synchronization. At one hand, they coordinate with outside companies. Along with that, they harmonize among the divisions and departments inside the company.
SWOT Analysis of AKTEL:
From the SWOT analysis, we will observe the strengths, weaknesses, opportunities and threats of AKTEL (TM International BD Ltd.), which is essential in order to determine the present standpoint of the company.
AKTEL is a brand of TM International (Bangladesh) Ltd. (TMIB), which is a joint venture of A. K. Khan & Co. Limited of Bangladesh and Telekom Malaysia Berhad of Malaysia. A. K. Khan & Co. Ltd. and Telekom Malaysia Berhad comprise 30% and 70% equity capitals respectively in this joint venture. TMIB started its operation in 1997 after receiving the license in 1996 to operate GSM cellular phone services in Bangladesh. This venture has contributed both the companies the advantage of risk diversification. At the same time, Telekom Malaysia Berhad has gained strong local network through A. K. Khan & Co. Ltd., which is a well-established company based in Chittagong.
Foreign Knowledge Generation in the Company:
The top-level management of TM International (Bangladesh) Ltd., by and large, consists of foreign personalities. Most of the departmental heads are from Malaysia, India, Australia, and Sri-Lanka. Because of this mix and match of local and foreign expertise in the company, there is a blend of knowledge. Moreover, the generation of foreign knowledge in the company has enabled the company to compete internationally.
Operation in an Aggressive Market:
Currently, there are four major players operating in Bangladeshi market: Grameen Phone (GP), AKTEL, CityCell and Banglalink. All of these companies have foreign alliance and they are highly competitive. To keep pace in this extremely aggressive rivalry, AKTEL has adopted an offensive marketing strategy. Operating in such a market and adopting such strategies have given the company an internal competitiveness, which in turn has allowed TMIB to operate in foreign market with giant foreign competitors.
Strong Brand Image:
TM International (Bangladesh) Ltd. commenced its journey with the brand “AKTEL” in 1997 as the 2nd GSM operator in Bangladesh. Since its inception, AKTEL has established itself into a popular name among the community. Being one of the pioneers, AKTEL has a strong brand image in Bangladesh and people recognize the name instantaneously. This recognition has given the company an added advantage, as TMIB is operating in a very competitive market.
Skilled Human Resource:
Because of its attractive incentive packages and strong brand image in the job-market, skilled workforces have grown an interest towards TMIB. This has given the company an extra benefit, as the company can recruit the finest from the pool of employees. Furthermore, TMIB frequently recruits young, enthusiastic, and resourceful employees from reputed academic institutions. It also provide motivation among its employees by offering extra inducements such as: awarding gold medals to best employees of the year, organizing entertainment programs, providing transportation facility etc. These extra services have enhanced employees’ motivation-level and loyalty.
Non-Political Work Environment:
The work-environment of TMIB is very friendly and co-operative. The practice of internal politics is completely absent and there is an orderly co-ordination among the departments. As most of the employees belong to the same age group, there is a harmonization in the organization.
Collaboration with Diverse Companies:
TMIB has alliance with diverse companies to support its service offerings. For an example, recently, the company has launched a club-membership facility for its post-paid subscribers, named “Club Magnate”. To offer this club-membership, TMIB has collaborated with different companies such as Agora, Malaysia Airlines, Hotel Seagull etc. In a similar manner, TMIB has partnerships with Cineplex, BDJobs, Deshimobile, Fantasy Kingdom etc. These collaborations have contributed the company in cost-efficiency and superior service-offerings.
Collaboration with Financial Institutions:
Apart from having collaboration with diverse companies, TMIB also has collaboration with a number of financial institutions. For example, TMIB has affiliations with HSBC and Standard Chartered Bank for billing and salary purposes. It also has collaboration with EBL and other banks. Because of maintaining an excellent relationship with these financial institutions, TMIB will get the privilege while taking loans or any type of financial services from these institutions.
Unique Service Offers:
TMIB has a well-known reputation of being “The First Ever” in the country. It has always tried to bring something new and exceptional in the market. There are countless services, which are brought by TMIB under AKTEL brand. Some of the outstanding services are: E-Fill, Pulse offer, GPRS (Mobile Internet), Greeting Messages (FunDose), Buy 1 get 1 Free offers etc. By providing distinct services, TMIB has achieved the status of “Fast Mover”.
Customer Care Centers:
TMIB has established several customer care centers in major points of Dhaka city, such as Gulshan-1, Gulshan-2, Dhanmondi, Motijheel etc. Moreover, it has set up customer care centers in major districts of the country such as Comilla, Chittagong, Sylhet and Khulna. There are 11 customer care centers in total and these centers have allowed the subscribers to get free services even staying in remote places of the country.
Friendly Corporate Culture:
The corporate culture of TMIB is famous for being friendly and positive. The company has a “Thursday dress-code” for the employees. It also assembles money from every employee to have tea-break snacks. There is a pleasing synchronization among the staffs, which has built a positive corporate culture.
TMIB regularly takes part in charity functions and is renowned for donating money in different deprived institutions around the country. The company has already donated money, free-books, free-medicines, and free-SIM cards in various schools, madrasas, and hospitals. It is also involved in societal marketing advertising. Recently the slogan campaign of TMIB supporting the autistic children has attracted huge attention.
Poor Work Division Structure:
The departmental structure of TMIB is not precise and well thought-out. Each department contains several units. However, the units are not separated by well-defined boundaries and it is very difficult to distinguish among them. The employees do not have any specific ID to track them separately department-wise.
Lack of Employees:
The departments of TMIB do not have sufficient work force to carry on a thorough task. Most of the employees in each unit are loaded with several duties and sometimes it becomes a burden on their shoulders. Lack of employees in each department is an obvious problem of the company.
High Fixed Cost:
Telecommunication industry has a high level of fixed cost. TMIB, operating in this industry, also faces such disadvantages. Office rent, network tower maintenance cost, operational cost etc are the fixed costs of the company. These fixed costs do not allow the company to gain the advantage of economies of scale, which is essential for the company to perform well financially. Because of high fixed cost and low economies of scale, the company also has a low re-investment rate.
High Employee Turn Over Rate:
As there are four major players operating in the market, it is apparent that each company will try to draw employees from other companies by offering better incentive-packages. This practice has created a high employee turn over rate in TMIB. Every year, lots of competent workers leave the company to join other companies. This has created a major crisis, as TMIB cannot implement any effective long-term strategy.
Poor Network Coverage in Rural Areas:
Presently, TMIB has network coverage in 61 districts. However, most of the upazilas of these districts do not have the coverage. Therefore, despite covering 61 main districts of the country, AKTEL users in rural areas do not get the frequency. This has created a disappointment among the subscriber and hence it is a drawback of TMIB.
Poor Recruitment Policy:
Though TMIB attracts skilled workers from renowned academic institutions all over the country, because of its poor recruitment policy, many undesired employees are hired over desired ones. Sometimes people with objectionable background are hired and sometimes, right people are not hired in right positions. Thus it creates a risk of wasting talents in the company.
Shortages of Equipment Supports:
Many departments in TMIB do not have sufficient equipment support such as: Fax machines, printers, scanners etc. Lack of proper equipments in departments has created work constraint.
TMIB has only 4 authorized dealers and 1 distributor, which is very insufficient for a company covering network in 61 districts. As a result of inadequate number of dealers and distributors, there is high possibility of Gray Marketing. If the SIMs or cards of TMIB pass on the hands of unauthorized dealers, it would be very difficult for the company to maintain a consistency in price and quality.
Incapable Public Sector:
The public sector in Bangladesh is not capable of meeting the market demand of prospective phone users. In addition, the lengthy and bureaucratic process of public offices has discouraged people to use T&T and public mobile phone (TeleTalk). For these inconvenience systems, people in our country have adopted private mobile phone services as an alternative. This is a great opportunity for TMIB to grab this huge market of prospective phone users.
Growing Population Income:
According to World Bank source, the disposable income of people in Bangladesh is increasing every year. In addition, Bangladeshi market has high mobile phone acceptability. Both the factors are fostering the fact that, Bangladeshis is a potential market for mobile phone companies. Operating in such a market is a lucrative opportunity for TMIB.
Business Diversification Opportunity:
Operating in telecommunication industry has given TMIB with the opportunity of business diversification in related sectors. Having the expertise in telecommunication field for a long time, TMIB can expand its business in mobile phone set business, mobile phone battery business etc.
Easy Entrance to Foreign Market:
TMIB has joint venture with a prominent Malaysian telecom company, Telekom Malaysia Berhad. At the same time, operating in an aggressive market has enabled the company to become very competitive. These attributes have permitted the company to have an easy access to foreign market and compete with foreign rivals.
Easy Loan Access:
As discussed before, TMIB has collaboration with a number of financial institutions regarding billing and wage-payment purposes. This has allowed the company to have a good relationship with the institutions. TMIB can take advantage of these collaborations and can have easy access to loans and other financial matters.
Full-fledged GPRS Package:
TMIB has already brought GPRS (General Package of Radio Service) in Bangladesh. However, the service is in its initial stage. Since no other company has brought a complete GPRS package, TMIB can take this advantage and bring a full-fledged GPRS package. GPRS is a completely new technology in our country and it is obvious that the package will be a hot cake in the market.
New Strategic Alliances:
Strategic alliance in telecommunication industry is not a new phenomenon. All the four operators in Bangladesh have strategic alliances with several foreign companies. TMIB can form new alliances with eminent companies of different countries to achieve higher competitiveness and bring more expertise inside the company.
Network Coverage Expansion:
TMIB has already network coverage in 61 districts. However, most of the upazilas and rural areas of these districts are not under the coverage. In this circumstance, to increase the coverage in remote areas, TMIB can utilize its already established towers. Otherwise, they can set up new towers. Establishing new towers will not be a barrier for TMIB, as the company can form collaborations with Grameen Phone or other operators who already have towers in those areas.
Widest Coverage of Grameen Phone:
Grameen phone (GP) has network coverage in 61 districts as TMIB. Yet GP’s coverage is better than TMIB’s coverage, as GP covers all upazilas and rural areas. On the other hand, TMIB provides network only in the city areas. Because of the availability of network in distant places and good frequency, GP has a superior brand image to people. This is of course a threat to TMIB.
Political Instability and Natural Calamity:
Bangladesh is called “red-zone” in terms of political risks. The instability of administration has resulted in unstable regulations. With the change of governments, regulations also change from season to season. This volatility has hindered TMIB from making a long-term effective strategy. At the same time, the country also has a high natural calamity tendency. Natural catastrophes damage the network towers situated in different districts of the country.
Recession in the Economy:
Mobile phone is still considered as a “luxury” in Bangladesh rather than a necessity. Being one of the poorest nations in the world, the risk of recession in Bangladesh is very high and frequent. During the recessions, people are reluctant to invest behind luxury items such as mobile phones. This is a huge obstacle for TMIB to reach all population sectors in the country.
Non-cooperative Telecommunication Regulatory Body:
The regulatory bodies in the telecommunication ministry are unfair and biased. Plus, the system itself is bureaucratic and lengthy in Bangladesh. Because of their non-cooperative attitude and injustice, the usual work-pace of TMIB is slowing down. This is of course a risk to the company.
Customer Resistance against Tariff:
Any new tariff or VAT is always a controversial issue to the people of our country. People in Bangladesh are reluctant to accept new tariffs and it takes a long time for them to approve it. In the recent budget, the government has imposed a tax of TK.900 on every SIM card, which has created a huge debate and protest among customers. Many of the customers have stopped buying SIM cards. This tax has also hindered the mobile operators to maintain a constant price level and to offer attractive packages.
Existing Competitors in the Market:
At present, there are four private and one public mobile phone operators operating in the Bangladeshi market. All of the private operators are aligned with foreign companies. These companies are following aggressive marketing strategy and the level of rivalry in the industry is very high. The companies are trying to bring new and attractive offers every week at a striking price level. This high intensity of competition in the industry is a major threat to TMIB, as TMIB has to survive this fast paced competition.
Upcoming Competitors in the Market:
Besides the existing competitors, new and large competitors are also trying to enter the Bangladeshi market. Some of these companies are Reliance, Tata etc. These new companies will increase the rivalry level in the industry.
Private T&T Phone Companies:
Apart from the new and existing mobile phone operators, competition is also expected from private T&T phone companies. Because of the inadequacy of the public T&T Company, many private companies are coming in the market. These companies are also a threat to TMIB, as they offer similar services at a lower price to customers.
Possible Health Risk from Mobile Phone:
Recently, a scientific study has shown that there is high risk of health hazard including brain tumor and cancer from the usage of mobile phone. The study concluded that long time use of mobile phone might cause such diseases and so people should reduce their use of mobile phone. Though there is no solid evidence of this fact, it has created an argument and panic among mobile phone users. This is naturally a threat to TMIB.
Legal Issues & Problems Faced by AKTEL:
The Legal issues and problems faced by AKTEL are not indifferent from other mobile companies in the industry. The companies more or less face alike problems. The legal issues, procedures and problems are discussed below.
By paying some fixed amount of fees one can get the license. But the companies need to pay tariff on monthly basis. There is a clause in the license that for every handset tk.1, 100/ yearly loyalty needs to be paid. The customers are reluctant to pay this, so are the mobile operators. Both of the parties are not paying the loyalty fees and government did not even cancel the clause. So huge amount of money is due by the companies to government.
Reduction in tariff rate:
Government pressurizes mobile companies to reduce the tariff rate. Yearly, the companies need to verify with the government regarding the tariff rate. The government makes sure the companies provide standard services to the customers.
All mobile companies need to pay 15% VAT. This is a sector where the government does not have any investment while enjoying the revenue. This is unique to Bangladesh. Users are paying the 15% VAT which they do not want to pay.
Every year companies pay large amount of taxes. The companies need to pay taxes even for the equipments they purchase. Recently, the government has imposed a sales tax of Tk. 900 on the purchase of each SIM card. A survey has been conducted to assess the impact of the introduction of the new tax, which shows that the growth of new subscribers dropped by two to seven per cent in June 2005. During June, only 76000 new clients were added.
Inter-operator problems came into being when different mobile companies came into the market. When there was GP and AKTEL in the market, both of the companies faced problem while doing business. There was a lack of infrastructure in the industry. Problems aroused in the field of inter-operator connectivity. At that time “Sender Keep All (SKA)” was in practice.
As long as there were equal amount of traffic there were no problem. But there was a time when, more tariff congestion came from AKTEL. GP asked AKTEL to share the profit. As AKTEL denied, GP started to block the calls coming from AKTEL. It created unnecessary system overload. In order to put an end to the problem AKTEL agreed to share the profit thus “call termination peak/off-peak” was introduced. And equilibrium prevailed in the market.
Though TMIB (AKTEL) is a well-established company in Bangladesh and running successfully in the domestic market, it has a handful of internal weaknesses. Together with those weaknesses, the company is facing numerous threats. TMIB has already identified some of the major weaknesses and is trying to recover from them. However, there are some unidentified, neglected areas, for which it has not taken any effective measures yet. Therefore, the company needs to focus on the following recommendations by adopting better strategies:
TMIB should develop a well-structured work division by separating the departments and units by a well-defined boundary and assigning specific tasks to each unit. The employees should carry distinct ID cards so that they are identified unit-wise.
The company should recruit more employees in each department as it is lacking adequate workforce. Thus, the burden on the shoulders of the employees would be lessened.
The company should try to achieve economies of scale by lowering its fixed costs or escalating revenue to build entry barrier in the industry for the new competitors.
The company should reduce its employee turnover rate by offering high incentives and attractive salary packages, which is crucial for the company to survive in this high competitive industry.
Though TMIB has network coverage in 61 districts, most of the upazilas are not covered. Therefore, the company should try to cover its network in all the important upazilas of each district as like GrameenPhone to increase its subscriber base.
The recruitment policy in TMIB is not satisfactory. The HR department of the company should be extra cautious while hiring the right employees in the right place.
The company is facing equipment shortage in every department, which is of course an obstacle for the employees. The company should bring necessary equipments such as FAX machine, scanners, printers etc for each unit.
Because of the insufficiency of authorized dealers, the company is facing the threat of gray marketing. TMIB should employ more authorized dealers in order to prevent gray marketing.
TMIB should offer installment system for buying SIM cards, because of the recent VAT of Tk. 900 on each SIM purchase. Many potential customers are reluctant to buy mobile phone lines because of the high cost involved in it. By offering an installment system, these customers would be encouraged to purchase SIM cards.
Nonetheless, even after confronting such risks and having internal weaknesses, TMIB has maintained its dominance in the industry. The company has achieved many competencies through its operation since 1997 and is trying to recover from its weak points. Though other operators are trying their best to beat “AKTEL”, TMIB is still ruling the industry with the promise of being “Clearly Ahead”.
Industry Analysis: Overview of Other Mobile Phone Operators in Bangladesh:
Grameen Phone launched its service on the independence day of Bangladesh on 26th March 1997.
Table 1: GrameenPhone – At a Glance
|1||Obtaining License||November 28,1996|
|2||Commercial Launching||March 26,1997|
|3||Products||Post-Paid and Pre-Paid|
|Post-Paid||GP Regular: Both way BTTB Connectivity + ISD connection|
GP National: With BTTB Incoming Connectivity
GP- anytime 300
GP- anytime 450Pre-PaidEasy Pre-Paid
DJuice4Sales & Information centersGP has sales and information centers in 6 districts.5Network CoverageSo far, GrameenPhone has covered 61 districts along with all divisional H/Qs.6
TechnologyGP uses GSM (Global System for Mobile) technology
Source: Newspaper Clippings and Website
Table 2: Customer Growth of GrameenPhone
|Year||Customer Base||Growth Rate||Remarks|
Average Growth Rate: 123 %199830,00067%199960,000100%2000193,000222%2001470,000144%2002750,00060%20031,050,00040 %20053,699,000252%
Source: Newspaper Clippings
GrameenPhone became the first mobile phone operator in Bangladesh to offer its subscribers International Roaming facilities in March 1999.
GP subscribers who have the International Roaming facility can use their mobile phones in foreign countries where GrameenPhone has partner networks. Subscribers of partner networks will also be able to use their mobile phones while visiting Bangladesh.
Advertisement & Promotion
GP has managed to develop and design the A&P materials from in-house since GP has its own DTP (Desktop Publishing) unit. However, at the early stage of service, GP appointed Roop Adverting Agency as GPs adverting agency.
GP has a very affluent Branding team and already established an accountable image in Bangladesh market as GrameenPhone …in the hands of the people…
CityCell was offered a cellular license in Bangladesh by the Ministry of Post and Telecommunication on March 1990. In June 2005 45% share of City Cell has been acquired by SingTel (Singapore Telecommunications Limited).
Table 3: CityCell – At a Glance
|1||Obtaining License||March 1990.|
|2||Commercial Launching||August 1993.|
|3||Products||Post-Paid and Pre-Paid|
|Post-Paid||Shabar Phone (Mobile 250)|
CityCell PremiumPre-PaidAalap 24, Aalap B, Aalap Call me4Sales and information centers2 in Dhaka, 1 in Chittagong and 1 in Syhlet.5Network CoverageCitycell has covered 47 districts along with all divisional H/Qs6TechnologyCDMA
Source: Newspaper Clippings and Website
Table 4: Customer Growth of CityCell
|Year||Customer Base||Growth Rate|
Source: Newspaper Clippings
Benefits of CDMA
Superior voice quality and clarity by eliminating background noise.
Low power consumption; hence higher talk time, enhanced battery life.
Minimum health risks compared to other wireless technologies.
Increased security and privacy as none other then the called person can listen to your conversation.
Higher data transfer rates.
Reduced interference on other electronic devices.
Sheba was offered a cellular license in Bangladesh by the Ministry of Post and Telecommunication on November 11,1996. Sheba launched its service on August 31, 1998. Later on Orascom took over the company, now it is called Banglalink.
Vision of Banglalink:
“Banglalink understands people’s needs best and will create and deliver appropriate communication services to improve people’s life and make it easier”
Table 5: Banglalink – At a Glance
Pre-Paid M2M Plus
Pre-Paid StandardPost-PaidPost-Paid Standard (350 Tk. Monthly line rent + ISD)
Post-Paid (350 Tk. Monthly line rent + PSTN-Incoming + outgoing)
Post-Paid Mobile to Mobile (150 Tk. Monthly line rent)2Sales and information centers2 in Dhaka, 1 in Chittagong and 1 in Sylhet3Network Coverage40 districts along with all divisional H/Qs4TechnologyGSM
Source: Newspaper Clippings and Website
State-owned TeleTalk Bangladesh Limited launched its commercial operation on 31st March 2005 as the country’s fifth cellular operator and first ever in public sector. The company managed by fixed phone operator Bangladesh Telegraph and Telephone Board (BTTB) would spend about USD333 for its 250,000 GSM mobile phones.
Table 6: Customer Base of TeleTalk
Source: Newspaper Clippings and Website
Market Share of Mobile Phone Companies in Bangladesh:
Presently, AKTEL has a total market share of 25% with GrameenPhone having 62%, CityCell 7%, and Banglalink 5%. The new public company, TeleTalk, has a share of 1% within the span of 1 month since its inception.
Table 7: Market share of the mobile operators
Source: Newspaper Clippings
Chart 3: Market Share of Mobile Companies in BD
Source: Newspaper Clippings
Table 8: Strategies and slogans of mobile operators
|CityCell||Proven dependability||Because We Care|
|Banglalink||Making mobile affordable||You, First|
|GrameenPhone||Communication for every body||In the hands of people|
Source: Company Website
Table 9: A Comparative Study of the Mobile Phone Companies
|Operators||Technology||Date of launching||Ownership||Equipment Suppliers||No’s of subscribers|
GSMNovember”9770% Telekom Malaysia, 30% AK khanAlcatel,
39% Grameen TelecomEricsson6,000,000
CDMAAugust”9355% Pacific Group, 45% SingTelMotorola750,000
GSMSeptember”98100% Orascom Telecom LimitedSiemens, Huawei1,000,000
TeleTalkGSMMarch 2005100% BTTBAlcatel, Siemens100,000
Source: Company Website
Barriers to Entry:
Analysis on the overall telecommunication industry in Bangladesh shows a high barrier to entry in the industry.
The barrier is high because-
The entry involves a substantial capital requirement/initial investment (such as setting up network towers, tower maintenance cost, government tax, administrative cost, HR cost, promotional cost etc.)
Because of the high fixed cost involved in the operation, it is hard to achieve the desired level of Economies of Scale.
Switching cost in this industry is very high and involves a large capital loss.
Bangladesh is a too risky market to penetrate successfully (high political and economical risks, uncertain weather conditions etc.).
The industry faces high government restrictions due to their complicated policies such as the enforcement of recent VAT policy of TK.900 on each SIM card.
The brand identity/image of five present operators (GP, AKTEL, CityCell, Banglalink, TeleTalk) is highly strong in the market, which will make it difficult for the new entrants to make an individual identity.
Due to the absence of proper patent rules on technology, the practice of imitation is high and there is no protection on intelligence flow from companies to companies.
The only factor making it easy for the new entrants is the access to distribution channels (dealers, distributors), which is high.
Rivalry among Existing Firms:
Analysis on the overall telecommunication industry in Bangladesh shows a high level of rivalry among existing firms due to the following reasons:
Telecommunication industry is a fast growing industry in Bangladesh. Therefore, the level of competition is high since the companies have to cope up with the fast changing needs of customers by offering new services on a regular basis.
The practice of aggressive marketing, which has created a promotional battle among the companies, has intensified the rivalry.
Telecommunication is an industry with high fixed costs. This has enhanced the competition among the operators, as the firms are forced to cut price to enable them to operate at capacity.
Differentiation, both real and perceived, among competing offerings is low, which further has boosted the rivalry in the industry.
Difficulty of exit from the industry has increased the level of competition.
However, comparing to the market size of mobile phone users in Bangladesh (the potential market size is 15 million; source: newspaper), the number of competitors in the industry is low. There are only 4 private and 1 public companies operating in the industry. Among these companies, only 4 offer GSM technology and 1 offers CDMA technology. Low number of competitors has narrowed the competition to some extent.
Analysis and Recommendations:
SME Segment Strategy for AKTEL
Medium Enterprise: Companies/organizations with 50-99 employees and/or investment of more than Tk. 10 lakh.
Small Enterprise: Companies/organizations with 1-50 employees and/or investment of less than Tk. 10 lakh.
According to Bangladesh Bank,
- The average size of the SME is 5 (Five) workers (this includes the proprietor)
- The median size is 2 (Two)
- 90% of all enterprises have 10 (Ten ) workers
- Enterprises with just 1or 2 (One Or Two ) workers represent 60 % of all enterprises
Thus Average number of workers working in an SME is 5 (Five)
Why we should focus on SME Segment?
- SME segment constitutes a significant portion of the market that tends to be loyal customers. This segment provide high revenues compared to their market size, and is better addressed quickly and retained than tried to be lured away from other operators.
- Till now no other operator has come up with any useful product for the SME segment.
- 85% of the SME market is still untapped.
- Other competitors are taking this segment as a priority segment and will be trying to capture the market as soon as possible.
- According to a research made by CATALYST there are 6 million small & big SME’s in Bangladesh. Among these SME’s officially registered a significant portion falls under the SOHO segment & financially constrained segment.
- ARPU in SME segment is higher than the mass segment.
SME is the most prioritized sector by the government, as it is believed that SME’s will play the biggest role in the economic development of the nation.
Segment Strategy: SME
AKTEL offer for SME will differentiate from the competitors on three main points:
- RELEVANT – best understanding of the customer (product/tariffs offers, communication and distribution tailored for small business, );
- AFFORDABLE – Reasonably priced standardized tariff.
- HIGH QUALITY – best customer service (both before and after sale) and connection.
Understanding the SME Segment
Sampling: The sampling method for this research was Extended depth Interviews and the sample size was 23. The segment wise of different SME which were interviewed are given below:
51 – 100 employees
21 – 50 employees
2 – 20 employees
The SME Psychographic Analysis will help us in understanding the behavior pattern of the SME segment as well as their expectations form a telecom operator.
Small Enterprises & medium enterprises
Advertising agencies, Export/Import companies, Buying and selling stores, Construction building, Media, Airlines, Brokers, Hotels, Hardware/software vendors, small manufacturers, Suppliers/service companies, Transport companies, Engineering companies, Trading houses, Association of professionals
Advanced product feature:
Small & micro enterprises
Companies registered under trade license. Agro Based, Handicrafts, Small Association: Cooperatives, Small Agriculture Sectors, Shopping Malls
Basic product feature:
SME Brand proposition
Target consumers: SME is defined as companies/organizations with 1-99 employees.
Competitive environment: The competitive environment includes the other mobile operators as well as other communication media such as land phones, courier and fax.
– Mainly need based communication.
– High value for money seekers.
– Low interaction with VAS.
– Operates within a huge sphere: needs a large network.
– High dependency on voice/personal contact.
– Very high frequency of communication
– The Efficient Organizer – helps me manage day-to-day life.
– The Relationship Glue – staying in touch with close contacts.
– The Only Savior – in emergency situations.
– The Smart Choice – the best package for me.
– Group Talk Facility and Business Partners.
– Savings schemes with banks.
– High saving tendency
– Little space for self
Reasons to believe:
– Customer focused products and services.
– Has a customer over three million.
– Nationwide coverage from Teknaf to Tetulia across 61 districts.
– Packages that meets my exact needs.
– Communicating effectively for Business Excellence
– Helping me make the most of every business opportunity.
– Enabling me to make the most of Every Business Opportunity that Comes My Way.
AKTEL’s Vision & Mission for the SME segment
Vision: AKTEL will take leadership in providing the most relevant, affordable and high-quality communication services for small & medium businesses.
Mission: The offerings would aim at providing effective, value for money proposition and simple, easy to use solutions that would make the clients’ operations more efficient and businesses more profitable.
AKTEL SME segments SWOT
1. Image of an honest operator.
2. Good network coverage
3. Good customer care
4. Telecom Malaysia Joint venture
5. Available funding to develop the segment
6. Responsive coverage planning function to rollout the network
7. Consumer focused
1. No customer credit for calls (including roaming);
2. Network congestion
3. No specific product for SME
4. Bad coverage on roads & rural areas
5. Bad Position on corporate market
6. Not very much control over dealers
7. No own stores
8. In generally viewed as follower of GP
1. Use the first mover advantage with the specific offer for SME
2. Growing market with high ARPU
3. Penetration rate is still very low
4. Use non-traditional channels of communication (SME associations, governmental organizations)
5. New product offers in 2006 that none of the competitors yet have
6. Enhances the opportunity of carrying a more localized image.
1. Competitors reacts fast or comes to the market with SME offer first
2. Dealers will not completely cooperate
3. Political instability before elections
4. Internal structure will slow down fast implementation of SME project
5. Perception of AKTEL as user friendly brand is being lost
184.108.40.206 Actions from the SWOT
- Be the most organized mover on the SME market.
- Identifying the scattered SME subscribers of AKTEL
- Launch a new product offer for SME
- Improve coverage on the disturbed zones.
- Establish a separate SME customer services
- Establish a good relationship during the year with business associations and government bodies involved with SME (If possible make agreements)
- Review relationship with dealers and provide incentives so they are more willing to sell to SME
- Design customer life cycle management system to ensure the best service and retention of the customers on every life stage
Competitor Analysis – Strengths
Competitor 1GP: Key strengths (threats)
- GP has launched a product named Business solution, which is targeted for both Corporate and SME’s.
- Connectivity: All mobile numbers, fixed phone numbers and international numbers
- International Roaming: Receive and call while traveling abroad
- Closed User Group (CUG) : Special tariffs for talking among company employees
- Friends & Family (F&F): Special tariffs for 3 selected numbers
- Call Conferencing: Connects up to 5 calls at a time
- Caller ID: Shows who is calling you
- Call Divert: Forwards call to any selected number
- Call Barring: Bars incoming and/or outgoing calls to protect unauthorized use
- Call Waiting: Holds three calls on wait while you are busy with a call
- SMS plus, SMS banking, SMS information services, mobile phone profiling.
- Advanced messaging services
- Internet & data service (edge)
Competitor 2 Banglalink: Key strengths (threats)
- Banglalink came up with a product called Banglalink Professional which is co branded with Eastern bank. Only EBL account holders will come under this package.
- 500 taka M2M connection & 1250 tk Standard connection
- Minimum 2 connections have to be bought.
- If 4 connections are bought then One motorolla c115 set will be given free
- EBL will provide debit card on business account
- On line transaction in any Ebl branch for one year will be free.
- 90% OD facility on FDR balance
- Business loan facility
- Association with Katalyst (More Business)
- Subsidized Package
- Fast response to market/customers
- Strong Mother brand (Orascom)
- Strong presence in the region (Pakistan)
- Experience in operating in similar economic environment (Mobilink, Pakistan)
- Strong financial liquidity
- Quick to react and changing the market perception about mobile tariff
- Very aggressive in employee and customer acquisition
- Fast expanding network
- 3rd party distribution (Ring)
Competitor 3 CityCell: Key strengths (threats)
- SME segment prioritized
- Good access to information on SME
- Decision hierarchy very prompt
- Low tariff structure
- Political affiliation
- Recent acquisition by Sing Tel.
Competitor 4 Teletalk: Key strengths (threats)
- Government and political backing
- Free TNT incoming
- Low tariff
- Data service
- Nationwide PSTN connectivity.
Marketing mix in 2006 will be based on AKTEL long-term vision for the segment.
AKTEL will take leadership in providing the most relevant, affordable and high-quality communication services for Bangladeshi small & medium businesses.
Main priority for this year is the launch of SME product so that it allows us to offer a unique product for the SME that boosts sales and increases glue to the customer. Product configuration will be based on SME customer needs research. Existing products that should have priority for SME in 2006: GPRS, F&F, SMS and International Roaming.
New products that should have priority for SME in 2006:
- Group talk facility
- Mobile banking
- High amount of balance transfer
- Deposit savings scheme
- 2-3 simple & standardized tariffs for SME (no special discounts)
- We will review our current tariffs and make a new offer in order to start more SME specific communication.
- Our tariffs will be at least 10% lower then min competitors offer;
- Existing tariffs for SME should underline CUG & flat tariff as main advantage
- Consider possibility canceling the provision of connection fee.
- We will also offer special tariffs to SME sub-segments to satisfy their specific needs:
- Regional based tariff discounts for High and Low SME.
- Special offer for SOHO – private entrepreneurs – that will allow them have discounts for weekend calls (for those who trade at bazars and markets).
- Other offers based on SME customer needs analysis.
- The telesales team will be collecting and validating database of the SME so that sales team can hit the market
- Direct sales team will go and sell the product.
- Indirect sales team will be making sales through business dealers and sales agents.
- Business dealers will be making sales through sales representative.
- Sales can be also made through the co-partners. (Involving BRAC, MIDAS, BSCIC etc.)
- Specific and standardized sales scheme for SME.
- Promotion tactics for SME should be based on overall strategy for “AKTEL” brand positioning.
- Main goals for communication are:
- Exclusively separate offer from other AKTEL offers for the SME segment.
- By the end of the year reach 50% awareness of SME offer as: most relevant, reasonably priced, high quality communication service (according to the vision).
- Identify three most effective channels for communication with SME.
- Research Bangladeshi SME landscape in order to identify the most influential and popular organizations/venues among SMEs.
- Investigate opportunities to initiate activities through those channels in order to more potential customers through non-traditional channels.
The Structure of AKTEL SME Unit :
MARKET PLANNING, MARKET INTELLIGENCE
TELEMARKETING & TELESALES
: Prospect Identification
, Routine visit
, Maturing sales
, Sales planning
, Collecting area wise sales information
, Analyzing competitor’s activities.
Indirect Sales Activities
: Developing channels
, Generating sales
, Monitoring channels
, Analyzing competitor’s activities.
: Develop Prospects and clients through telemarketing
, Keep close look on existing clients
, Different customer development & retention program.
: Develop database of Prospects and clients,
Maintaining client portfolio
, Use database for different customer development & retention program.
: Market Planning & Development
, Demand Analysis
, Revenue Planning
, Revenue monitoring
, Product Planning
, Brand planning
, Event and activity planning
, Market Analysis,
and Competition Analysis.
: Paper payment reconciliation
, Commission calculation and disbursement
, Monthly/ yearly monitoring of sales/stock performance
and Preparing all the reconciliation reports.
SME proposed product:
Unique Need & Need-based solution
SME Uniqueness From the psychographics research the unique needs of SME’s have been identified:
Frequent communication with the business partners (both backward & forward)
Ease of entry/ start up cost
Communication need with the family and the Bank
Ease of entry cost barrier/starter up cost (connection fee): It is seen from the research that entry cost barrier plays a very important role in SME’s buying behavior.
Reasons to believe: The SME’s are already users of mobile phones of different operators. The SME’s value every single penny they are spending because of low business capital.
Solutions for Entry barriers:
1. Down payment-
- Customer has to pay 50% of package price at the time of purchase if minimum 2 post-paid SIMs is bought.
2. Remaining payment by 5 Installment-
- Installment amount has to be paid with monthly bill.
- If a SME buys more than 5 SIMs then connection price of one SIM will be rebated.
- If a SME takes connection of 10 SIMs then a handset can be offered to him.
For getting installment privilege, customer has to provide the followings-
- Copy of trade license
- Minimum stay commitment- 36months.
Frequent communication need with the business partners: It is seen from the research that SME’s has the need to communicate with their business partners frequently. Most of the SME’s talks with Business partners (i.e. both backward & forward linkage in their business). Frequent/infrequent & long duration call pattern in case of following people
- Partners/friends in same business field
- Managers/second in command
Business communication solution: It is seen from the psychographic research that medium & a portion of small SME’s prefers post-paid connectivity but a subsequent portion of small SME’s finds pre-paid more convenient.
Strategy -1 ( Post-paid):
- Line rent will be waived if airtime crosses tk.1000 in a month.
- GROUP TALK facility will be offered if more than one SIM is purchased. This applies only in the business hours because SME’s mainly communicate during the business hours.
- SIMs bought under GT will have BP facility to 3 AKTEL numbers but the master SIM will have BP facility to 5 business partner number. 1 number can be chosen from other operator.
- 2 AKTEL BP numbers can be changed within 1 month but in case of other numbers 3 months required.
- It is seen from the research that SMEs have frequent short duration call pattern in case of: Wife, Parents, and Friends.
Solutions: Short duration call facility will be given. If the call duration stays within 1 min then the SMEs will get a low tariff. This will encourage the SMEs to call more to his families & friends.
Communication need with the bank: It is seen in the research that bank plays a vital role in a SME’s day to day activities. Communication transaction between a bank & a SME is very high because bank manages all their monetary issues such as collection & payment. Bank also plays a source of information regarding:
a. Account balance check
b. Payment status check
c. Any new scheme by the bank
d. Payment of utility bills
Communication solution with Bank: To make the banking communication needs of SME’s more convenient the following services can be provided to the SME’s
- SMS Banking service. Through this service the SME can check his bank account balance, pay his utility bills through SMS, gain bank related information.
- Voice SMS service. Through this service the SME can get Bank related information , check his account balance.
Savings need of the SME’s: It is seen from the research that SME’s have a need for saving money for the future of his children’s, Re-investment in business’s, for buying something for his old father/mother, for the repayment of his loan.
Customer deposit schemes-These scheme will be available for SME’s who are the post paid users. If the user pays more than 1200tk then 10% of this money will be deposited in a bank account and after 36 months the accumulated amount will be given to him as a reward.
Proposed Package Features of AKTEL SME
- Low startup cost or no start up cost at all.
- Discounted line rent or no line rent at all.
- Flat tariff during the peak business hours(9am-12.30p.m) & again at (5pm-8pm)
- Ensure the users uninterrupted service throughout the day.
- SME’s has the tendency not to switch their existing number because the number is well spread out. In this case the user can get certain amount of free calls so that he can circulate the new number.
- At least 5 F&F numbers with one number applicable to all operators.
- Easy payment options such as auto payment from their accounts or mobile banking.
- A good quality handset (with MMS) can be offered to the SME’S through micro credit program with certain banks.
- If anyone buy at least 3 SIM’S then group talk facility can be given between those numbers
- If the SME subscriber is existing AKTEL user then easy migration facility can be provided that the user does not have to change the number.
- If the subscriber makes a certain amount of usage then he can enjoy an auto saving scheme. Certain amount of money will be automatically transferred to his bank account, which can be en-cashed.
- Phone book mapping facility
- BTTB incoming free during peak hours for certain period.
- Reduced rate SMS facility and MMS facility can be provided.
- SMS to at least one international number can be given free.
- Any amount of balance transfer can be given to one AKTEL number free of cost.
- The money earned through the auto saving scheme can be transferred to another account apart from the users own account. Thus the owners of that account can en cash it as well. In this case the user has to select the other account once.
- If a SME can influence his backward & forward linkage partners to use AKTEL SIM with certain amount of usage then every month the user will get certain free air time.
- The SME can be given an option of making payments up to certain amount to his backward& forward partners through his mobile phone. The money would be transferred to the other person’s bank account.
Other Identified Needs:
The psychographic research has identified some common needs of the SME segment such as:
- Old number migration
- BTTB incoming facility
- Never loosing any opportunity- Always keeping me connected.
It is seen from the research that SME’s has tendency to stick to the number they currently have.
Reasons to believe: The number is well circulated amongst his business partners and changing a well-known number is a hassle for him/her. It is seen from the research that SME’s has BTTB incoming & outgoing need. He does not want to miss any business opportunity and thus wants to be connected in every possible means.
Standard connection: It is seen from the research that SME,s always want to stay connected no matter what happens because they do not want to miss an opportunity to do a business.
- Regular billing up gradation through bill posting through courier, fax, SMS etc.
- Incoming call from mobile phone will be never barred even if subscriber exceeds credit limit.
- Missed call alert in case of phone is switched off.
- Alerting the person through voice mail before he is close to his credit limit.
- Dedicated round –the clock unbarring credit control team
- Auto unbarring system after bill payment thru scratch card by using 8PAY.
- Automated answering machine function
SME Push-Pull hotline services
Geographic Location based Push-Pull services:
Static & Dynamic Data:
- Health service: Hospital, clinic, Diagnostic lab, Drug shop, Doctor
- Security: Police station, RAB, Fire service, Private security
- Travel & Transport: Bus & railway schedule, flight schedule, Taxi cab contact number
- Hotel, Restaurant
- Bank & financial institution information
- Vocational training institution information
- Foreign Currency exchange rate
- Commodity price
- Shopping information
Service delivery process may be as follows:-
- Customer to call Hotline number over his/her phone
- SME customer care hotline staff to log in Database as per customer query
- SME customer care hotline staff to give answer over phone & by SMS confirmation.
- Service charge: Customer has to pay for each Push-Pull hotline call @Tk. 3 (excluding VAT). Pls. note that SMS confirmation charge also included in Tk. 3.
Hotline implementation plan:
- Marketing to provide all yellow book data to IT VAS team
- IT VAS team to develop Push-Pull Database module
- SME call center staff recruitment & training
- SME call center staffs to log in module & enter search button for Push-Pull data
- SMS confirmation module development
Product – Features:
5 FnF (three AKTEL numbers & one other operator number)
Upto 10 mobile number GROUP TALK facility for more talks with Business people.
GROUP TALK Facility
15 sec pulse
There will be two time band, namely Business hour (8AM to 9PM) & Private hour (9PM to 8AM). Private hour tariff will be higher than Business hour tariff.
Standard (IDD): Tk. 500
M2M connection: Tk. 300
Monthly committed amount
Monthly Line Rent
Standard (IDD): Tk. 2000
M2M connection: Tk. 1000
Standard (NWD & IDD) : Tk. 2500
M2M connection : Tk. 1500
1st seven min. Free & then TK. 1.00
1st seven min. Free & then TK. 2.00
INCOMING Tk. Per min)
To Other Operators
To AKTEL Group Talk
To Business partner (FnF)
OUTGOING(Tk. Per min)
Private Hour 9PM – 8 AM
Business Hour 8AM – 9PM
Payment Mode of Connection fee:
a) For one connection – Full payment
b) For at least three connections
- Down payment Tk. 1000 for each STD & TK. 500 for each M2M
- 5 installments (to be realized with monthly billing amount
Zone-wise sales projection for SME:
SME Pre rollout steps
- Develop the SME product (already in process)
- Signing agreement with organizations who has worked with the SME’s in Bangladesh in order to do co-branded activities and also acquire there customers. (Organization such as MIDAS,BISIC,BRAC BANK)
- Participate in SME activities in order to give the feel that AKTEL’s only objective is not doing business but also do activities for the development of SME in Bangladesh as SME’s are considered as the future backbone of the economy. (Events such as conferences, seminars etc.)
SME Post rollout activities:
- Communicate to the SME’s through different communicating channels about AKTEL SME product.
- Organize SME fairs or participate in SME fairs.
- Give award to the three best performing SME’s.
- Sponsor a television program that identifies the upcoming SME industries and talks about their need for development. (e.g. Mati O Manush)
The business organizations in Bangladesh are now increasing their focus on SME day by day. Now they have realized their business in SME sector. As the mobile market in the Bangladesh is saturating, the operators need to find new potential market and SME is the best of them to make business. By improving the overall communication of the SME segment the operators can contribute to the countries macro economy.
Introduction of sales tax on Subscriber’s Identification Module (SIM) has put negative impact on the country’s private cell phone business. Bangladesh telecommunications Regulatory Communication (BTRC) has conducted a survey to assess the impact of the introduction of the sales tax on SIM, first proposed at the rate of Tk. 1200 in the budget for fiscal 2005-06, and the later lowered to Tk. 900. The number of new clients of the four private mobile phone operators fell sharply. The growth of new subscribers dropped by 2 to 7 per cent in the year 2005 for the new tax.
This is a sign that the mobile companies are going face a tough time. Moreover, people mainly prefer to use mobile phone because of its initial low price. Now the situation has changed. Now the mobile operators have to come up with better package features and services. Still mobile operators are taking high connection price especially for the Post-paid package. In order to increase the growth rate, they can offer packages in installments. This would help them to get business people and fixed income people as their subscribers. However, the people who wanted to buy a connection; would buy it anyway. Nevertheless, this added VAT would make people think twice before buying a mobile connection or even switching the brands. Therefore, the mobile companies should work on their existing packages and come up with new VAS and packages.