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BUSSINESS POLICY AND STRATEGY

Analysis of warid telecom

Submitted to: Sir Muhammad shafique

FACULTY OF MANAGEMENT SCIENCES


INTERNATIONAL
ISLAMIC UNIVERSITY ISLAMABAD
1.What is, if any, the ‘business strategy’ of Warid Telecom in Pakistan and
how are they actualizing it?
Vision:
“Be a part of largest post paid cellular base in Pakistan”
Warid Mission and Purpose:
“Our aim is to be perceived not only as a telecommunication operator of voice
services, but also as a universal provider of comprehensive communications services
for both residential and business customers.Warid's corporate identity seeks to reflect
the changes in telecom sector in relation to helping customers keep pace with rapidly
changing technology in the field of communication, through maximum network
coverage and clear connectivity that we have committed to provide”
Warid Business Strategy in Pakistan:
Warid Telecom is owned by the Abu Dhabi Group led by His Highness Sheikh Nahayan
Mabarak Al Nahayan Minister Higher Education and Scientific Researcher in UAE.
Warid Telecom started its operation in May 2005 from Pakistan.Warid Telecom
International LLC, purchased a license for operating a nationwide mobile telephony
network, (WLL) and long distance international (LDI) for $291 million US dollars.
Within 80 days of launch Warid attracted more then 1 million users.Currently the
network has around 7.6 million subscribers.In Warid business strategy three things are:
• Competitiveness :differentiated in value added aspects
• Cost Leadership: by providing less price service/product
• Rapid Response of company :when need identify they response to it
• Customer care by providing quality service: The pre-paid segment is
branded and marketed as Zem Pre-Paid. Zahi-Post-paid and Zem Pre-paid
user enjoy various value added services (VAS), such as SMS, MMS, GPRS,
64K SIM and a host of other features. However International Roaming is only
available to its Zahi(post-paid) users.
External Analysis of Warid:
In Pakistan’s telecom sector Liberalizing and deregulation start.Goverment issue license
to Warid. In 2004 mobile licenses to two new companies were awarded through open
bidding against auction bidding price of US$291 million each. Warid is one of them.
Warid try to come with innovative ideas. Like Warid comes in the market with the low
prices. They target the low class people. Warid take initiative of introducing “30 sec
billing” as opposed to per minute billing. It has a pricing strategy that is comparable and
give reasonable return to their shareholders. There major target was the customers that
are new mobile users, the rest have churned from other service providers.Warid telecom
is the First LDI operator who has started the build up of nation wide fiber optic network.
It is likely that this will result in increased capacity in the marketplace and will bring the
tariffs further down. Other factors that Warid was concentrated on are: 1) Advertising
2) Market assessment 3)Price packaging. The Warid came with the challenge in mind of
how to differentiate themselves from others and to expand the horizon of telecom in
Pakistan, by ensuring a high standard of network quality and customer service. Warid
differentiating factor are their customer care and support, which is currently secondary in
the cellular market in Pakistan.Mobilink has strong network throughout Pakistan so warid
has major threat from it before implementation of MNP (mobile number portability).
Warid and Telenor are tough competitors.
Internal Analysis of Warid:
Warid is providing low prices to their customers.Initial strategy they have to get more
customer then generate revenue.Following issues are:
• Warid have to pay for USD (Universal Service Organization) and
USF(Universal Service Fund).
• Strategic Alliance Warid had issue to use existing network.As in Pakistan lot
of unbundling(The network is not one person custody there are primary and
secondary exchanges),So warid start negotions to hire network on the basis of
no profit no loss.They negotiated with Ericsson and hired there network.
finalizing the strategic alliance agreement held in Lahore recently is for
Ericsson to provide Warid Telecom a complete “turnkey state of the art” GSM
network solution, which encompasses the supply of core and Radio network
equipment, network design, rollout as well as professional services like full
operations and maintenance. The network will be GSM / GPRS based and its
coverage build out will commence immediately. Warid is strategic alliance
with Ericsson and Nokia for Pakistan and in Bangladesh with Motorola.
• Service of warid with passage of time is not providing good quality.Network
capacity is not improving
• Management Style and approach is emphsising on outcome based(revenue
and profit) not on quality.
Warid Setting Enterprise Direction(Porters (1980) Generic Strategies):
Cost leadership of Warid is applied by offering lowest cost packages to its customers at
minimum possible level,They have attracted 7.5 million customers besause of this
strategy.Now they are trying to get more profit after investing a lot they cant low prices further.
Diffrentiation by Warid implimented by showing cultural integration as it is owned by UAE
group so people are more valuing it as Muslims.Warid is offering special discounts offers on
calls of Arab states.This aspect diffrentiate Warid from other companies.It has provided billing
updation system which is not given by any other company.
Market Segmentation(Focused) by Warid by catering needs of people.Thay created image
by tag line “we care” for everybody they will provide best quality service.They given post paid
packages for middle class Zem and for elite bussiness class they introduce Zehi.Thats showing
division of market by Warid into distinct parts.
Porters five forces Warid Telecom model :Daiagram showing How Warid doing bussiness in
telecom industry.
2. The major dynamics of strategy in the industry they are competing
in Pakistan?
Before the liberalization of telecommunication sector, the telecommunication service was
available at higher costs and the quality was poor. This was mainly due to lack of
competition as no additional choices were available to customers. When mobile cellular
services were launched in the country the people responded chaotically. These services
commenced in the 1990s when Government of Pakistan awarded two cellular Mobile
Telephone Licenses to Paktel and Instaphone for provision of cellular mobile telephone
in Pakistan. In 2004 mobile licenses to two new companies Warid and Telenor were
awarded through open bidding against auction bidding. . In past telecommunication was
luxurious and Mobillink had monopoly catering elite class, Ufone present in market as its
competitor. So it was very difficult to position in the market. But the tremendous growth
potential and market dynamics of Pakistan Telecom sector and extensive development
and privatization taking place with a lot of unmet demand in the telecom sector has given
a chance to Warid to come in the profitable industry. To achieve optimal cost structure
and focus on Core business Warid’s strategy is to outsource typical network activities
like Network Design, Site Acquisition, Civil Work, Installation, Integration,
Commissioning, Operation and Optimization of the Network. In telecom Industry these
four major dynamics are emphasized:
1. Quality: In telecommunication services customer analyze quality. The company
working on guide lines of total quality management. Warid providing quality to their
customers so they capture 16% of market share from 2005 to 2006.
2. Coverage: Telecommunication Company providing coverage according to needs of
customers. Warid giving coverage to some areas in Pakistan because of bad network
system. Mobilink is strong company as its network system throughout Pakistan is best.
3. Services: Warid as compared to its competitors providing services but certain
issues of improvement and up gradation needed in this regard.
4. Price: Customer either he belong to any class even elite class see what is price
offering by specific telecommunication. Warid came in the market with the low price
strategy. This helps them to gain the market share by attracting new customer and users
of other companies. Mobilink is the market leader but because of high price, Warid
attracts more customers. Other Market Dynamics are:
Cultural aspect: The Mobilink was mainly targeting elite class.Ufone is offering
medium price ranges. When Telenor came in the market it faces the difficulty of
positioning itself. Because of the contempt of prophet hood in Norway and Telenor is
Norwegian company. So culture plays the important role for the Warid as it is Dubai
Company.
Globalization: According to the research around 15% of Warid's mobile traffic is
international. The international gateway - provided by a submarine cable and dual
satellite connectivity from earth stations.Globaly Warid is not much successful.
Innovation Continues to be the Key to Success: Warid major dynamics while
competing are its low prices, customer target, product innovation and new technology
introduction.According to telecom analysts entrance of Telenor and Warid intensified
competition in Pakistan mobile market significantly. Both Mobilink and Ufone were
slow to respond with the result that Warid and Telenor made substantial gains
in market share. This shows the growth potential of Pakistan’s mobile market. For Warid
market positioning is extremely dynamic. The quality of service, marketing strategies,
pricing, and promotions all interplay and have their individual impact.
Warid plans to follow the internationally recognized quality of service benchmarks in
maintenance of its GSM network. The most important thing for the telecommunication
services is to gain market share. This can only be done through unique and innovative
product offering. The major dynamic in the Warid strategy is to provide product
innovation. In terms of services Warid is maintaining edge in bringing the most advanced
and innovative features to customers and in being the trend setters. Warid bundled
package, which includes a Nokia handset, is popular because people don't have to pay for
a new phone at once. Warid is also offering international mobile calls rates that are 40%
to 50% below the Pakistani standard, through their own international gateway and
infrastructure.
Updation of phone billing:Warid is the first company that comes with innovative
idea in phone billling. Warid provide balance update after every call and text message.
The user don’t have to dial any number to know his balance.
Attract rich human resource capital: In the field of telecommunications, Warid is a
new entrant. However we have been able to attract rich human resource capital from
Pakistan and abroad covering a broad spectrum of telecoms both from the vendors and
operators sides.
Strategic partnership: Warid has chosen Ericson as business partner, which is
providing them with complete GSM network. Warid is also coming with 3G technology
with help of Ericson. On the other hand Warid also had done strategic partnership with
Nokia mobile company in 2005. Nokia will provide the Warid with mobile phones,
which will be provided to customer in bundled package, which includes a Nokia handset.

How are they competitively positioned in their domain of business in


Pakistan in the long run?
Pakistan’s mobile cellular industry has witnessed phases of dramatic changes over the
years. Mobilink in Pakistan’s telecom sector that introduced GSM technology gave
mobile users a choice to switch over from AMPS to GSM. Major changes in the
mobile industry however, took place with the introduction of fourth mobile operator
Ufone by the incumbent PTCL in 2001 and introduction of CPP regime. A healthy
competition resulting in the decline of mobile service prices, increased coverage and
better quality of service.
With pricing coming down, affordability would go up. Also from a luxury item
mobile have become a “need” and a “business tool”. Apart from tariff good coverage
and highest standards of quality will be the decisive factor to attract subscribers.
• Warid gained pool of customers from market by saying “we care” but when they
analyse that they have attracted many customers then they are saying “be heard”.
• This showing that they are not customer focused and they are working for profit it
seems they are thinking “who cares –after getting lot of customers from market”
• Today warid can not low prices more because thay have to take revenue and invest
in other new things ,so Warid came on operation point.
• As Telecom market is on its boom in Pakistan in this scenario Warid is on operation
point it seems that it is about to sell, as they are not working for improvement.
Mobile Companies in Pakistan :
At the top is Mobilink, the Pakistani unit of Egypt-based telecom company Orascom.
Subscriber share was around 46% at the end of 2006.Ufone, a wholly owned subsidiary of
Pakistan Telecommunication Co. Ltd (PTCL), is now under the control of Etisalat group of
UAE. It has 21% of subscriber share. Norway’s Telenor, a recent entrant with about a billion
US dollar investment in Pakistan has been doing well, based on its recent earning report. It has
about 14% of the market share. Telenor stock is listed in the Oslo stock market (TEL) and
Nasdaq NY (TELN).Paktel, the company which has been in the news as it got acquired by
China Mobile has 3% of market share and plenty of eyes are on it.Presently, Mobilink is the
market leader with 61.04 percent market share before Warid, followed by 20.78 percent share
of Ufone. Instaphone and Paktel have 5% and 7.0% market shares, respectively. Telenor, the
was new entrant in the market has a share of 6.20 percent with subscriber base of 653,170 in
just 2 months. Another new entrant (Warid) has opened its account on May 23, 2005 and
capture market soon. Having invested in the 15-year license, Warid wanted to quickly establish
itself as provider of the best quality network in Pakistan and aimed to offer best-in class
services and coverage to subscribers at competitive prices. Also acquire new licenses for GSM,
LDI (Long Distance International) .It will also provide best Quality service in long run using
latest technology.
Key Success Factors for Warid (so far) is:
• Build the brand
• grow the subscriber base
• Speed to market to gain competitive edge
• Ensure quality of the network performance and operations
• Operate in most cost effective and efficient manner.
To achieve this Warid relies on long-term partnership and trust with its vendor
Ericsson to provide these services Warid has given Ericsson the task to Operate and
Manage Warid’s network in Pakistan covering the following scope: NOC Operations,
Alarm Surveillance and Fault Rectification, Field Operations, Site Maintenance, Network
Optimization and Tuning.
. Warid Telecom at Launch . Warid Telecom in (Dec’06):
(May’05) Number of Cities: 140
Number of Cities: 28 . Number of Cell Sites: 1,250
. Number of Cell Sites: 460 . RAN capacity: 6.5 million
. RAN capacity: 1.5 million . Core Capacity: 7.5 million
. Core Capacity: 1.5 million . Number of MSCs: 18
. Number of MSCs: 04 . Network is running at full capacity of 6.5 Million
subscribers
Warid Telecom in present Warid Telecom in future (2010):
(Mar’07): Warid Telecom International will service 50
. Number of Cities: 175 Million Subscribers by 2010
. Number of Cell Sites: 2,255
. RAN capacity: 10 million
. Core Capacity: 15 million
. Number of MSCs: 28

Conclusion:
So far looking at the Warid strategies, we have come to conclusion that
To survive in the long run Warid is doing strategic partnership with Nokia and
Ericson. It’s like that they can’t manage their network by their own. Its seems they
can’t do research of market so they are taking help from international companies that
are already functioning in the Pakistan.
Warid is increasing its customer base, but not considering quality of their network. So
it will create problems for them in the future.Customer complaints are not fulfilled by
the Warid. There is no rapid response to the need of the customers.Warid is not very
successful globally. It is functioning in Bangladesh and Uganda, these are developing
countries. And Warid is not very successful in both of the country.Warid is now
unable to continue its cost leadership strategy. Its can’t low its prices any more.
At the operational point Warid is not good. It seems it is going to be sold.
So in the long run it is difficult for the Warid to survive. Changing of its corporate
slogan gave the idea that it is not any more customer oriented company.
ANNEXURE: