1.

0 CityCell back ground

In October 1990, Hutchison Bangladesh Telecom Limited (HBTL) was formed as a joint venture between Bangladesh Telecom Limited (BTL) and Hutchison Whampoa Limited of Hong Kong. In March of that year BTL had been issued a license by Bangladesh Telegraph and Telephone Board (BTTB) for operating cellular, paging and other wireless communication networks. However, soon there was legal dispute between BTTB and BTL regarding the refusal of BTTB to provide Public Switch Telecommunication Network (PSTN) channels for connectivity to the BTTB network. The Supreme Court then ruled in April 1993 that BTTB would have to provide PSTN connections to HBTL, and that BTL would have to transfer the cellular portion to the license of HBTL. BTTB gave HBTL the PSTN connections in August 1993 and HBTL began commercial operation of the first cellular telephone service in Bangladesh in the same month. The owners of HBTL decided to sell their stakes in the company due to the legal war. HBTLs shares were divided into two parts: Type A, which was held by BTL and Type B, held by Hutchison. Each type of share represented 50% title of HBTL. Pacific Motors Limited bought the type A shares while Hong Kong based financial investors Far East Telecom Limited bought the Type B shares. CityCell is the brand name of the product of Pacific Bangladesh Telecom Ltd (PBTL). This is a concern of Pacific Group, which is involved in the business of banking, automobiles, pharmaceuticals, fisheries, healthcare, and tea. On June 2, 2005, PBTL created a milestone through strategic partnership with SingTel, Asias leading communications solution provider. This has opened up a whole lot of opportunities for CityCell to make its position stronger in the market. With the financial and technical expertise from SingTel, PBTL is in a position to bring a host of innovative products and services for the customers at affordable prices. PBTL start its journey in 1993 as the forerunner in the mobile telecom industry, introducing postpaid packages for the high-end-users. It obtained its business license from BTTB on July 26, 1989 under the Bangladesh Telegraph Act, 1885. The license grants PBTL all powers, authorizations, consents, and permission to provide, operate and maintain cellular radio-telephones (fixed and mobile) throughout Bangladesh. Thus it is the only telecom operator in Bangladesh, which has the license for both fixed and mobile phone. CityCell began its operations with AMPS (Advanced Mobile Phone Service), a sophisticated technology at the initial stage, which was upgraded into CDMA1 (Code Division Multiple Access) in 1999. In 2005, CityCell further upgraded CDMA-1 into CDMA1X, a 3G technology capable of filtering out background noise, cross talk, and interference, CityCell customers can enjoy crystal-clear voice quality, greater privacy, and enhanced call quality.

2.0 History
Date 1989 Event Bangladesh Telecom Limited (BTL) was awarded a license to operate cellular, paging, and other wireless communication networks.

Hutchison Bangladesh Telecom Limited (HBTL) was incorporated in Apr-90 Bangladesh as a joint venture between BTL and Hutchison Telecommunications (Bangladesh) Limited. Aug-93 1st cellular operation in the South Asian sub-continent Aug-93 HBTL began commercial operation in Dhaka using the AMPS mobile technology. HBTL was renamed as Pacific Bangladesh Telecom Limited (PBTL) and launched the brand name CityCell Digital to market its cellular products.

Dec-93 Pacific Motors Limited acquired the entire 50% share holding of HBTL. Feb-96

Mar-97 1st to extend coverage to Chittagong. Apr-97 CityCell began commercial operation in Chittagong. Mar-99 1st to adopt CDMA technology. CDMA technology was first introduced by CityCell.

Jan-01 1st to set-up a communications backbone to Chittagong. Apr-01 Dhaka-Chittagong microwave is launched. Nov-01 CityCell introduced the 15-second pulse rate in the cellular industry of Bangladesh. Value Added Services (VAS), such as 24 hour billing information, news, services, sports, etc., are introduced. First operator in Bangladesh to offer prepaid services with two-way PSTN (BTTB) connectivity. CityCell extends coverage to Rangpur, Dinajpur, & Syedpur, the northern districts of Bangladesh. CityCell launched its services in the major northern business city of Bogra.

Jan-02 CityCell commences operations in the Sylhet zone. Jan-02

Mar-02 First operator in Bangladesh to offer off-peak rates. July-02 Sep-02

Oct-02 Short Message Service (SMS) is introduced. Jan-03 Feb-03 First operator in Bangladesh to introduce the One2One post-paid package.

Jun-03

CityCell reaches a coverage level of 40 districts out of a total of 64 (61 districts eligible). CityCell introduces Amar Phone, a postpaid mobile-to-mobile package offering the lowest outgoing rate per minute in Bangladesh. First operator in Bangladesh to introduce IDD and NWD for prepaid subscribers. CityCell reaches a coverage level of 51 districts out of a total of 64 (61 districts eligible). CityCells 24-hour customer call center opens. Network capacity is increased to 280,000.

Jun-03 Network capacity is increased to 240,000. Aug-03 Sep-03 Oct-03 Nov-03

Mar-04 CityCell opens its customer service centres 7 days a week countrywide. June-04 CityCell launches RIM based handsets. CityCell introduces, Alaap Call me, a pre-paid BTTB both-way Mar-05 connectivity package with the unique Call2Cash feature to earn (talk-time) credits upon receiving CityCell calls. June-05 Singtel acquires 45% equity stake of CityCell. Has a call option to acquire another 15% by 2007.

3.0 CityCell mission statement

Mission PBTLs mission statement is To deliver innovative, customer focused products and to be the benchmark for customer service excellence. Vision The Vision of the company is To be the best-quality Service Provider in the country. There is an emphasis on strong customer relations. This is important to CityCell especially as, until recently, they positioned their packages as high end packages (corporate and business users). Such customers will require strong support for brand loyalty to develop.

3.1 Strategic Goals

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Without a set of specific mission objectives, no organization can meet their expected achievement. Following represents the overall mission statement of CityCell : Meet customer requirements Establish technological leadership through choice of appropriate technology Establish service leadership through quality Expand the footprint of cellular coverage Expand customer base

The current strategic goal of the company is to occupy a unique position in Bangladesh in the telecom sector. One way to achieve this is to develop a strong subscriber base to be able to penetrate in the markets with other attractive products. The ways to ensure a strong subscriber base is to: Ensure quality service Providing customers with the best products available Build strong reputation with Bangladesh customers throughTelecom customer service Pacific To increase market share by expanding the network Limited (PBTL)

4.0 OWNERSHIP STRUCTURE

CityCell (Pacific Bangladesh Telecom Limited) is a privately owned partnership company. The spectrum of its current ownership is as under: SingTel Asia Pacific Investments Pvt Ltd - 45% Pacific Motors Limited - 31.43% Far East Telecom Limited - 23.57%

Pacific Motors Ltd. (PML) (31.43%)

Far East Telecom. Ltd. (FETL) (23.57%)

SINGTEL (45%)

4.1 Management structure

PBTL has a total of about 500 employees:

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A d v i s o r

E n g i n e e r i S n ag l e s & M a r k e t i n g

F i n a n c eC u& s t o m C o m m e r O c ip a e l r a

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E x e c u t i v e

E x e c u O t i vf f e i c e r

E x e c u t i v E e x e c u t i Sv re E x e c u t i v e ( S t o r e )

E x e c u t i v e

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f f i c e r

f f i c e r

f f i c e r

E x e c u t i v e

E x e c u t i v e

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o f f i c e r

Fig 2: Organogram of Pacific Bangladesh Telecom Limited Senior Management Team CityCell is led by a team of highly qualified executives with extensive experience in the mobile telecommunications industry both in Bangladesh and abroad. M. Morshed Khan, Chairman (currently on leave) At present, Mr. Khan is a Member of Parliament and is the current Minster for Foreign Affairs for the Peoples Republic of Bangladesh. Currently, he is on a leave of absence from CityCell to attend to his duties for the Government of Bangladesh. He is currently not involved in the operations of the Company. Asghar Karim, Acting Chairman Mr. Karim, the former Vice Chairman of CityCell, is presently performing the duties of 6

Chairman in Mr. M. Morshed Khans absence. Mr. Karim graduated from Calcutta University, is on the BoD of AB Bank, and is also the Director of other companies within the Pacific Group. Faisal M. Khan, Managing Director Chairman of AB Bank Limited, Managing Director of PML, and Director of other companies within the Pacific Group. Chris Maloy, CEO Mr. Maloy, an Australian citizen, joined CityCell in November 2003 as the Companys Chief Executive Officer. Intekhab Mahmud, Head of Marketing Mr. Mahmud joined CityCell in early 2004 to head up Marketing operations. Prior to joining CityCell he headed Grameen Phones Marketing Department for seven years. Mr. Siddique Ali Miah, Director of Engineering Mr. Miah holds an Engineering degree from BUET and a Telecommunications degree from General Telecom and Electronics, Southeast, USA. Mr. Miah has 42 years of experience in the telecom sector, including two years with the ITU. Mr. Miah is also responsible for successfully implementing CityCells CDMA system. Mr. D. S. Faisal Hyder, Chief Financial Officer Mr. Hyder holds an MBA degree from the Institute of Business Administration, University of Dhaka. He joined CityCell in 2001 as Head of Finance bringing with him 10 years of business experience.. Mr. Mohammad Tipu Sultan, Chief of Corporate Affairs and Company Secretary Mr. Koichiro Takeda, Chief Technical Officer Mr. Takeda joined CityCell as the Chief Technical Officer in September 2002. Sales & Marketing As the name implies, this divisions job is to conduct marketing promotion of CityCell. The job of its employees is to maintain relationship distribution channel, media, and corporate clients. This division also deals with value added services, brand and product design. In the Sales Division there are Channel Sales, Corporate Sales and Direct Sales. In the Marketing Division, there are Market Communications, Brand, VAS, Product Development and FWT & Backbone Departments. The Senior Vice President is the Chief Marketing Officer of this Sales & Marketing Division. Details about the departments have been discussed in the following chapter.

Customer Service Operation, Billing and IT This department deals with customer after the sale occurs. Main activities of this department includes maintaining data base of the customers, preparing, distributing, and collecting the bills,

activating new connections, deactivating connections, helpline service, interchanging of the CDMA sets, collecting the faulty and repairable sets, returning repaired sets, changing CDMA sets and so on. This department is divided into three divisions: a) Billing and IT b) Service Delivery Billing and IT

Risk Management Fig 3: Billing and IT

Revenue Generation

Service Delivery Front Office Account Verification Collections Workshop

Fig 4: Service Delivery Finance and Commercial This department is divided into two divisions, a) LC preparation and Purchase, and b) Fund Management. Here LC is opened for purchasing of sets and equipment, and all the funds collected are used and controlled for the maximum benefit of the company. This department is also responsible for the budgeting which takes place once a year for the next three years. Finance and Commercial

Commercial LC & Purchasing Fig 5: Finance and Commercial

Fund Management

Engineering

This department is responsible for the setting up and maintenance of the heavy equipment and the major telecom channels required for providing services to customers. This department is divided into 7 divisions. They are Switch, Central Base station, Microwave, Radio Frequency, Base Transceiver Station, Power, Planning and development.

Engineering
Switch Microwave

Central Base Station Control

Radio Frequency

Base Transceiver Station

Power

Planning & Development

Fig 6: Engineering Accounts This department is responsible for collecting direct cash or check or charging credit cards from the customers who are paying for the service and equipment. This department is also responsible to maintain the balance of store where sets and equipments are gathered for future purpose and present operation.

Accounts

All type of payments collection Fig 7: Accounts

Store (Sets and equipments)

Administration and Human Resource

As the name implies, this department has three major divisions. The Administration division is responsible for Contract, Legal and Protocol & Government affairs. The Purchase & General Maintenances is responsible for Purchase & Support and Estate & Properties, Maintenance & general security. The Human Resource department is responsible for procuring future employees according. This department is also responsible for maintaining the database of all employees, leaves, attendance, health care and related fields of employees.

Administration and Human Resource

Contract, Legal and Protocol

Procurement

Purchase & General Admin

Fig 8: Administration and Human Resource

5.0 Financial management

Income statement Total Operating Revenue Total Operating expenses Interest income Financial cost Balance sheet Total assets Long term borrowings Total liabilities Total equity 2004 3,700,695 (2,976,718) 330,660 (135,776) 2004 4,006,573 1,668,448 2,558,352 2,448,221 2003 2,577,199 (1,843,374) 350,964 (246,358) 2003 3,263,866 1,735,550 1,255,473 2,008,393 2002 1,778,750 (1,059,845) 212,503 (311,304) 2002 2,253,298 1,791,022 1,738,924 1,514,375

Revenue in 2004 grew by 57percent, compared to last year and as a result EBITDA and net profits were recorded at a high level. 5.1 Enhanced Value of Shareholders Investment: CityCell continued to enhance the value of its shareholders investment. The slow significant growth in subscriber base has made a little bit positive contribution to the revenue, EBITDA and net results, in line with the expectation of the shareholders. Revenue in 2004 grew by 38 percent, compared to last year and as a result EBITDA and net profit were recorded at a higher level .Percentage of EBITDA, Net profit and ARPU, how ever, declined slightly compared to last year due to higher in take of prepaid customers and change in tariff plans. Major part of the profit was reinvesting in the expansion of network in order to meet the pressing demand for Citycell coverage in new areas. Citycell is well position in the market with its firm focus on the strategic goals and we look forward to increasing value for shareholders in the years ahead. 5.2 Citycell Contributed BDT 11.50million to the National Exchequer

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Citycell has become one of the largest contributors to the Government Exchequer. Since its inception, in the last eight years of operation, the company has contributed around BDT 30.46 million on account of various taxes, levies, license fees and interconnection charges. During the year 2004.

6.0 Overall policies and strategies adopted by City Cell

Customer Focus At the generic business level strategies, the organization focuses on distinction through superior customer service. Thus the company believes that central to its success is the focus it places on its customers. The organization strives to serve the customers by understanding and anticipating their needs, making it easy enough for them to do business with the company. The company is committed to provide high quality and value to the customers to enrich their lives and enhance their business success. QFD or Quality Function Deployment We earlier defined quality as the totality of features and characteristics of a product or service that, bears on its ability to satisfy stated or implied needs. Consequently, an effective TQM program translates the customers stated or implied needs into specific features and services. CityCells QFD refers to both 1) Determining what will satisfy the customer and 2) Translating those customer desires into the target design. CityCell obtains these two by following the next steps : Identify customer wants by identifying what type of features and performance the CityCell users want. Identify what should be the price which CityCell users would like to pay for the desired service Identify what flexibility and reliability customer wants to be provided Relate customer wants with products hows: Relating customer wants of performance and features with how CityCell is going to provide it Relating flexibility and reliability of CityCells services which is wanted by the users with how CityCell will provide them Identify relationships between firms hows CityCell interrelates the different services and products and identifies how to combine force with one product to another CityCell develop importance ratings to determine the most important product & service, which will satisfy the existing users and potential users. CityCell often evaluates their product with GP, AKTel etc. By this they improves their response to the market Evaluate competing products

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Organizational practices Leadership Mission statement Effective operating procedure Staffs support Quality principles Customer focus Continuous improvement Employee empowerment Benchmarking Just-in-time Tools of TQM Employee empowerment Empowerment Organizational commitment

( Meeting customer needs

Repeat customers The flow of activities necessary to achieve TQM Challenger Spirit The challenger spirit drives the companys business and operations. Whenever the management of the company faces any kind of challenge, they never say cannot rather they question themselves Why not. This is the main theme of challenger spirit practiced by the management of PBTL. Team Work PBTL recognizes that it is organized with individual business units with distinct objectives, people and cultures. However, the company believes in and works towards unity in diversity where all is for one, and one is for all. Personal Excellence The organization believes that leadership and superior performance are only achieved through the pursuit of personal excellence. The management takes the utmost pride in what they do: working to the highest standards, reflecting on their performance and growing their capabilities to continuously improve the business. The company acknowledges the potential of the individuals and creates opportunities for their growth, recognizing individual contributions and celebrating success stories. Integrity The reputation of PBTL depends upon its ability to fulfill its promises to shareholders, customers and employees. The organization and its management do so by being honest in its dealings, doing what they say, taking responsibility and being accountable for their actions. The management is dedicated to identify issues early to avoid surprises. They always put their best

Customer satisfaction

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O S e

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effort to run the organization proactively. Again, regardless of circumstances, the management ensures the highest ethical standards, which guides them in making the right decisions.

7.0 Human resource management

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& L

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Human resource or employees of an organization are very important and vital to the organizations success. Equally E important x e c uis the t i v HR e strategy. - H u The m objective a n R of eCityCells A s s o s u i sHR r tc a e n s strategy includes those employees: ( P l a n n i n g , S t r a t ( e L g o y g ai s n t i d c s C , o C m o np te Are efficiently utilized within the constraints of environment. E quality x e c ofu work-life. t i v e - H u m a n R e s o u r c e s Are provided a reasonable S e le p n m i o e r n E t ) x e ( L e a r n i n g a n d D e v Fulfills the objectives of the firm with full motivation. Although this department has not yet come into real existence as yet but we can take it as an E x e c u t i v e , H u m a n R e s o u r c e s opportunity to discuss the human resource policies like hiring procedures, training, promotions ( R e c r u i t m e n t a n d O R p ee cr a e t p i o t i n o s n ) and benefits as they have been carried out and given out until now. As already mentioned the human resource activities were T e that e l l matter, eO p p h it o r an te i o E carried x e out c u byt the i v Admin e - P Department e r s o and n nfor e still is for the time being. Human Resources Department functions in the following distinct sections: S e n i o r E x e

t r na c i s On

i c e sc at s t t i v t s sp e e

( s r

S e n &i o r O f f i c e r , P e r s o n n e l O p Planning, Strategy E x e c u t i v Compensation Recurring & HR Operations Learning & Development and Internal Communication O f f i c e r ( s Office Services Protocol & Legal Affairs

e e

c u t i v e r a t i o n

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a t a

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) ( s h

G e n e r a l Hiring Procedures In order to become an executive of CityCell a candidate should at least be a graduate from any recognized university in Bangladesh or abroad. The candidate must Gfirste pass n e a r written a l S examination. Then according to the importance of the post he may have to face more than one interview before getting the final appointment. The interview board usually consists A of s VPs s i sand t a M basis a i nof t AVPs. Sometimes the advisors also join in. Executives are also sometimes hired on the extraordinary performance during the internship period. Officers are hired on the basis of their experience and skills related to the specific field. Tertiary level education is however a must. O experience f f i c e in r the ( s The advisors or the directors as they are called are hired on the basis of vast related areas. These people have already served in high positions either in government or private sector with success. They are hired on a contractual basis

f f t n a a r e V

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M C A d h v

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13

i r eS

c V t Po A r - - V S E P C a n - l F ge I S Os i T n V ae H P ne e -rd a i n H S dM g R-V a C P r

Training Training is actually provided by the experienced people at work who can be executives or senior executives. The training is mostly provided through work. But some idea is given on the

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software of CityCell before they can be actually used by new recruits. During the training the employees are given a very small briefing on rules, policies and the code of conduct of CityCell. Promotion Promotion comes on the basis of excellent performance. But promotions are very hard to come by. People have been serving on the post of executives for six years but yet have not received the promotion even though performances were better than ordinary. Benefits When an executive joins in he usually have a basic salary of Tk. 12,000 and a mobile phone with maximum usage limit of Tk. 2000. But they are charged a much cheaper rate than the usual charge rates. For appointments at higher posts than executives the salary is negotiated. An increment varying from Tk.500-12000 thousand is given to people working at CityCell based on the post and performance. Two festival bonuses are given to the employees every year. An employee is allowed a total of 41 days leave with pay. An employee gets a 21-day vacation leave with payment. He can take 10-days sick leave and 9 days casual leave in a year. Executives and officers are not given incentive based payment. They do not pay any extra benefits to its employees who may be seriously ill. Each employee of CityCell is entitled to a two days holiday in a week. But it does not have to be on Fridays and Saturdays especially for the CSO people. CityCell has an attractive and competitive compensation package that is aimed to attract and retain talent and motivate our employees to do their best to contribute to the companys success. CityCell offer a range of financial and non-financial rewards and benefits. Salary & Pay Day Monthly salary and allowances shall accrue from the commencement of the active service of an employee and shall generally become payable on a working day during the last week of the current month. Usually the emoluments would be sent to the bank account of the incumbent. Festival Bonus All the permanent employees are eligible for two (2) festival bonuses each year. This is equivalent to one months basic salary for employee serving one year or more with the company. If length of service is less than one year, then a pro-rated bonus is paid based on the number of days served during the period. Performance Bonus CityCell has introduced a performance-based bonus for employees at the level of Manager and above. This bonus is linked to a measure of individual, group and organizational performance. Leave Entitlement

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All the regular employees of Pacific Bangladesh Telecom Limited are eligible for annual leave of 25 days and sick leave of 9 days in a year. If length of service is less than one year then the leave will be calculated on a pro-rata basis based on the number of days served. Leave Fare Assistance (LFA) Any confirmed employee of CityCell, who requests for an annual leave of minimum nine (9) consecutive days, is entitled to obtain the Leave Fare Assistance. Upon granting the requests for LFA, employees are entitled to get a one-months basic salary. Provident Fund All the permanent employees of CityCell are entitled to become a member of Provident Fund. Every month 10% of the basic salary of an employee is contributed to the fund along with the same amount from the companys account. Net income of the fund each year as on the 31st of December is ascertained and interest is credited to the members account at rate determined by the trustees. Any member, who has not completed three (3) years of continuous service, will not be entitled to get any portion of companys contribution. Gratuity Gratuity is provided to all permanent employees on basic pay. It will be admissible to an employee, who has rendered continuous services to the company for a period of seven (7) years and more. Completed year of service for the purpose of these rules means twelve (12) months of active service. Group Life Insurance The company provides coverage of life insurance to all its permanent employees after their confirmation with the company. Medical Assistance scheme To ensure proper and timely treatment/medical care of employees, company provides medical and hospitalization benefits to all employees through a well reputed insurance company. Under this scheme, the company bears and reimburses necessary & reasonable medical expenses incurred by an employee while in hospital confinement for treatment. Transportation CityCell has introduced a unique car scheme for the employees at the level of Manager and above. Under this scheme company assists the Managers in purchasing a car through purchase contribution and other running & maintenance allowance which covers fuel, drivers salary, insurance & other maintenance costs. Moreover, employees at the level of Officers and Executives are provided with pick and drop facilities upon availability and on priority basis. Cellular Phone Facilities All the executive staff of CityCell is provided with a cellular phone, where the company bears the charges up to an allocated limit based on the position held by the employee. Beyond this limit the employees must bear the charges, which are of considerably low rates, proposed and applicable for CityCell employees. Recreation Center

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A full-fledged Recreation Center has been introduced for all the employees to congregate and relax during their lunch breaks or after work hours. Currently the following amenities are available for regular use: Cafeteria Gymnasium Learning Center Snooker table Table tennis Man Power Status

Division wise Staffing of PBTL Existing End of 2005 Customer Care 174 200 Sales & Marketing 79 166 Engineering 135 255 Finance 58 72 8 12 Corporate Affairs HR & Admin. 18 18 16 16 IT

7.1 HR Policies & Procedures

A good number of HR policies and procedures introduced. Draft HR policies and procedures manual developed. To be made accessible via Intranet. Performance Appraisal & Bonus System Rollout of an MBO based appraisal system completed. Performance Bonus awarded in April, 2005. Job Evaluation 64 benchmark jobs to be evaluated using Hay method. Evaluation of most jobs below the manager level completed. Manager level JE to be completed soon.

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HR Automation HRIS installed. Data population is in progress. HR & IT jointly working on online leave administration system. Learning & Development Training & Development Policy developed TNA for Sales & Marketing division completed. 4,026 man hrs. of training were provided so far Soft skills & leadership program to be launched this month Equipped with a good number of books for use by the employees. Currently at beta testing stage Will be launched soon HSE department created and staff engaged Enhanced focus on employee health, safety & hygiene

Employee Learning Center Corporate Intranet

HSE Initiative in line with the IFC guidelines

8.0 SWOT ANALYSIS

8.1 STRENGTHS: CITYCELL is the first cellular operations in the South Asian sub-continent. It is first and only using AMPS (Advanced Mobile Phone System). CITYCELL first and only user of the CDMA technology which allows them to transfer twice as much data as oppose to the GSM (Global System for Mobile) technology. The relationship among their staff is very good and friendly relationship among themselves, which creates a very good working situation. 8.2 WEAKNESSES: The unreliable economic condition of our country means that main investors often refrain from investment.

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Because of the financial lucking CITYCELL is forced to withdraw technological resource from one place to another. And when there is financial support it took a lot of time to implement the new technology. The technology is changing at a rapid pore and it is very hard to keep pace with technology The mobile market now has reached cut that competition level. The price was in getting increasing intense which is cutting down their profitability. There are some departments like the HRD and Billing And IT, which lacks staff. In the Billing and IT department people of Risk Management have to do the job of Revenue Generation and vice versa. Comparatively lower network coverage than Grameen Phone. Inability to get the best out of the current CDMA technology. There are some problems regarding call drops and delays in receiving SMS. A varied and sometimes confusing tariff structure. CityCell does not have a uniform charge rate structure for prepaid mobiles and for the postpaid mobiles. Set options are much lesser for CDMA users and at the same time more expensive too as CDMA sets costs higher than GSM sets for the same model types. For set replacement a customer has to go to PBTL and at same time have to wait for at least a day. But with GSM sets the replacement is as easy as going to the market and buying a new one, which is basically cheaper than CDMA sets. There are still some customers using the AMPS technology and would not switch to CDMA. For them CityCell is forced to maintain a separate database which makes the job, a bit more difficult than it should be.

8.3 OPPORTUNITIES: The ability to expand into new services that require an approach that is compatible with PBTLs strengths. For example provision of wireless data transfer services by corporate clients (corporate clients generally require less technical or otherwise support). The data transfer business has good future in Bangladesh.

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Legalization of the Voice Over Internet Protocol (VOIP) business is a good opportunity for FWT to sell more. People would tend to use the FWTs as they are very cheap (only Tk.2 per minute) to use, have access to and from any phones including mobile-mobile phones and thus connecting abroad would be possible through this FWT with mobiles that do not have BTTB connectivity. Expansion into landline services from dedicated stations across country that will provide compatibility with other Bangladeshi telecom networks The biggest opportunity for CityCell is that the market is far from being saturated. If the prices are reduced and they can establish strong network coverage they can get a customer segment of low income people.

8.4 THREATS: The outthought competition in the market means that CITYCELL is going to lose their profitability. They are facing new kind of competitors like fixed phone operators who are also using CDMA and GSM technologies to provide land phone services. They are considered as a major threat to the mobile telecom industry. Illegal import of GSM mobile sets means that CDMA sets, which are provided by CITYCELL, are more expensive then the market price of phones. High degree of acceptance of GSM technology over CDMA in local market. GSM sets are cheap and replacement costs are much lesser. People might switch rather than replace CityCell sets. High degree of bargaining power of suppliers as no one else uses CDMA technology in Bangladesh to provide cellular telecom service. High network coverage of major GSM utilizing company like Grameen Phone as compared to City Cells own partial coverage. GP has more options to peak new customers where CityCell network does not exist. Aktel and Banglalink also have recently developed strong network coverage, and was the first to introduce a prepaid with both ways BTTB. It took away a big market and still can take away more. Grameen Phone,Aktel and Banglalink have already introduced the international roaming options which have not done. It can eat away a big portion of the corporate market segment. 20

The dealers of GSM using technology more often than not sell SIM cards and set separately which is illegal. So it has always been cheaper to get a GSM connection. CityCell dealers cannot do that, as the set itself has to be programmed, which can only be done at CityCell. So if the law is not enforced CityCell sales can suffer a lot.

9.0 Lesion learned from the case

CityCell current strategy remains revenue driven, rather than subscriber driven. They have to now focus on subscriber. However, PBTL's potential network expansion would enlarge its subscriber market share effectively, as supply continues to lag demand in Bangladesh, although the respective line yield is difficult to determine at this juncture. 9.1 Mission statement Lesion learn from mission statement is that mobilization requires a clear statement of objectives and what is needed to be done by whom? By when? And to what end? The previous mission statement puts into perspective a few points about City Cell Digital. Their inherent emphasis is on quality not cheapness of service. The first priority is to provide a highend service that can be used for both commercial and personal use. Their mission is revenue based not customer based. So Citycell has to redefine their mission statement to focus on providing the most access and most valuable use of telecom service. To be recognized as a leading player in the Telecom Services Industry and to provide. Services of excellent standard in order to improve our customers businesses 9.2 Planning The Company appears to be moving towards a more customer oriented approach to its overall customer policy. Gone are the days when PBTL could dictate terms to its clients. These days PBTL has to spend an increasing amount of time covering its shortfalls and persuading customers to stay with them. This is especially worrying after what is perceived to be by many industry insiders a concerted effort by Grameen Phone to make headway into the corporate market a domain that was once almost exclusively under PBTL. What PBTL is really looking for is a way by which it can seriously bounce back into dominant position. The primary reason for choosing CDMA is that they hope to be able to introduce next generation (2G) mobile phone features such as voice conferencing, Internet, sending visual data, etc into their services. It remains to be seen how successful they are in harnessing the full power of CDMA technology. There is also a proposal to decentralize their organization in order to be able to better serve their customers in the far-reaching regions of the country. This means that many major functions will be spread out throughout the country divided according to customer regions. It is yet to be seen how much decentralization may occur, but it is a major issue under consideration. If the network 21

expansion into North Bengal and then into Khulna region occurs soon, there is a real potential, by virtue of superior technology, to gain a significant competitive edge over GSM rivals. Then there is the sale of data link to corporate clients. This will gather significant revenue for the company as well as solidify its position with its corporate clients as their primary information transfer and telecom provider. The incongruities between the various tariff plans of the various packages are to be removed both to make it much easier for customers to budget usage and also to increase the value for money of each package. There are no mergers or acquisitions in the future, but it is believed that Fujitsu may increase its holdings in PBTL and gain greater management control. If this happens, then the entire picture may change. This is especially important if we consider the fact that slowly boundaries are opening and technologies are improving. GSM will give way to more advanced technologies like CDMA and there will soon be no national boundaries as defined in the telecom industry. If that happens and the telecom sector is further liberalized, then PBTL can look forward to increased growth and revenue. 9.3 Marketing and advertising CityCell takes inactive interest in spreading IT education through both urban and rural schools. Over the years, Citycell has donated more than 70computers to a number of academic institutions including the Institute of Business Administration of Dhaka University, the UCEP School, Bishwa Sahitya Kendra and a number of rural schools. During the floods of 2004, Citycell was very actively involved in supporting flood victims by Donating and supplying medicine, drinking water and arranging health camps. CityCell actively participates in the city beautification program initiated by Dhaka City Corporation and also supports improvement of the traffic systems in major cities. CityCell supports a project for autistic children by providing support for their education And improvement of learning ability. CityCell launched the EDGE technology earlier this year, which will enable its subscribers access to high speed data and Internet services. This will help bridge the existing digital divide to some extent by allowing people in the rural areas access to the Internet or information highway. CityCell, Bangladeshs leading mobile communications provider launched its community program CityCell Changing Lives with a donation to the Society for the Welfare of the Intellectually Disabled (SWID). The Social Welfare Organization of Intellectually Disabled was established in 1977 and operates 30 schools for the intellectually disabled

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throughout the country. 'CityCell Changing Lives' community program initiative will initially support 6 schools in Dhaka, Sylhet and Chittagong.

9.4 Manpower placement and utilization Codes of Conduct Singtel guided Codes of Conduct has also been adopted by CityCell and it has been read and signed by all employees of CityCell. This document underlines the importance and requirement of securing good business ethics in all aspects of the companys activities. Management & Leadership Development Employees are one of the most important assets of any organization. Transparency of their goal and performance measurement plays an important role in achieving target of the organization. CityCell has implemented the following tools developed by Singtel to maintain this asset to reach its goal: a) CityCell Leadership Development Process (TLDP): CityCell has initiated an integrated process designed to evaluate, develop and reward managers in accordance with SingTel own leadership demands and business results. This process provides details of overall management capacity, management teams, key position sand extent to which CityCell recruits relevant expertise. Under the process, candidates for key positions are identified, along with training required to develop such positions. Talents are also identified, as are candidates for future management positions. This process also provides details relating to career objectives for managers, and also reflects the diversity. TLDP also sets targets financial and non financial--and follow up in a systematic manner. b) Internal Value Creation (IVC): Each year employees respond to an IVC survey which comprises targets and management, human capital, process capital, innovation and simplification. This process is one of several tools used for companys ambition relating to bringing transparency and accountability relating to individual employees and the company it. By comparing the result of the annual IVC survey with TLDP, a basis is achieved for the implementation of improvement measures with respect to employees in general and managers in particular. CityCell believes in transparency and accountability to society through establishment of efficient and effective corporate governance. It also believes that this is a continuous process and will be always developed to further strengthen CityCell corporate governance functions in the years to come. Economic and social impact The shareholders of CityCell believe that Good development is good business. Since its inception, CityCell has always considered Corporate Social Responsibility (CSR) as an important function of the company. The goal of a good CSR program is to make the company a good corporate citizen of the country it operates in. The aim is to initiate or support social development programs which have a direct impact on the development of the society, thus making a company socially responsible. Along with providing telecommunication services to more than half million people, providing direct income-earning opportunities to over people and

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being one of the to corporate taxpayers in the country, CityCell takes its CSR activities quite seriously.

10.0 Conclusion
The emergence of mobile phones made communication much easier. No matter where you are, people can always be in constant contact with you. Although, people in Bangladesh were a bit wary at first, they gradually adapted to the idea of mobile phones for easy communication. Nowadays, in Bangladesh almost everyone who can afford it owns a mobile phone. It is no longer a luxury, but it has become a common household item. Amidst, all this Pacific Bangladesh Telecom Limited is offering Bangladeshi people mobile telephony services. despite the low tele-density of Bangladesh and PBTL's strong subscriber growth (historical CAGR of 97%) since 1997, PBTL's has to expansion premium of more than 3.5x over the vendor shares, so that a substantial portion of their investment will be channeled to the company to develop network infrastructure. At the same time, have to appoint a chief technology officer (CTO), a chief operating officer (COO) and managerial-level finance position, as well as three of the seven members of the board. Also they have to increase the number of base stations from the current 300-plus to up to 1,000 to increase coverage and optimize efficiency in terms of network rollout. Power up the potential of people connecting through mobile phone; build a global medium that will shape the future of communication in the new century. Inspire an online community that is million of members strong, including every CityCell employees.

11.0 Recommendations
A primarily prepaid high growth potential Bangladesh's mobile market has been almost doubling in subscriber base since 1997 and yet is at a mere 3.9% penetration level. With this significant growth prospects for an over five-fold increase in subscriber base in the long term. On the flipside, relatively low GDP per capital levels to rest of the region combined with other economic and demographic factors make it a low predominantly prepaid market even in this early growth phase. CityCell current strategy remains revenue driven, rather than subscriber driven. They have to now focus on subscriber. However, PBTL's potential network expansion would enlarge its subscriber market share effectively, as supply continues to lag demand in Bangladesh, although the respective line yield is difficult to determine at this juncture. -CDMA handset costs key near term challenge Low affordability levels presents a near term challenge to PBTL as, despite significant drops in CDMA handset prices, they are still prices at a significant 15-25% premium to comparable GSM models. The low end Chinese CDMA handsets currently sell for US$50-60 per unit in the country, significant in view of real GDP of only 24

US$420 per capita levels. So CityCell has to collective bargaining power for handsets should provide some relief on this front given that many of its vendors like Motorola provide both GSM and CDMA handsets. SingTel remains favored Telco pick in Singapore SingTel is arguably the only true pan-Asian mobile play in the region with material presence in Singapore, Australia, Indonesia, Thailand, India, Philippines and Bangladesh. It remains favored pick of the Singapore Telcos providing a good combination of core profit growth, moderate valuations and an attractive 5.3% dividend yield which could potentially be higher in the event of further asset divestments in property or equity stakes in some of its smaller investments like in CityCell. it is a fairly small investment in the context of SingTel's S$5bn+ regional mobile portfolio ex-Optus. Under broad assumptions of long term market share of 25% and 28-30% market penetration, estimate value to SingTel's Shareholders from PBTL to be a modest 2-3cts/share over our existing sum of parts value of S$3.08/share. Bangladesh presents high growth opportunity with sub 4% and 1% mobile and wire line penetration. Handset cost and CDMA network issues present key near term challenges

Others
The verification of a customer's name and address should be done when while the mobile is being sold. The sales executive should have the freedom to verify the customer's name and address. In this way the activation executive doesn't have to waste time verifying documents. So, if the documents are not correct then in the first step itself the customer is told to bring proper documents for verification. As a consequence, customer dissatisfaction will be greatly reduced. The UNICORN software should be upgraded with newer and better software, in where the whole duration of activation process is cut down to minimum time duration. The whole process should not depend on so many personnel for approval. People should be given the empowerment for making decisions. The processes should be simultaneous. While one executive does one job the other person should start the next process immediately. The BTS capacity has to be upgraded for better and smooth connectivity.

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