Ufone Project:

Forwarded To:
SIR HANEEF SHAHZAD

Submitted By:

ABDUL MANNAN ADIL

Reg#: 376-FMS/MBA-ITM/F09

INTRODUCTION:
COMPANY PROFILE:

Pakistan Telecom Mobile Ltd, operating under the brand name of ‘Ufone’ a
wholly-owned subsidiary of PTCL commenced its operations on 29 th January 2001 as
a GSM 900 service provider. Since the outset it has expanded its coverage and
customer base at a rapid pace and established itself as one of the leading cellular
service providers in Pakistan. Ufone is now considered to be one of the most active,
aggressive and innovative players in the mobile sector of Pakistan.

The growth of cellular sector in Pakistan can also be attributable to good

governance and conducive policies of the government of Pakistan. In connection with
that in April 2006 Emirates Telecommunication Corporation, which is commonly
known as Etisalat, has assumed management control of Pakistan Telecommunication
Corporation Ltd – part of the $2.6bn deal to buy a 26% stake. The successful
privatization of PTCL, and consequently Ufone, is hailed as ushering in a new era for
telecommunications in Pakistan.

As mobile users in the country have reached 88 million at a very rapid pace,
Ufone has a subscriber base of nearly 17.5 million and a market share of nearly 21%.
Ufone has seen a subscriber growth of over 10 million since July 2007 onto its
network. Subsequently the growth in subscriber base caused a healthy trend in its
revenues and margins.

Ufone has always played a pivotal role in the development of cellular market
in Pakistan. For most part it has been a step ahead in introducing innovative products
to the market. Ufone was pioneer in launching the GPRS services and Multimedia
Messaging services (MMS) in Pakistan, including the lead in introducing GPRS
international roaming and prepaid international roaming for these services in the
Pakistani market. Currently Ufone has expanded its product portfolio to include Black
Berry handsets and providing one of the largest EDGE networks in the country today.

Ufone understands the need to communicate effectively and efficiently at all

levels of society, which is why various products are catering for the needs of the
Pakistan corporate market. It offers services such as mobile office, virtual private
network (VPN), and a lot more too revolutionized communication.

Ufone provides international Roaming facility with more than 215

international operators across 124 countries. Ufone has PRS roaming agreements with
more than 100 international operators and also provides prepaid roaming facility to
more than 15 destinations across the country.

INTRODUCTION:

Ufone commenced its operations, under the brand name of Ufone, from Islamabad on
January 29/2001. Ufone expanded its coverage and has added new cities and
highways to its coverage network. After the privatization of PTCL, Ufone is now
owned by Etisalat. Under the agreement, Huawei will provide its future-oriented
Energ GSM solution to expand Ufone’s network to cover 1500 cities, towns, villages,
and all major highways in the country. The network also allows Ufone subscribers to
enjoy high speed wireless data service. The GSM contract for Ufone also include
huawei’s new generation GSM dual density BTS that feature high integrated and
receiving sensitivity to improve the network performance and lower the cost of
network construction and O&M expenditure. In addition, Huawei will provide Mobile
Softswitch solution based on the advance R4 architecture to satisfy Ufone’s Network
expansion requirements, enables the telecom service provider to evolve into 3G
smoothly. Ufone markets its prepaid services as “Prepay”. Ufone prepay is more
affordable. Its primary market is intended towards teenagers and students. Postapay
services are marketed by the name “Postpay”. These services are mainly targeted
towards the business community of the country. Ufone has a subscriber base of
12.498 million as on April 2007 and has network coverage in more than 166 cities.

MISSION:

“Ufone it’s all about u! We are ,where you want to be…………..

At Ufone we aim to provide you with wider coverage, superior connectivity, clear
signals & voice quality. Wherever you are, Ufone keeps you connected”

VISION:

“To be the leading telecommunication service provider in pakistan by offering

innovate communication solutions for our customers while exceeding shareholder
value & employee expectation.”

OBJECTIVES:

Ufone because it is a dynamic organization with a powerful culture that allows people
to make the most of their skills, personality and career. I developed such knowledge
and skills which directed to my career.

CUSTOMER SERVICE:

Ufone is proud to have an efficient and friendly customer service through 21

company-owned Sales & Customer Service Centers and nearly 250 franchisees across
the country. The outlets are able to service the customers with innovative solutions,
and are empowered with Web based franchise management systems. Ufone is poised
to face the ever increasing challenges of the market and is confident it will attract new
customers. It has the ability to retain its existing customer base with a high level of
customer satisfaction via optimum network service and a 24 hour call center facility.

Chapter # 2:
Customer Driven Marketing Strategy:

Market Segmentation:

Ufone is segmenting the market according demographic segmentation, i.e. on

the basis of age groups. Ufone has segmented its product on the basis of its feature.

Ufone prepay is segmented for the youngsters, with attractive

packages to their requirements.
Ufone post pay is segmented for the people of mature age, having
their own business, belongs to business class or people who are
senior executive of the organizations.

Target Marketing:

Ufone has the target market concerning youth in the nation. This target market
of youngsters comprises of the 40% of population. Ufone is having focused
advertising towards the target market simultaneously focused brand building over the
market segment of youth.

Ufone is targeting the emerging segments of middle class in the population to

increase the number of subscribers as well as the revenue generation from these
subscribers.

Ufone has also targeted the corporate class, for which Ufone is customizing
the packages in order to preserve the existing small but profitable corporate of SME
market segment.

Ufone has always been targeting Youth Market by using young brand
endorsers or ambassadors. It always brings such packages and offers that precisely
meet the needs of our young people. No doubt it has also launched packages, brands
and offers for working people, business class, ladies and aged ones. Ufone seeks to
target masses in the long run

Future plans:

In order to extend cellular network to new cities, towns and highways and enhance its
current installed capacities in existing cities, Ufone has finalized a huge network
expansion contract amount to about USD 550 million, which will enhance the
subscriber’s capacity by 10 expansion project of Ufone.

Performance:

As mobile users in the country have reached over 76 million at a very rapid pace,
Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a
subscriber base of around 20 million and a market share of nearly 25%. Ufone has
seen a subscriber growth rate of over 200% in the last year and since the start of 2005
Ufone added nearly 5 million subscriber onto its network. Subsequently the growth in
subscriber base caused a healthy trend in revenue which have doubled.
POSITIONING:

Positioning is the process of creating an image of company’s brand in the mind of

market. Companies position themselves emotionally, functionally or on the basis of
brand quality. Ufone is still a market challenger in comparison to market leader
MOBILINK. It is still to reach to the top most position of cellular companies. So
Ufone positions itself on the basis of its services.

Ufone’s former Positioning Statement:

“Everybody Loves to Ufone Prepay “

Ufone’s new Positioning Statement:

“Ufone tum hi toh ho! “

Or
“It’s All About U”

Ufone’s Positioning Strategy:

Ufone changed the image of mobile phones from a luxury only affordable by the elite,
to a necessity affordable by the common man. Since its inception, Ufone has
positioned its brand for “MASSES” on the basis of services it is providing and its
lowest call rates. It makes them believe that it satisfies the needs of everyone (viz all
classes, age & genders). It tells them that Ufone is there when anybody needs it. The
brand name UFONE itself is a positioning statement.

MARKETING MIX:

1 - PRODUCT/SERVICES:

Ufone is a service providing company. Service is any intangible product that consists
of activities, benefits or satisfactions offered for sale.

Strategy:
Ufone makes strategies to provide a better cellular telephonic service which excels its
competitors at all levels. When Ufone launches a new package in a market, it actually
makes it a complete package of core benefit, design, features, brand name, quality,
and after sale service.
　
　
2 – PRICE:
Cellular service providers are facing intense price competition in contemporary
market. Customers perceive pricing as the heart of brand selection. Price has always
been the core differentiation of Ufone. Ufone is the one who is offering least call rates
off-network.

Strategy:
Ufone strategize to capture the existing pricing needs of its customers and use it well
on occasional or timely basis. For example Ufone offered very good call rates on
international calls in Eid days. It offered hourly call rates in Ramadan when people
were least likely to avail the offer that much that it might prove unprofitable for
Ufone. It was a fantastic strategy to beautify the brand image in term of pricing in
customer’s minds as well as remain profitable in doing so. Ufone follows market
penetration pricing strategy and dynamic pricing strategy to meet the customer needs
and ever changing price competition.
　

3 – PLACE:
Place plays a very important part in the distribution and promotion of services.
Competitors of Ufone are seeking to penetrate into places where others haven’t
reached. Cellular service providers are drastically widening their network & coverage
in every area of Pakistan. Mobilink has this edge in place excellence because it is the
pioneer in cellular telephonic field.

Strategy:
Ufone strategize to widen its coverage to all places in Pakistan in order to meet the
requirements of its increasing customer base. Now Ufone is heading from cities to
remote northern areas in expanding its network. Ufone has intensive promotion in
cities, but it is also considering improving its promotion in rural areas as well.
　

4 – PROMOTION:
Ufone believes in Integrated Marketing Communication which is a carefully blended
mix of promotion tools. Ufone employ different marketing activities and channels to
communicate and deliver value to customer. These activities are coordinated to
provide maximum communication output. These communication channels includes:-
Advertising, sales promotion, public relations, direct marketing & personal selling.
Ufone strategize to carry out promotion in order to increase its market share.

Strategy:
Advertising: (discussed later)
Sales Promotion: (discussed later)
Public Relations: Ufone is less conscious of developing its general
public relations. But recently it has launched its “Hajj Guide”
service on Ufone. It avoids getting in news stories and
controversies but sometimes it proves inevitable.
Direct Marketing: Ufone employ on-road umbrella franchises
where the directly market and sell their connections and Sims.
 Personal Selling: Ufone administer personal selling facility to sell
their PostPay connections targeting well to do people and
businessmen
 It won’t be an exaggeration to say that Ufone has placed itself where it is now
through brilliant promotions.

Competitors:

The following are some competitors of the Ufone

Mobilink (Jazz)

Telenor

Zong

Warid

There is a hard core competition among the cellular service providers in Pakistan.
Ufone is a market challenger in its competitive position, where MOBILINK is the
market leader. Warid, Telenor and newly introduced ZONG are also strong
contenders in market challenger category. Ufone has the following four direct
competitors:-
Ufone also considers the following as its competitors:-

PTCL WIRELESS

Wateen

WorldCall

SWOT analysis is an overall evaluation of the company’s

Strengths (S)

Weaknesses (W)

Opportunities (O)

Threats
(T)

STRENGTHS:

Strengths include internal capabilities, resources, and positive situational factors that
may help the company to serve its customers and achieve its objectives.
The strengths of Ufone are as follows:-
Ufone’s differentiation is its biggest strength. Ufone offers lowest off-net
Call rates that differentiate it from its competitors
Ufone is offering more and better Value Added Services (VAS) than its
Competitors i.e. Ufone’s Walkie Talkie.
Ufone is enjoying the second largest cellular network in Pakistan
Ufone has the most promising and attractive ATL (Above The Line)
Activities
Ufone has great management within the organization (internally &
Externally)

WEAKNESSES:

Weaknesses include internal limitations and negative situational factors that may
interfere with the company’s performance.

The weaknesses of Ufone are as follows:-

Ufone has less professionalism within the organizational members.

As Ufone is a subsidiary of PTCL, which was formerly under

Government management, Ufone still has a shadow of a government
Organization.

Ufone still has room for the betterment of its network coverage in
Comparison to the Market Giant “MOBILINK”.

Ufone has pathetic billing system for postpaid connections. This faulty
System creates a negative vibe among its customers.

OPPORTUNITIES:

Opportunities are favorable factors or trends in the external environment that the
company may be able to exploit to its advantage.

Ufone has following opportunities in its way:-

Ufone’s biggest opportunity lying ahead in near future is the phase of

Conversion of their GSM technology into 3G (satellite based) technology.

Ufone has the opportunity of growing its customer base due to increasing
Trend of using mobile phones.

Ufone has the opportunity to win the customers of its competitors by

Providing them superior services on lower price.

Ufone has the opportunity that it is pioneer in southern Punjab where it

Can promote it and become market leader on the basis of this very fact.
THREATS:

Threats are unfavorable external factors or trends that may present challenges to
Performance.

Ufone is facing/about to face the following threats:-

Ufone’s biggest opportunity is its biggest threat as well. The phase of its
Conversion of GSM technology to 3G technology can be a threat for it if not
Carried out properly.

The boosting customer base of Warid and Zong is also a big threat for
Ufone.

The decreasing economy rate and instability of Pakistan is a big threat for
All businesses in Pakistan including Ufone.

SWOT analysis of Ufone:

STRENGHTS
Ufone has network coverage in more than 750 cities, towns and across all major
highways of the country.
Ufone provides International Roaming facility with more than 150 international
operators across 79 countries.
Ufone is proud to have an efficient and friendly customer service through 21
company-owned Sales & Customer Service Centers and nearly 250 franchisees across
the country.
 Ufone has always believed in a solid commitment to growth, security and
reliability. Therefore, Ufone has always balanced its expansion efforts and quality of
service. With a total current investment of $400 Million.
Utunes was launched on 4th Dec2007 which attracted many people towards ufone.
Ufone is offering the service of Multi-media Messaging Service (MMS).
As mobile users in the country have reached over 78 million at a very rapid pace,
Ufone has maintained itself as the 2nd largest cellular operator in Pakistan with a
subscriber base of around 16.5 million and a market share of nearly 25%. Ufone has
seen a subscriber growth rate of over 200% in the last year, and since the start of 2005
Ufone added nearly 5 million subscribers onto its network. A remarkable achievement
indeed, especially considering the fact that two new international players also entered
into the market in 2005.
While keeping its tradition of being the trend setter in the industry, Ufone changed
the image of mobile phones from a luxury only affordable by the elite, to a necessity
affordable by the common man.
Ufone increased its focus on the youth segment (which comprises 50% of the
population), with the Prepay brand.
Ufone has the ability to retain its existing customer base with a high level of
customer satisfaction via optimum network service and a 24 hour call center facility.
    It has the post paid service that is normally to attract the Business class people.
Most of the business and elite class people use post paid and other services offered by
the Ufone.
Ufone has a subscriber base of 18.97 million as of October 2008.
Ufone was the first cellular Company in Pakistan that introduced the  service of
GPRS  and hence took the competitive advantage.
    Ufone has some exciting and energetic SMS packages that made SMS almost
free. They are offering Rs. 25, Rs.50, Rs.100, Rs. 150 SMS packages which its
subscribers are really loving it.
Ufone has some very exciting and low call packages like “5 ka 15” , “u-one”, u
circle”, “ U fone ghanta”, “U fone has some very exciting and low call packages like
“5 ka 15” , “u-one”, u circle”, “ Ufone ghanta”, “U fone life package”and “ prepay
Public Demand” etc which attracted lots of customers towards it and many other
cellular company users are also switching to it.
Ufone post paid is also offering black berry set that is useful and tempting for the
Business class.
Ufone currently caters for international roaming to more than 195 live operators
across 119 countries and introduced International roaming facility for Prepaid
subscribers in Saudi Arabia, United Kingdom, United Arab Emirates, Singapore,
Portugal and Kuwait with lowest rates, featuring no security deposit and activation
charges. GPRS Roaming facility is available with more than 75 Live Operators across
59 countries.

WEAKNESSES
Ufone does not have the proper lists of its customers. It has the list but this list is
not authentic which is increasing the unauthorized use of its sim specially pre pay. U
fone have to  take serious steps to properly list its customers to ensure that there is no
misuse.
It has many franchises in the whole country but as its customers are increasing day
by day so its present franchises are not enough to fulfill the needs of it customers.
Ufone also face problems and its network get jammed on special occasions like Eid,
Christmas, New year etc
Ufone has the problem of voice quality. Though its coverage area is vast and it
covers more than 750 towns and cities in Pakistan but the voice quality is not as good
as it  should be.
Ufone though has some unique and distinct services but  it has not yet given many
innovative services as compared to other cellular companies.
Ufone was the first to introduce the SMS packages but their packages are not
flexible enough and its charges are only on monthly bases while it should be on both
monthly and daily basis.
Call rates from u fone to u fone is very cheap but to other networks its rates are
expensive.
Its coverage on Southern part of Pakistan is quite good but in northern areas its
coverage is a bit poor.
In Ufone web support is not available.
Its customers service staff need training because at many franchises their employees
are have been complained about behaving rudely.
If Ufone company have to progress and grow in market it has to improve its
advertising campaign. Its advertisements are not good and eye catching.
Being the part of PTCL it has to face many problems like strike by employees etc.
When U fone came into the seen in Pakistan cellular market Mobilink was already
prevailing in the market and it was all Mobilink monopoly that time. Though with the
passage of time U fone took many customers of Mobilink but still Mobilink has large
number of users because it was first to Pakistan’s cellular market and this is the
competitive disadvantage to U fone.
Ufone is plagued with some internal problems like when it is privatized to Etisalaat
being the part of the PTCL many employees were not happy with the pay scale that
they were offering.

OPPORTUNITIES
Ufone could develop some new and innovative services to attract customers and
some of the suggestions are as under which will help them to increase their revenues:
1.It should introduced International SMS packages like local SMS. Already Ufone is
offering lowest International SMS rates but if they introduce some package like this it
will get lots and lots of success.
2.They should also introduce some International call packages to Middle Eastern
countries because there are lots of Pakistanis who are living in those countries so
people will definitely be tempted towards such package.
3. In “ Ufone ghanta” package time of the package should be extend two more hours
so that more & more people will use this service and causing U fone to generate more
revenues.
Ufone should develop some new franchises in remote areas so that people will get
more and more benefit from it and it will help to increase their customers.
As in Pakistan Youth is almost the 50% of the population so Ufone can take
advantage of this demographic situation and should introduce more and more services
and packages that attracts youth towards it.
Ufone should extend its network coverage area to Northern part of the country as
well because in that part not too many companies are giving services and if Ufone
give its service there then it will definitely attract people and its number of customers
will shoot like a rocket.
It should also introduce some packages for Internet users on mobile if it do so then
many people will switch from other networks towards it.
If Ufone enhance its voice quality then definitely it would be prefer more by
customers.
Ufone should import technological equipments from China because they are giving
the best technology at very low rates so it will not only help U fone to be ahead
technologically but also will help U fone to decrease its cost.
Ufone can surprise its competitors by introducing “U fone kiosk”. These will be
ATM like machines and that will give 24-hour service to U fone subscribers to load
the balance just like they take money from ATM.

THREATS
As Ufone is cellular company and there is cut throat competition among cellular
companies in Pakistan. There are six other companies also working in Pakistan so U
fone would have to face some growing competitive pressures.
Pakistan is facing some serious economic problems now days so that would also
effect U fone. The current recession in market is not good for any kind of business
including telecommunication.
In Balochistan and FATA where U fone already has network coverage is in danger
because of critical situation and operation being held there. Investment of U fone is in
danger.
Ufone penetrated in the market from 2005 to 2006 quite rapidly but since then it is
experiencing a bit slower growth.
By the arrival of China Mobile Company (Zong) in cellular industry of Pakistan the
U fone and other companies now have to face the severe competition. As Zong is
introducing some various attractive packages of both SMS and calls to attract
customers. U fone have to develop strategies to counter their strategy and to survive
in the market.
The key threat to U fone is also some adverse Government policies of implementing
Tax on telecommunication industry that will ultimately affect the revenues.
There are some rumors about the shares of PTCL in the market. Being the
Subsidiary company of PTCL, U fone will also be affected by that.
Telenor is giving higher rumenration to its employees as compared to U fone so
many of its skillful and competent employees are going there. That will affect the
company’s profitability in the long run.
Some Pressure groups are protesting on the Towers that are installed in residential
areas. Their opinion is that it is not good for health of people to have such towers near
their homes that cause radiations.
Ufone have to revise the list of subscribers who are legal and authorized. Because
now the Government has warn to take strict action if any company would not keep
such record

2 – PRICE:
Cellular service providers are facing intense price competition in contemporary
market. Customers perceive pricing as the heart of brand selection. Price has always
been the core differentiation of Ufone. Ufone is the one who is offering least call rates
off-network.

Strategy:

Ufone strategize to capture the existing pricing needs of its customers and use it well
on occasional or timely basis. For example Ufone offered very good call rates on
international calls in Eid days. It offered hourly call rates in Ramadan when people
were least likely to avail the offer that much that it might prove unprofitable for
Ufone. It was a fantastic strategy to beautify the brand image in term of pricing in
customer’s minds as well as remain profitable in doing so. Ufone follows market
penetration pricing strategy and dynamic pricing strategy to meet the customer needs
and ever changing price competition.