PROBLEMS WITH ZONG

Purchasing and initial problems

Zong's debut followed China Mobile's February 2007 purchase of
Pakistan's fifth largest telecom operator, Paktel, from Millicom.

Wang acknowledges that a gap between market developments in

China and Pakistan as well as cultural differences have presented
major challenges to China Mobile.

The Chinese company also had to restrain its ambitions after its
bid for all of Millicom's shares failed, apparently due to a price
dispute.

Excessive budget
Wang thinks 2008 will be a crucial year for Paktel. Following the
release of the Zong brand, the company is slated to expand
operations. China Mobile plans to invest US＄ 800 million in
Pakistan in 2008 in a drive to improve Paktel's coverage and
after-sales services. It has already spent US＄ 860 million to
improve and expand the Pakistani network.

Marketing
As far as the marketing is concerned, Salman Wassay, Director Marketing
at Zong admitted that the rising competition was making that job
extremely tough.

Call Center
There are couples of things where Zong is badly lacking, and I hope Zong’s higher authorities
are aware of these. One is their call center… very ordinary, in fact worst of all. They need to
scale up their work force. We were told that they are setting up a contact center in Lahore back
in July, but there has nothing happened up till now. Callers are made to wait for hours to get
responded. Also there are certain reports raising questions about their network - but i guess
network issue will be taken care of by planned investment in coming year
Deceptive Marketing - 1

Mobile phone subscribers were once again deceived by Chinese Let Zong, when
they saw an AD in today’s newspapers which read “Rs. 1 Only”.

Now let’s calculate what actually Zong is offering, and let me justify how Zong deceived (lied to) its customers

As per Zong’s official website:

Handset Price = PKR 499

ZONG SIM Pack = PKR 150
12 months on-net airtime = PKR 2,032.8 (PKR 140 x 12 = 1680 + 352.8 as tax)
Advance Tax = PKR 168
Total Deal Price = PKR 2849

So this Rs. 1 handset is going to cost you Rs. 2849 : -)

Check Points:

• You cannot buy handset or the SIM alone, means you will have buy the whole package
• Free Air Time will compass over 12 months, and you can not consume that in a single month, which means
you can consume free air time of Rs. 140 in first month and same in second and so on.
• The built-in on-net airtime worth PKR 1,680 is only for ZONG to ZONG calls,
• The un-used airtime will not carry forward to next month. For example if a customer uses PKR 110 worth of
airtime till month end then remaining PKR 30 worth of airtime will be lost (confiscated).
• Handset purchased under this deal would be functional with ZONG SIMs only. Other mobile network SIM
will not work on this handset.
• ZONG Handsets comes with six month warranty.
• Warranty can only be claimed from the customer service center it was purchased from.
 • After 12 months customers will stop getting PKR 140 worth of monthly built-in on-net airtime. The customer
can use the handset and the SIM after 12 months by recharging account as per regular procedure.

Deceptive Marketing - 2

Mobilink, last month, kicked off the war with Jazz one, Telenor responded with A One; however both
were defeated by Ufone’s Uwon. And now Zong feeling the heat and joining the club with 8 Anay
per Call offer.

Two things are seen common amongst all cellular companies; they are attacking each other…and at
the same time deceiving their customers through un-clear advertising campaigns and claiming their
packages as best one.

Let’s look at the print ad and try to solve the equation, regarding what actually the pricing would be
for this package….

• Regular Rate: 75 Paisa per 30 Second

• FnF Number: 50 Paisa per 30 Second
• How to Activate Package: Call 907, an automated voice will guide you through the
process (here you will be asked to enter one FnF number)

Check points:

• AD says 40 Paisas for first minute will be charged; for God Sake your pulse rate is 30
second, how can you communicate additional charges per minute? Yes they are charged
for first 30 seconds, if you hang the call in 20 seconds that will cost you 50+40=90 paisa + taxes
• You can select only one FnF number from any cellular network, while the advertisement
clearly stats “Koi bhi Number, Koi bhi Network, Sirf 50 Paisay per 30 Seconds”. I am not
sure how many but at least million customers will be negatively affected by this.
• FnF number modification: No Information on Print AD, but their website says, Addition/
Modification of FnF will charge you PKR 15 + Tax. How many of Zong customers visit
their websites? A 8 x 2 advertisement could be filled with complete information.
• Only numbers of Mobilink, Telenor, Ufone, Warid, and Instaphone can be added for this
offer, means you can’t add Zong Numbers….

I am feeling pity on our country and our nation who are misguided every other day, and none of us
can take these looters to court.
I just called this “Network for Consumer Protection”, and asked them if there is any good way to bug
these cellular companies for ambiguous un-ethical advertisements, but the lady there told that there
is no advertising law in Pakistan. She confirmed that there are some code of conduct saved by
PEMRA or PTV but that’s scattered. I was shocked to learn that we have no code of conduct for
advertising for print media; that’s due to the interest of APNS, that they are more of
concerned with the money they are getting from advertisers.

I was told that there is a Consumer Protection Court in Rawalpindi, but at the same time, that court is
just for the sake of formalities. It does nothing…!

See below what is being followed in US

Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in
or affecting commerce, are hereby declared unlawful - Section 12 of the act makes it unlawful to
disseminate any false advertisement for “foods, drugs, devices, services, or cosmetics.” - Federal
Trade Commission Act, 15 U.S.C. § 45(a).

I remember an American parents sued a Washing Machine Manufacturer for not exclusively
mentioning that their washing machines are dangerous for children under 7. Their 3 years old kid
was killed when he jumped into machine tub. And interestingly, the couple had won the law suite.

Copied AD
Zong has allegedly copied the theme and the content of a UK telecom company’s AD.
This actually disappointed me, keeping in view the popularity that the Zong AD had
gained since its launch.

Zong bouncing out from China mobile had been doing pretty well as far as TV and print
advertising was concerned. They started off with a very impressive teaser campaign
both in Print and Electronic media
and then after launch series did the wonders. As far as Zong TV commercial is
concerned, two aspects particularly gained the attention. The first was an, smile but
elegant, amusing, rather glowing TV Ad which shows a guy walking and talking about
Zong. The Ad looks to poke fun at competition and at the same time introduces Zong as
a more affordable and more flexible service.

Our marketing gurus have also discussed the campaign, in a marketing forum. Here is
the Zong’s AD that we see
Zong PACKAGES

12 Aanay Package:
Talk for an entire hour - any hour, for only Rs.4.99 and for the first time in Pakistan you
can change the hour everyday!

Pay 30 Second Charging

ZONG to ZONG 75 Paisas

ZONG to any other number 75 Paisas

SMS to any network 75 Paisas

Happy Hour Rs. 4.99 per hour

ZONG Friends and Family

5 Numbers
numbers

ZONG Friends and Family rate 50 Paisas

*8 Aanay Offer 50 Paisas

MMS Rs. 3/100KB

Mobile Internet Rs. 15/MB

* 40 paisas extra will be charged during first minute

* 8 Aanay offer is only for one off-net number at a time and it can be changed any time
* 8 Aanay offer can be selected by dialing 907 and each addition/modification will be charged at
Rs. 15 + tax

* 30 Second Charging
ZONG 12 Anay is available at all ZONG Sales and Services Centers and selected retail
outlet across Pakistan.

• Happy hour needs to be activated by the subscriber; every action/modification will be

charged at Rs5.
• Friends and family rate apply for 24 hours, for those customers who have subscribed for
happy hour, Friends and Family rates will not be applicable during that hour.
• Happy hour can be modified once everyday.

ALL CED and Taxes apply.

8 Aanay/Call:

8 Aanay/call
ANY NETWORK ANY TIME
Just 50 paisas per 30 second

People claim of simplicity and yet give you half the truth. Only ZONG gives you the full
truth at half the price. Now make calls to any other mobile network for 8 aanay i.e. 50
paisas per call and you can change that number any time you want. You will have to
pay 40 paisas extra for the first minute only.

So say it clear, say it loud, say it to anyone, and say it all!

To avail this offer please dial 907 from your ZONG number. This offer is available on 12
Aanay package only.