Report

On
Mobilink-Warid
Merger
Question No.1: Why Mergers take place, what are its basics?
Answer: Before discussion about why mergers takes place we must know about merger concept which is
briefly discuss below:

Merger
Merger is basically a fusing process between two company’s means that two or more than two companies
get fused to one. Merger is a transaction between two willing parties’/companies buyer and seller so we
say merger is a process in which two companies become a one means that one company/corporation is
completely absorb from another corporation and retain a name of those corporation which have a strong
financial and market positions like for example Mobilink retain its name because he buy Warid
completely. Merger is take place for many strategic business reasons like gets competitive advantage,
optimize a market shares with less resources etc. The basic aim from merger to get more output from less
input. Each and every organizations gets everything for its own benefits.

 If business firms wants diversification (a broader products and Services) then he thinks about
merger and sometime it can be happen.
 Due to Merger, Business firms easily improved its financial positions in a market.
 One of the easy tool for getting more market shares with less inputs.
 Merger will allows organizations to get a peek position in a market.
 Merger provide future growth opportunity.

Types of Merger
There are basically five types of merger which are given below:
1. Horizontal Merger: It occurs between two or more firms which have same geographical area
also compete in same business line
2. Vertical Merger: It takes place between firms in different level of production operation. Further
it may be forward as well as backward vertical merger
3. Market Extension Merger: It related with sales. There is no overlapping but for expansion it
may acquire firm’s geographical. Its aim is to reach to the product market.
4. Conglomerate Merger: In this type of merger, two different lines of businesses merge under the
same ownership and there is no relationship between them before merger.
5. Consolidation Merger: Merger occurs between those firms which engaged in same lines of
business and also under control in same management.

Basics of Merger
Why organization take place a merger? Different reasons behind it some are given are given below:
1) Defensive Measures
If a firms or companies properly managed its resources then it may lead to greater commercial growth in
an industry and also in a market. We all know some companies have defensive in nature and he wants to
commercialize its market position so then he thinks about merger. Means try to minimize risk and follow
those ways in which we make more output from less input.
 2). Diversification
Every company wants efficiency in all aspects and we all know each and every company have its own
strengthen and weakness points. If companies perform a merger its means that he share its resources with
each other and both are efficiently cover its weaknesses.
3). Synergy
It’s a source through which companies increases its performance and decrease its cost. It’s also a potential
ability through merged entities faced reduce in costs, increase or growth in revenue, more competencies
means that top groups to engaged/collaborate on key areas of synergy while other areas are left intact.
4). Growth
Through merger firms are acquiring new customers and further faced the growth in revenue and also
introduce a new facilities.
5). Reduce Competition
Now a days in all over the world there is a tough competition and every one try to achieve or avail related
opportunities. So if a company want to perform a merger then its mean it reduce a competition and try to
get competitive advantage.

Question No.2: The winning strategy for mobile communication companies in Pakistan has
been the ‘Cost leadership’ strategy. How do you view this strategy for this current merger?
Answer: Before I mention the impact of cost leadership strategy to this recent Mobilink and Warid
merger we all must know about the concept of Cost leadership strategy.
It stated that how a companies get ahead by lowering their operation costs beneath those of others in the
same business line.
Companies try to fine those ways in which they can offer a product or services with lower prices as
compare its competitors.
As we all know Mobilink wants to become a market leader that’s why he take a step of merger. There is a
great competitions found in Pakistani market. All of them try to become a market leader. Every one
follow the cost leader strategy.
Initially Warid Pakistan launch its services in May 2005 and also gain popularity in a market but due to
less innovation he loses its popularity gradually. Now turn to Mobilink, It take a top position in a
Pakistani because it is a first network of that sectors and also target a Corporate section of a country, due
to the huge and quality services it takes a competitive advantage from others but the problems is that
majority of a person’s suggest that mobilink is an expensive network which is opposite statement from
cost leadership strategy. Now a days, every telecommunication company in a Pakistan try to provide its
services with less inputs like for example Telenor consider as the fastest growing network. Due to tough
competition mobilink how I gets a competitive advantage then he decide to take over Warid because he
knows that Warid faced difficulties in market. Through this merger both have efficiently follow the idea
of cost leadership strategy.
As Mobililnk knows Warid have a 4G/LTE license and he have only 2G and 3G license which warid
doesn’t have so if we become a merged then we share our resources which become a win-win situation
for both companies.
Due to sharing of towers both were provide its services with best way and also in less cost also it will
reduce its operation cost and provide the quality services. With that both are set standard for others which
are complicated to achieve for others like for example Mobilink avail the 4G/LTE license with less cost
as compare if they purchase directly. Due to this he provide the services of 4G with cheaper rates as
compare its competitors like Telenor.
As we all know Mobilink has faced the burden of customers which directly impacts its quality services
and other sides Warid hasn’t faced the burden. So Mobilink try to shift the on Warid which maintain the
customers as well as quality services.
Through sharing of resources both are able to reduce operation cost which will allow them to provide
services with cheaper rates which attracts more and more customers.
Simply is that, we now easily Mobilink is in driving set and he set standard for others which is more
complex to achieve but for Mobilink it is easy to achieve.

Question No.3: Analyze the anatomy of Warid-Mobilink merger by describing which company
gained more from this transactions?

Answer: If both companies were agreed to merge then its mean both have try to assured its own benefits
so it is complex to say who have a more benefit from this merger but if I says that it is win-win situation
for both then it is not a wrong statement because Warid start losing its customer but he have the 4G/LTE
license. Now, if we thinks about Mobilink which already has a 29 % of market shares in overall Pakistani
market and serve 35 million customers before merger and now 45 million customers serve. Mobilink
claims that he take more benefits from this merger and now I is in driving set and also set a standard for
competitors. Mobilink suggests that he has different benefits from this merger which are given below:

 Provide best superior customer services.

 Through merger both are become a leading high speed mobile network and also become a best in
class.
 After merger Mobilink will provide the 4G services to its customers because of Warid and also
Warid customers enjoy the service of 2G and 3G because of Mobilink.
 Both companies recharge their Sims by using of any one of the card either Mobilink Card or
Warid Card.
 Strengthen the Market position of both companies.
 Resolve the signal problem and low connectivity problems.
 Through merger both companies upgrade its SMS delivery by making it quicker and faster.
 Also provide user friendly online banking services on mobile.
 Increase the customers and serve about 45 million customers.
 Provide more and more facilities with competitive price.
 Increase the revenue of both firms which is USD 1.4 billion at Sep 2015.
 Also gets a unique strengths in market.
 Both companies eliminating its deficiency through sharing of resources.
  Due to increase in output both firms can reduce its average costs (Economies of scale).
 Also helps both companies to compete in international market or easy to become an international
brand.
 Both firms enable to invest more and more in Research and Development department which
innovate its services.
 Both companies are able to generate more revenues and also enjoys significant financial gains.
 It also a tool through which both firms improve its future strategy.
 At somehow both companies will be protected from its main competitors like Telenor, Zong,
Ufone.
 Both companies thinks that through merger we easily create a value.
 We also optimized organizational structure through this merger.

Question No.4: Describe some of the post-merger integration challenges for Mobilink?

Answer: As we all know every organization have different strategies. So Mobilink and Warid are two
different companies before merger and have different strategies and management for compete in market.
Now, Warid fused in Moblink that’s why Mobilink faced different types of challenges in future. Some of
them are given below:
1). Understanding about Warid
Both have different type of working environment. Now Mobilink wants to follow our working
environment. If both have same type of working environment then it is not challenge. If they have
different type of working environment so then How Mobilink solve it. Understanding about employees is
also a crucial issue for Mobilink.
2). Mutual Trust
After merger Mobilink try to maintain trustful relationship. It try to fulfill all aspects which he promised
to Warid. So it is also become a challenge for mobilink.
3). Customer Satisfaction
Now Mobilink claim that he serve about 45 million customers throughout Pakistan after merger. As we
all know Customer is a king of businesses. Due to the merger Mobilink increase its customer range so the
challenge is that either Mobilink satisfied and managed this huge number of customers or not.
4). Quality Services
The reason behind the success of Mobilink is its Quality services like its clean voice calls etc. So the
question is that after merger Mobilink will maintain its quality services or not.
5). Change in strategies
Mobilink also occurs change in some aspects of its strategy and they must take the change as a challenge
because mobilink must think that it is favorable change for us or not.
6). Brand loyalty
There are some customers which are brand conscious or brand loyal. Mobilink and Warid also have a
these types of customers so the challenge is that how a Mobilink maintain a brand loyal customers.
7). Communication
After merger, there is some level of employees especially in Warid feel uncomfortable and feel fear about
firing. So if both companies want it then he communicate this message to the relevant person. It also a big
a big challenge for Mobilink because he want to maintain the competent employees.
8). Differences
We also know that every company follow its own strategy which mostly different from its competitors.
Before merger both are competitors so its mean both have different policies and strategies. Now the
challenge is that, if in any there is difference found then how Mobilink deals or manage it.
9) Working Environment
Every organization have its own working environment. Someone make it challenging while someone
make it relax. If both have same type of working environment then it is OK. If Mobilink found the
difference at somehow then he manage it.
10) Compensation and Benefits
Are Mobilink retain the competent employees of Warid through its compensation and benefits? I think it
is most important challenge for Mobilink because if he loses then he must suffered at future.
I think there is a more a lot of challenges which Mobilink face at future because It is the first merger in
the history of mobile telecommunication sector of Pakistan. If Mobilink done it then its means it have the
capabilities and resources to manage the challenges because everyone wants to become a market leader.

~~~The End~~~