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Strategic Marketing & Planning

Group Members:
S.Husnain Jafri 4781
M.Taseen 4772
Raza Ali Mirza 4777
Date of Submission:
12th December 2010

S u b m i tt e d t o :
M r. E h k l a q u e A h m e d

I n s ti t u t e o f B u s i n e s s
Management

MBA Regular
 LETTER OF ACKNOWLEDGEMENT

December 13, 2008

Mr. Ekhlaque Ahmed,

College of Business Management,
Institute of Business Management.
Karachi.

Dear Sir,

This report on “Business Plan of Warid Telecom” has been prepared as a part of the course
requirement for “Strategic Marketing & Planning”. The material compiled and presented in this
report is a result of exhaustive work.

This report has proved to be an extremely instructive and creative experience. For this, we would
like to thank our course instructor Mr. Ekhlaque Ahmed for providing us the opportunity.

Sincerely,

S.Husnain Jafri 4781

M.Taseen 4772

Raza Ali Mirza 4777

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BUSINESS SCOPE
Business Scope describes “The Business we are / want to be in” through the eyes of the
customers. It defines the areas of operation for the organization. It encompasses the following
questions:
Where
 Warid’s head office is in Lahore
 Warid is present in Pakistan, Bangladesh, Congo and Uganda under the parent company
Wateen backed by an Abu Dhabi group.

What Needs
 Communication.
 Mobility and Convenience.

Whose Needs
Primary:

 People mostly engaged in fieldwork.

 People who do frequent traveling.

Secondary:

 Consumers falling in age group of young adults and above (for e.g. students, housewives
etc.)

Added Value
 GPRS, EDGE
 Wireless broadband
 MMS, International SMS.
 Self recorded caller tunes.
 International top-up.
 Balance summary after every call.

Consideration
 To grow the network in order to enhance connectivity as well as increasing the subscriber
base.
 To cut down the tariffs as compared to the competitors.
 To introduce more value added features and services.

Business We Are Not In

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 Mobile Commerce (Easy Paisa)

PRODUCT LEVELS

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 1. End user/application segments
MARKET STRUCTURE 2. Product application combinations
3. Distribution structure

SME / Households Youth Students

Masses Masses
Corporate Low Income Students Professionals
Target Market
Mobile Broad
Post Paid Pre Paid Pre Paid FLL/ WLL
End user/applications Commerce Band
Persona
Persona Talk Shawk DJuice Easy Paisa Wateen V-PTCL
Products
Indigo Jazz ,Zem Ufone Genie Infinity PTCL
Warid
Warid Prepaid
Post-Paid
Post-Paid Glow

Channels Franchise
Direct 3rdParty Sales & Service
Sales Chains Centers

Channels
Retail Network

Telecom Industry

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EXTERNAL ANALYSIS

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GROWTH OF TELECOM SECTOR IN PAKISTAN

Overall business environment of Pakistan remained negative during FY 2008‐09. High

inflationary pressures and reduction in buying power of consumer has directly impacted all
industries including telecom. On other hand factors like energy crises, currency devaluation,
liquidity crises coupled with increase in borrowing cost, industry price war has adversely
affected the net worth of the companies.

Although tremendous growth has taken place in the Pakistan telecom sector but most of it can be
attributed to the cellular growth. Fixed line is still awaiting a take off. Similarly Value Added
Services have grown but are still a drop in the bucket. Now that the competition has been
introduced in the telecom sector some very positive impact have been observed on the growth of
the sector in a short span of time which is expected to continue to grow for at least next five
years if the daring investors influx continue as in the last 3 years. A brief account of the growth
in telecom sector is given below.

Mobile Sector
Driven by lowest tariffs, maximum coverage, and relatively better quality the Pakistan mobile
market maintained rapid growth during till 2007. The newly deregulated mobile market is now
working on sustaining the mobile boom that hit Pakistan 2 years back and on the brink of adding
Value Added Services to increase ARPU along with customer satisfactions.

Steady growth saw addition of more than 5 million mobile subscribers last year. Network
coverage of almost 90% of the total population of Pakistan has made mobile industry even more
attractive for foreign investment. Pakistan has emerged as one of the fastest growing mobile
markets among the developing nations. This year the sector grew by 5.1% in terms of number of
subscribers whereas average growth rate in last 4 years has been more than 60%. Today total
subscribers have reached around 100 million (July 2010) whereas it was 94.3 million in 2008 and
88 million in 2007.

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Market Share: Telecom Industry – Current

Analysis:
 Total teledensity of the country reached 64.08% with 3.5% increase registered in 2009-2010.
Cellular mobile sector took lead in the increase of teledensity, offsetting dwindling figure of
fixed/wired line teledensity.
 Emergence of effective ccompetition between telecom operators continued in telecom sector
benefiting the consumer in terms of lowering tariffs and unraveling investment possibilities.
 Mobile telephony has substituted the fixed line telephony in Pakistan with teledensity ratio of
94% to 6% in 2010.

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Telecom Revenue by Service

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Analysis:

 Telecom sector revenues improved steadily in the FY 2009-2010 and 6.5% growth rate was
witnessed.

 Total telecom sector revenues reached Rs.357.700 billion in FY 2009-2010 as compared to Rs.
333.80 billion in the previous year.

 Cellular mobile sector remained the forefront of revenue generation and its revenue increased by
about 11% in the current year to Rs. 236,046 million as compared to Rs. 212,423 million last
year.

 Cellular mobile sector revenue stands at 70% in the FY 2009-2010 compared to 64% last year.

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2
Analysis:

Telecom industry continued to attract foreign direct investments (FDI) to expand the
infrastructure and maintenance of their networks. However, the volume of FDI also continued to
decline with the maturity of market over time. During the year December 2009-2010, telecom
sector attracted US$ 374 million FDI which was 17.0% of the total FDI in the country during this
period while in previous year FDI in telecom sector was reported US$ 815 million that was about
21.9% of the total FDI in the country. Similarly as we go in the past years, the percentage of FDI
in telecom sector was high.

Strategic Outcome:
 Due to the heavy investment, consistent advertising, strong branding and promotional
activities done today by Telenor, Ufone, Warid and Zong, it will change the share of the
pie in 5-6 years in which Mobilink will not have a distinct lead but the market share
percentages would be quite close to each other.

 Due to intense competition it is expected that the network and coverage will improve
consistently.

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2
Analysis:

 Total mobile subscribers in Pakistan have reached 99 million at the end of year 2009-2010 and
reached at a level of 100 million at the end of July 2010.
 During the fiscal year 2009-2010 cellular mobile subscriber showed a growth of 5.1% as
compared to 7% in year 2008-2009.
 The slow growth is attributed to the fact that PTA has implemented the standard Active
Subscriber’s definition in the industry which has forced the operators to adopt data cleaning
process. Similarly impact of verification of SIM’s and falling economic and security conditions
also played role in slow growth in subscriber numbers.
 Mobilink reported a figure of 32.2 million subscribers followed by Telenor at 23.8 million. Drop
in the subscriber’s number is reported by Ufone and Warid.
 A total of 4.9 million subscribers were added to total subscriber base of mobile industry
in the year 2009-2010. While analyzing the net additions in the subscriber’s base by each

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 operator. Telenor added maximum subscribers to its network during the year 2009-2010
by 14% however Mobilink subscribers grew at a rate of 10.7%. While Warid and Ufone
showed a decline in subscriber no’s.
 Ufone went through a massive data cleaning exercise in 2009 and did huge off-boards
from its networks thus lost almost 0.8 m subscribers during 2009.

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Analysis:

Analysis of the Market share is carried out

on the basis of two parameters, subscribers
and revenues. Market shares of Cellular
Mobile Operators indicate that market is
moving toward perfect competition where
the share of major operators are declining
and new entrants are able to grab more
share in the market. Although Mobilink
still enjoys the lion share in terms of
subscribers and revenues both but the gap
between Mobilink and other operators has
been narrowing. Looking at the subscriber
base Mobilink has the maximum share of
32% followed by Telenor, Ufone and
Warid with 24% and 19.7% and 17.1%
respectively. Comparing this years market
share with 2008-2009 it is obvious that the share of Warid and Ufone has gone down by 1.9%
and 1.3% which is taken over by Mobilink and Telenor where as Zong maintains its market share
at 6.7%.

Total revenue of the mobile industry stands at Rs. 236.74 billion during the year 2009-2010.
Mobilink is leading in terms of revenue as well with the 36% share. Telenor has also improved in
terms of revenue with 25%. While revenue of Warid dropped by about 1% compared to previous
year. Conversely in case of Ufone, although subscribers have dropped by 3% but the revenue
was not adversely affected rather it improved.

Strategic Outcome:
 Mobilink still is the market leader and will continue to lead the for next few years but
keeping an eye on the intense competition, marketing and sales activities and the amount
of investments that is being done in this sector, Mobilink has to face a tough time and
some other companies might gain the market share.

 Due to intense competition it is expected that the network and coverage will improve
consistently.
 The total no. of mobile subscribers is expected to be around 102 million by the end of
2010.

Analysis:

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  Mobile penetration in Pakistan had been increasing at a very high pace from 2005-2007
and the growth was outstanding, however with the market getting mature and saturated
the growth rate started to drop in 2007-2008.
 Now the growth rate in mobile penetration is stable and penetration stands at 60.4%
showing a cumulative growth of 5% in last 3 years.
 Pakistan is among the five dynamic economies of developing Asia in terms of increased
penetration of mobile phones. (UNCTAD)
 The mobile operators have been working aggressively to increase their network
especially to unserved areas but disturbance in Khyber Pakhtunkhwa and Baluchistan is
hampering the progress of communication.

Strategic Outcome:
 Though still 40% of the Pakistani market is untapped, there is still lot of potential in
Pakistani market to get some handsome number of subscriptions and mobile operators are
working aggressively on it.

Financial Projections:
Teledensity 2007 2008 2009 2010 2011 2012 2013 2014

Local Loop 3.04% 2.70% 2.17% 2.08% 2% 1.85% 1.75% 1.70%

Cellular Mobile 40.90% 54.70% 58.22% 60.40% 64% 67% 70% 72%

Wireless Local
1.08% 1.40% 1.60% 1.60% 2.10% 2.30% 2.50% 2.70%
Loop

Stable growth expected in cellular mobile sector; Warid should start focusing on market
penetration

MARKET SIZE – Performance (Past and the Future)

Market 2007 2008 2009 2010 2011 2012 2013 2014
Segment

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Cellular 63.1 88 94.3 99.2 104 109 114.5 119
Subscribers
(millions)

Growth 81% 40% 7% 5.1% 5% 4.5% 4% 3%

Rate %

IMP:

 Slow growth is attributed to the fact that PTA has implemented the standard Active
Subscriber’s definition in the industry which has forced the operators to adopt data
cleaning process.
 Impact of verification of SIM
 High taxes
 Falling economic and security conditions

Cellular Mobile Revenue (Past and Forecasted)

Market 2007 2008 2009 2010 2011 2012 2013 2014

Segment

Cellular 133,132 182,122 212,423 236,046 259,651 283,019 308,491 336,255

Services
(millions
)

Growth 48% 37% 17% 11% 10% 9% 9% 9%

Rate %

    Mobilink Ufone Zong Telenor Warid Total Growth

Rate %

2009-10 No of 31,942,000 19,443,200 6,464,464 23,609,600 16,764,800 99,200,000 5.1%

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(Current) Subscribers

% Share 32.2% 19.6% 6.7% 23.8% 16.9% 99.2%

2013-14 No of 33,320,000 23,324,000 9,520,000 30,940,000 21,420,000 119,000,000 19.95%

Subscribers
(Projected) (accumulated)

% Share 28% 20% 8% 26% 18% 100%  

Strategic Outcome:
Telenor must maintain market share in cellular industry and explore other areas like mobile
commerce to increase the overall revenues and scope of services. With increased maturity and
lesser volatility in the market, Telenor need to concentrate more towards improved quality and
value for money to ensure customer loyalty and increased ARPU.

Company 2006 2007 2008 2009 2010

Mobilink 54,065 64,654 79,936 83,271 84,976

Ufone 16,098 21,867 27,455 40,060 49,569

Zong 3,329 2,897 2,585 8,274 11,803

Instaphone 1,539 472 260 24 24

Telenor 6,338 22,837 45,081 51,561 59,012

Warid 8,527 20,405 26,805 29,233 30,686

Total 89,896 133,132 182,122 212,423 236,046

Assumptions for Growth in Telecom Sector

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 The macro economic environment will become more challenging.

 Competitive pressures continue to be strong, contributing to price declines in Cellular

segment.

 Consumers have an increasing choice of converged communication offers from

established mobile and wireless line operators, as well as newer entrants. They include
handset manufacturers, internet-based companies and software providers.

 Regulators continue to press for lower mobile termination rates and roaming prices.

 Socio-economic situation of country is also responsible for sluggish growth.

 Depreciating value of Pakistani rupee will turn out to be the biggest catch for cellular
companies. Lowering value of PKR has resulted into low revenues in foreign currencies
and higher import costs – resultantly cellular companies invested nothing or very little for
network expansion.

 Broadband has been one of the most penetrative and fastest growing phenomena for
information dissemination in recent times. Latest wireless technologies like Wi-Fi,
WiMAX and EvDO, are catching up fast with the conventional wire line methods.

 Expected increase in per capita income of population over next few years.

 Increased focus in Mobile Commerce Solutions

 Average ARPU (Average Revenue per Unit) for the industry is expected to decline
further. Challenge to keep ARPU constant.

 Large emerging Middle Class segment to be targeted

 Explore Small but profitable segments – Women, Corporate Clients

 Services to be extended in rural and interior NWFP / Baluchistan

INDUSTRY LIFE CYCLE

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Key:

A- Mobilink,
B- U-fone
C- Telenor, Warid
D- China Mobile

PRODUCT LIFE CYCLE

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SERVICES INTRODUCTION GROWTH MATURITY DECLINE

Cellular        

Fixed Line        

WLL        

Cellular INTRODUCTION GROWTH MATURITY DECLINE

Prepaid       

Postpaid       

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2
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SALES AND DISTRIBUTION STRATEGY

National sales manager and General sales manager of Warid meet in a meeting once a year. In
this meeting Warid sets targets for the following year. The targets are set through mutual
consent.
These targets are then further divided among the different cities of Pakistan. The NSM delegates
the targets to be achieved to the sales Manager of each city. Each city is geographically divided
among North, South and Central Regions and is given a specific target to achieve. These targets
are given after analyzing the business prospect of each city.

Warid caters its services through Direct, Indirect and In-house selling.

In all the cities sales are carried out by the above mentioned ways. By continuing the same
example the targets which are given to Karachi are further divided among direct, indirect and in-
house sales force. Direct and In-house selling is done by Warid appointed employees while
indirect selling is done through Franchise agencies.

Sales and distribution of Warid telecom is classified into two branches post-paid and prepaid.
Post paid is look after by the corporate sales team which is further classified into sales officers,

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TL’s and SME Executives. The prepaid segment is sold through 417 franchises Retail Outlets
(General Shops) throughout Pakistan.

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Analysis:
After the crunch economic time of 2008 when telecom was facing heavy taxation and low ARPU
due to recession in the market and poor financial condition ( high debt to equity ratio) were not
able enhance there network coverage. Recently injected equity of $250 million by the joint
shareholders Abu Dhabi Group and Singtel have led to active strategic plans that were in
pipeline but not active due to financial constrains.

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KEY PROCESS INDICATORS

KPIs Industry Where are we Improvement Improvement

Benchmark Plan 1 Plan 2

Network 45 % 30% Signing two Ericsson has

Quality contracts with announced a new
Huawei which three-year managed
cover services agreement
will
which will include
purchase and network optimization
installation of 22 services, to ensure the
cell sites. quality of the
operator’s network.
Low Cost 65 % 70% By having a To maintain a
leading balanced advertising
international budget to transfer cost
leader such as savings to consumers
Ericsson as a
partner, we are
confident that we
will deploy a cost-
effective network
that provides for
scalable coverage.

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 Customer 15% 10% To increase While at the same
Care Services nationwide time is flexible and
network of state- future-proof to
of-the-art sales accommodate future
and customer capacity expansions
services centers and next generation
which currently services.
count to 25

New Product 20% 15% Raise funds Recently equity of

Activity through loan $250 million was
agreement of injected by the joint
around US$500m share holders in order
to Finance EDGE- to strengthen it
compliant mobile financial back and
network prepare for new
expansion. licensing like 3G.

Brand 35% 25% To provide To offer simple and

Loyalty premium clear priced packages
connectivity and for post-paid with
the optimal VAS.
experience to
promote loyalty

Distribution 40% 30% Improve and Corporate sales team

increase for direct selling to
distribution corporate clients and
through franchises SME clients.
and retail outlets
which are
currently 417 and
about 8,400
respectively

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2
2
 Strategic Outcome:

Due to low need and low spending the usage of prepaid sector for Warid is quite low. This will
result in low revenue and low profitability for the company.

Majority of the population is financially constrained so they keep their usage to a minimum. Also
the trend of keeping additional SIMs exists where people buy SIMs but do not use them. ARPU
for prepaid is very low and hence the revenue generation for the company is very low due to low
usage by prepaid users.

Stiff competition from Mobilink, Telenor, Ufone and China Mobile has led to serious reductions
in prices of about 10-20%. Profit after taxes has gone into negative showing that company is
incurring losses starting from FY2007-08 and further reduces to in FY 2008-09. One of the main
reasons for losses is due heavy taxation imposed by the government of about 21%. Decrease in
the market share is also contributing factor as well for losses.

Rating Against Customer Buying Criteria:

Warid Mobilink Telenor Ufone

QUALITY & PRICE

Non Price Attributes WEIGHTAGE

affecting Customer Choice %

%
Product-Related

1. Network Quality 24 7 9 8 5

2. Coverage 17 6 9 7 8

3. Tariff 38 8 6 7 7

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4. Brand Name 11 6 9 8 7

Service-Related

5. Distribution 7 7 7 7 7

6. After Sales Service 3 6 6 7 6

TOTAL 100 % 40 46 44 40

Has quality gone up /down (+/ -) in

Gone Same Gone Up Going
Past 4Years Down Down

Analysis:
 The rating against customer buying criteria shows that Warid attains (40 points) still
behind Mobilink with (46 points). Warid have to improve its marketing strategy to
register it brand name for better consumer buying preferences.
 Although the quality of Warid’s services has gone up but it still needs to increase its
customer loyalty otherwise this could lead to a fall in customer preferences.
 Warid needs to improve in terms of network coverage and quality to be able to face the
tough competition of Mobilink and Telenor.

Strategic Outcome:
 Due to low need and low spending the usage of prepaid sector for Warid is quite low.
This has resulted in low revenue and low profitability for the company.
 Majority of the population is financially constrained so they keep their usage to a
minimum. Also the trend of keeping additional SIMs exists where people buy SIMs but
do not use them.
 ARPU for prepaid is very low from $ 2-2.5 as compared by industry to $ 2.41 and hence
the revenue generation for the company is very low due to low usage by prepaid users.
 Stiff competition from Mobilink, Telenor, Ufone and China Mobile has led to serious
reductions in prices. Profit after taxes has gone into negative showing that company is
incurring losses starting from FY2007-08 the negative trend continues and further
doubles in FY2008-09.

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 Network Quality

Tariff
Brand Name

Coverage

COMPETITIVE PROFILE MATRIX

Warid Ufone Telenor Mobilink

Critical
Success Weight Weight Weight Weight
Factor Rating Rating Rating Rating
Weight Score Score Score Score

Connectivity 0.05 7 5 0.25 7 0.35 7.5 0.375

Investment 0.3 6 2 0.6 6 1.8 8 2.4

Rates 0.1 8 5 0.5 7 0.7 4 0.4

Technology 0.05 6 3 0.15 5 0.25 6.5 0.325

Market
0.1 4 6 0.6 6 0.6 7 0.7
Share

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 Customer
0.2 5 4 0.8 3 0.6 5 1
Care
Value Added
0.1 5 2 0.2 6 0.6 7.5 0.75
Services
Sound
0.1 6 4 0.4 5 0.5 7 0.7
Clarity

TOTAL 1 /10 5.75 /10 3.5 /10 5.4 /10 6.65

ANALYSIS:

 The rating depicts a surprising position that though Warid is achieving second highest
rating of 5.75 which is 0.9 points less then Mobilink. Warid has overall 4th postion in
term of market share and from last two years there has been drop in its market share from
18.9% to 17.1%. The results shown by CPM are based on the quality of networks service.

 Warid (5.75) is a better position than Ufone (3.5) and Telenor (5.4).

 Warid still need improvements in terms of market share because it is where it lacks way
behind the market leader Mobilink. Needs to focus on prepaid market which caters the
masses to improve its market share.

 Warid should also bring in more investments and latest technology which will help in
gaining a competitive edge over its competitors.

Strategic Outcome:

 Huge competitions exist in the industry where all operators are close to each other. Due
to this perfect competition there has been a huge cut in tariff and improvement in quality
of services provided led to price wars and new and exciting packages. This stiff
competition will result in more investments and innovations in order to gain a
competitive advantage over competitors to achieve more penetration in the untapped
market of rural areas of Baluchistan and Khyber Pukhtunkuwa.

CORE VALUES

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Core values of a company define its organizational culture, which governs the conduct of all its
employees.

Warid Telecom’s core brand values include:

QUALITY – Warid has the best network in terms of quality on technical parameters and is also
the best network service provider.

SIMPLICITY - Warid differentiates itself from its rivals through the simplicity of its packages
with no hidden costs.

CUSTOMER FRIENDLINESS – Warid believes in building long term relationship with its
customers and providing a pleasant working environment for its employees.

INNOVATION – Warid is committed to providing superior levels of professional services to all

its customers- before, during and after the deployment of it leading solutions.

TRANSPARENCY – Warid has always been open and honest. They say what they do and do
what they say.

CORE COMPETENCIES
Ericsson Network

Warid is currently working with world’s renowned network vendor, Ericsson. More recently
Warid also started working with Huawei on the radio side of the network, although Ericsson
remains its core vendor. Due to the availability of this reliable network, voice clarity and call
connectivity is guaranteed, unlike in other connections. Call doesn’t get dropped, in turn saving
the customer money, which they might lose if they opt for some other connection.

Warid has pioneered in key technologies, which include the following:

 Custom-made network for Pakistan’s environment.
 Congestion-free connectivity in all coverage areas.
 Fully redundant network.
 Robust design catering to future needs.
 Future professional network (EDGE compatible and 3G upgraded with soft switch
and media gateway architecture).
 State of the art IP base contact centre and leading data centre.
 Launch of WiMax services across Pakistan by the end of 2005 with revolutionary
3.5 Ghz broadband solution.

It has definitely helped Warid and benefited them, because it helped them concentrate on their core
business of selling airtime, not running the network.

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Financial backing by one of the largest business group in the Middle east

Warid Telecom is a joint venture between Abu Dhabi Group & SingTel Group. Abu Dhabi
Group entered into a strategic alliance with Singapore Telecom. Subsequent to this transaction in
July 2007, telecom giant SingTel acquired 30% percent equity stake in Warid Telecom, Pakistan,
for US$758 million. This partnership is part of a strategy to support Warid Telecom’s continued
growth and to enhance its market position.

Abu Dhabi Group, one of the largest business groups in the Middle East and the single largest
foreign investor in Pakistan. It has diversified business interests, offering strong financial
resources and extensive management expertise that result in commercial success for several
institutions.

Transparent and Efficient Billing

Another major core competency of Warid Telecom is their crystal clear billing. Prior to
launching its network back in May 2005, the directors of Warid researched the Pakistani market
and found that there were “a lot of complex post-paid packages” in the market and it was
difficult for end-users to differentiate between them.

They have state-of-the-art billing software technology called Elixir powered by Opus software. It
builds end-to-end solutions that manage their business documents. This software operates 24 x 7
and the entire process from recording of bills to dispatching of bills is done through one
automated system which reduces the room for error.

Many times there are hidden charges (like Mobilink’s interconnect charges which are not
mentioned in the tariff structure) and what you see is not what you actually get, so what Warid
decided upon was quality and simplicity. These are the core values of Warid.

Based on that Warid made it very simple and developed simple packages and there were no
hidden costs. That helped Warid a lot.

STRATEGIC INTENT
 To provide premium quality service.

 To acquire the largest post-paid subscriber base in Pakistan.

 To maintain a healthy bottom line along with continuous growth.

 To gain a competitive advantage on value added services

KEY ISSUES
1. Weak marketing

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A very important issue that Warid Telecom faces is its weak marketing tactics. This has been
an issue because Warid has mainly worked on post-paid since its launch in 2005. Its focus
was mainly on promotion of its post-paid connections from 2005-2008. It started focusing on
pre-paid connections from the year 2008. However, its main focus still remains to be its post-
paid connections.

They have finally realized that in order to move up in the rankings, they need to start
focusing on marketing and promoting their pre-paid connections. Marketing and promotion
of post-paid connections is entirely different from that of post-paid connections. Warid
Telecom has corporate teams working for post-paid connections. This team includes Sales
Officers and Team Leaders. Marketing and promotion of pre-paid connection requires more
air time for TV ads, radio commercials, flyers, banners, brand activities. Warid Telecom has
lacked in these areas ever since its launch. Therefore, it is essential for them to work on these
marketing and promotional activities to move up in the rankings.

2. Primary focus on post-paid

Warid Telecom’s primary focus is on promoting their post-paid connections rather than pre-
paid. According to them, since Warid Telecom’s launch in the year 2005, it has worked on
post-paid connections. Due to their high quality network coverage and voice clarity, they
have managed to get big corporate accounts like MERCK, LUCKY CEMENT, SAMAA TV,
EXPRESS NEWS, CUPOLA etc. These are just a few names.

The reasons they gave for not focusing on pre-paid was that, firstly the number of
active/inactive sim-cards is unknown in pre-paid. Secondly, in order to keep the sim active,
company has to pay some amount, therefore focusing on pre-paid is not feasible.However,
the market Warid is competing in is mainly focusing on pre-paid connections (targeting the
masses). This issue can be one of the reasons as to why Warid is ranked 4 th out of the 5
market players despite of its remarkable network quality.

3. Low Network Coverage

Warid Telecom has very low network coverage in Pakistan. It falls behind Mobilink and
Telenor in terms of coverage. If coverage is not increased, Warid might face a fall in
customer preferences and number of subscribers. As low rates is no more a competitive
advantage so if Warid will not capitalize on factors like coverage, it might face a fall in
customer preferences for Warid’s services.

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2
 Issue Number Issue 1 Issue 2 Issue 3

Issue Name Weak Marketing Primary focus on post-paid Low Network Coverage

++ +
Customers
+ ++
Market segments
+
Needs/wants/applications

Products (prices)/services +

+ +
Strategic Management

+ +
Product Creation Process
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Sales Acquisition Process
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Customer base Management
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Technology
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Plant & Equipment
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Money
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People
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Information

Organization Structure

Procedures

Culture

STRATEGIC DIRECTION

 Ensure customer satisfaction by 95%.

 Become the market leader for quality (in terms of coverage and call clarity) in Pakistan.
 Accelerate tele-density and penetration through:
 Educating customers;
 Ensuring availability and affordability.
 Building an organization that provides great value for its stakeholders.

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  Providing joint training facilities with international affiliates to enhance technical skills of the
employees.
 Enriching the life of customers by providing innovative products & services and a unique
customer experience.
 Implementing the strategies proposed by the top management throughout the organization.

MARKET SEGMENTATION AND POSITIONING

Market Segment Today Future 4 years Existing Profitability %

Estimate Products

Youth Segment 35% 40% Glow 27%

Financially 20% 10% Zem Prepaid 15%

Constraint

Corporate/ SME 45% 50% Warid 58%

Postpaid

Analysis:
 Warid is targeting three segments:
 Youth segment
 Financially constraint
 Corporate / SME clients
 With about 35% of the country under the age of 15, the youth sector looks set to increasingly
influence the country’s mobile operators. Applications that bring websites such as Facebook to
mobile devices, video downloads and ring back tones are proving particularly popular among this
group.
 On the other hand Warid Postpaid is serving the corporate sector and its share is around 45%
today.
 Warid Telecom has the second biggest post-paid subscriber base in the country (1 st is Mobilink).

Strategic Outcome:

 Warid is not emphasizing enough on the youth segment. This is relatively a high
competition segment and serving it properly can lead to an increase in Warid’s market
share which currently stands at 17.07%.

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  Warid’s main focus is on selling post-paid connections. Selling postpaid will yield them
more profit then selling pre-paid connections (because post-paid segment targeted
towards corporate/SME has a higher ARPU then pre-paid segment), but this will not help
them in improving their market share as the masses go for pre-paid connections.

COMPANY’S POSITION AGAINST COMPETITORS

Parameters Mobilink Warid

Product Life Cycle Towards Maturity with Growth at decreasing rate

growth at decreasing rate

Market Share % 32.47% 17.07%

Coverage 1100 cities 550 cities

Product Portfolio Jazz Octane, Jazz Budget, Zem Prepaid, Glow, Warid Postpaid

Indigo, Ladies First

Customer Base 33.2 million 17 million

Marketing Operations Good Below Average

Analysis:
 Comparing Warid with the market leader (Mobilink) we can see that Warid is still in the
iniatial growth stage, while Mobilink is moving towards maturity. As Warids main focus
is on post-paid, its main competitor is the market leader, Mobilink.
 Warid should still try to increase its market share which is 17.07% at present because
Mobilink has almost a double market share (32.47%) when compared to Warid’s. This
improvement is required (by providing better value added services, tariff and coverage)
for Warid to sustain a competitive position. Warid also needs to work on its marketing
operations.
 Warid’s customer base (17 million) is almost half of that of Mobilink (33.2 million)
which could become a problem for Warid if this base is not improved by improving its
customer loyalty.

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 Strategic Outcome:

 Warid ranks fourth out of the five players in the cellular industry. As per market share,
Warid ranks 4th out of the 5 players with a mere market share of 17.07%. This will result
in lower revenues for Warid.
 Warid also has a problem of low coverage if compared with Mobilink. As low rates is no
more a competitive advantage so if Warid will not capitalize on factors like coverage, it
might face a fall in customer preferences for Warid’s services.
 Warid is also facing the problem of lower customer base. If high competition segments
like “Youth” are not served properly, Warid (due to solid competition in pre-paid
connections segment) will find it very difficult to increase its customer base.

PROPOSED ACTION PLAN

PRICING

WHAT HOW WHO WHEN

To gain Lowest per 60 Top As soon as

market share second rate of Management possible.
of 35% by Rs. 1.80.
providing
lowest off-
network call
rates in both
postpaid and

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 prepaid
segment.

REVENUE

WHAT HOW WHO WHEN

Increasing By extending the Warid Telecom In near future

Average services to remote
Revenue per and rural areas of
User (ARPU) Pakistan which
includes 39.6% of
the total Pakistani
population that has
not been penetrated
yet.

As the subscriber
base will increase
with the
introduction of
above mentioned
off-net package, the
ARPU will increase
from $2-2.5 to $3.5.

NETWORK COVERAGE

WHAT HOW WHO WHEN

Expand its By addition of Warid Within a time

coverage to approximately 250 Telecom span of 1 year.
remote and more locations to
rural areas: Warid Telecom’s
Northern Areas coverage network.
(NA), Azad
Jammu &
Kashmir (AJK)
and
Baluchistan.

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OPERATIONS

WHAT HOW WHO WHEN

Sharing of Sharing Warid, Telenor, Within a

Infrastructure infrastructure and Mobilink, Ufone, time span
space with other China Mobile of 2 years.
mobile operators.

A MoU has already

been signed by the
telecom players,
according to which
the sharing ratio of
cell sites is 1:0.2 i.e.
out of every 100 cell
sites, 2 are shared.
However, we
propose that the
ratio shoulb be
improved to 15 out
of every 100 in turn
reducing the fixed
investment.

SEGMENTATION

WHAT HOW WHO WHEN

Catering to the By offering more Warid Telecom As soon as

youth segment, attractive packages possible
this comprises and rates keeping in
around 35% of mind the unique
the total needs of the youth.
Pakistani

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 population.

MARKET SHARE

WHAT HOW WHO WHEN

Improving the By targeting the Warid Telecom In near

current market untapped rural future
share which market and remote
currently is areas (NWFP,
17.07%. Baluchistan & AJK)
of Pakistan and
increasing the
number of cell sites
in these remote and
rural areas.

MISSION STATEMENT

"To be the leading national communication provider with a strong international presence."

VISION
Warid Telecom's brand values include:

QUALITY – Warid has the best network in terms of quality on technical parameters and is also
the best network service provider.

SIMPLICITY - Warid differentiates itself from its rivals through the simplicity of its packages
with no hidden costs.

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CUSTOMER FRIENDLINESS – Warid believes in building long term relationship with its
customers and providing a pleasant working environment for its employees.

INNOVATION – Warid is committed to providing superior levels of professional services to all

its customers- before, during and after the deployment of it leading solutions.

TRANSPARENCY – Warid has always been open and honest. They say what they do and do
what they say.

BUSINESS OBJECTIVES

 To become the price leader in the market.

 Promote infrastructure development.

 Increase private investment through increased revenues.

 Encourage fair competition.

 Maintain consistency with Pakistan’s IT and Internet promotion.
 An effective & well defined regulatory regime, consistent with international best
practices.
 Increase its market share in terms of subscribers up to 35%.

Objectives 2010 2015

ARPU (Prepaid)  $2 to $2.5  $4.5 to $5

ARPU (Postpaid) $12 to $14 $15 to $17

Combined ARPU $3.5 $5

Market Share in terms of 17.07% 35%-40%

Subscribers

Market Share in terms of 13% 25%

Revenue

Unprompted Brand Awareness 35% 65%

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Analysis:

 Currently Warid Telecom has an Average Revenue per User of $2.5 (prepaid) which it is
aiming to increase to around $5 by 2015 mainly by improving coverage and tariff
structure. Pakistan’s economy is dominated by low ARPU users so the competition is
fiercer in the prepaid segment. Therefore, due to high ARPU on postpaid connections,
Warid’s main focus is on selling postpaid connections. It is due to the postpaid segment
that Warid’s combined ARPU has increased from $2.5 to $3.5 in two years.

 Its market share is 17.07% and by 2015 it will hopefully be around 35% to 40% which
can be achieved by attracting more customers by providing better services and packages.

 In terms of revenue Warid’s share is 14.7% and company’s forecast is about 25% by
2015.

 Warid’s unprompted brand awareness is also about 35% and the company is aiming
about 65% by 2015 because Warid is a well known brand and people are aware of its
services.

Strategic Outcome:

 Extend the services to rural areas and improve the Grade of service. Warid will hopefully
be able to achieve its objective of getting a combined ARPU of about $5 by 2015.

 Target the unsaturated markets of NWFP and Baluchistan which currently have only 6.9
million and 1.6 million subscribers respectively. Warid will hopefully be able to get close
to its objective of attaining the market share close to 35%.