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 Introduction

ABOUT ZONG
Zong is the first International brand of China Mobile being launched in Pakistan. The company is often
cited as China Mobile (Pakistan). It is meant to empower and liberate the people of Pakistan in every
nook and corner of the country. It will become a part of their hearts, their minds and bring about a change
in their lives that every one desired but few thought would be possible. The core essence of ZONG is to
allow people to communicate at will. Without worrying about tariffs, network coverage, capacity issues
or congestion. ZONG will be supported by ground breaking communications, trend setting customer
service and an unmatched product offering which will redefine rules of the game and establish ZONG as
a serious contender for the number one spot. ZONG would offer its customers with entertaining &
innovative value added services and will empower them by giving a wide variety of products, services &
content to choose from. We are privileged to be the pioneering country introducing this brand with others
to follow. And God willing, together we will also make ZONG a success story for others to try and
replicate.

ABOUT China Mobile Pakistan (CMPak)

China Mobile Pakistan (CMPak) is a 100% subsidiary of China Mobile. The pioneering overseas set up of
China Mobile came through acquisition of a license from Millicom to operate a GSM network in
Pakistan.

So far CMPak has invested more than US$ 700 million in the telecom sector in Pakistan and an additional
US$ 800 million will be invested in future year.

With ambitious plans to cater to the fastest growing Pakistani market and to win over the ever demanding
Pakistani customer, it will be offering unprecedented coverage, voice and data services as well as a wide
range of tariff options to choose from.

CMPak's edge comes from the experience and expertise of running the world's largest telecom service
and the commitment they make to setting quality and customer relations standards.
CMPak is geared to offer neatly packaged VAS products that will benefit the individuals, corporate as
well as small businesses. Led by a team of professionals from the field of cellular

Communication, CMPak is determined to make its mark in the Pakistani market and to change the way
people communicate.
 Five Forces Porter Model

Five forces looks at five key areas namely threat of new entry, power of buyers, power of suppliers, threat
of substitutes, and competitive rivalry.

Threat of New Entry

• As government of Pakistan is showing liberalism in case of telecommunication sector and opened its
policies to award new licensees to new mobile service providers so threat of new entry is high.

• As set-up cost is in billions of dollars so in this case threat of new entry is low, but there are companies
who are working to achieve licenses and approaching PTA to know terms and conditions for this.

• As for this business companies need a well established distributions and franchises network so threat of
new entrant is high in this case.

Bargaining Power of Buyers

• Power of buyer is high in telecommunication sector. There are six market players and players are
offering different packages at different prices and a situation of price war is running. Buyers have a power
to buy any package which is suited to them.

• Cost of switching from one company package to other company package is low. Hence, power of buyers
is high.
Bargaining Power of Suppliers
• The power of suppliers is low in case of telecommunication sector.

• But the fact is that numbers of suppliers are few in the market but they are competing in the market to
make agreements with mobile service providers.

Threat of Substitute Products

• Government also gave so many land lines and wireless local loop licenses to different companies like
PTCL wireless local loop, GO CDMA, WORLD CALL etc. these services in future will be like mobile
phone services like they are planning to offer services a lot but currently they are offering SMS and CLI
services to their customers.

Rivalry among Competing Firms in Industry

• Currently there are six market players but in future they will be eight and nine or even more.

• Thuraya satellite service is offering subscribers freedom of mobility and uninterrupted

service.  Thuraya's satellite technology supplements of existing mobile service providers, overcoming the
challenges of large geographical areas and insurmountable terrain.

Competitive Analysis
Major competitors of ZONG include
Mobilink

Ufone

Telenor

Warid

Mobilink
Pakistan Mobile Communications Limited, better known as Mobilink GSM, is a telecommunication
service provider in Pakistan. According to PTA statistics, Mobilink has 30.88 million customers by
January 2008. Mobilink's Head office is located in Kulsum Plaza, Blue Area, and Islamabad.

Mobilink started operations in 1994 as the first GSM cellular Mobile service in Pakistan by MOTOROLA
Inc, later it was sold to Orascom, an Egypt-based multi-national company. Mobilink's corporate postpaid
package is sold under the brand name "Indigo" and prepaid by the name of "Jazz".

Mobilink is the largest cellular service provider in Pakistan

Ufone

Ufone GSM is a Pakistani GSM cellular service provider. It is one of six GSM Mobile companies in
Pakistan and is a subsidiary of Pakistan Telecommunication Company.

The company 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.

During the year, as a consequence of PTCL’s privatization, 26% of its shares were acquired by Emirates
Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone has also been
handed over to Etisalat. During the year July 2005 to June 2006, Ufone continued on the path to success.
The Company further expanded its coverage and has added new cities and highways. Ufone has network
coverage in more than 750 cities, towns and across all major highways of the country.

Warid

Warid Telecom International is an Abu Dhabi based mobile telecommunication firm providing
telephony services in Bangladesh, Pakistan and Uganda.

Warid is expected to launch in Congo soon.

In December 2005, Warid Telecom International LLC obtained a 15 year GSM license to operate as the
sixth mobile phone operator in Bangladesh for 50 million US dollars.

Warid Bangladesh launched their operations on the 10th of May, 2007 and uses the code 16 proceeded by
the code number of Bangladesh +880. Warid Bangladesh has acquired a million subscribers within 70
days of launch.

The company started rolling out network from mid-2006. In less than a year, amidst much speculation,
Warid Bangladesh launched their commercial operation with 26 districts – the largest ever launch in
terms of network coverage and BTS Stations. Unlike its operations in other countries Warid Bangladesh
uses the slogan be heard instead of we care.
Currently Warid Bangladesh provides both post-paid and pre-paid connection plans. The post-paid plan is
branded and marketed across the country under the name Zahi Post-paid, which means leader or royalty.
The pre-paid segment is branded and marketed and ZEM PREPAID According to Pakistan
Telecommunication Authority, currently Warid Telecom has more than 10 millions subscribers in
Pakistan and is ranked as the fourth largest operator in Pakistan. Warid Pakistan claims it has the largest
"post-paid" subscriber base in Pakistan.

Telenor

(OSE: TEL, NASDAQ: TELN) is the incumbent telecommunications company in Norway, with

headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an international wireless carrier
with operations in Scandinavia, Eastern Europe and Asia. In addition, it has extensive broadband and TV
distribution operations in four Nordic Countries.
At year-end 2005, Telenor held controlling interests in mobile operations in Norway, Denmark, Sweden,
Ukraine, Hungary, Montenegro, Thailand, Malaysia, Bangladesh and Pakistan. In October 2006, Telenor
entered into an agreement with Vodafone Group for the acquisition of subsidiary Vodafone Sweden for a
consideration of NOK 8,170 million, including assumption of debt.

Telenor Pakistan is a wholly owned subsidiary that started operations on the 15th of March 2005 and
holds one of six mobile licenses in Pakistan. It’s also the fastest growing cellular network of Pakistan.
Currently Telenor holds the second largest GSM and the largest GPRS and EDGE coverage in Pakistan. It
has also achieved the second largest retailer network in Pakistan within the 2 years of its operations and it
has started operations in Azad Kashmir and the Northern Areas of Pakistan. Telenor has reached its
breakeven in the first quarter of 2007 and beat largest mobile operator Mobilink in sales. Telenor
proactively participated in earthquake disaster relief, and is carrying out a campaign for the welfare of
flood victims in Balochistan. Current CEO of Telenor Pakistan is Tore Johnsen.
 Mobilink 31.6%

Warid 18.8%

Telenor 21.6%

Ufone 21.5%

Zong 6.1%

Cellular Service Providers of Pakistan

Cellular Service Provider Market Share

Mobilink 31.6%
Ufone 21.5%
Telenor 21.6%
Warid 18.8%
Zong 6.1%

External Assessment:
PEST Analysis of Pakistan in Telecom Industry
In order to survive and remain profitable in today’s competitive marketplace, Zong need to be
able to react and adapt to changes in the external environment and ideally be proactive in
impacting these forces. External environment factors can be classified into five general
categories: competitive, social/cultural, legal, economic, political, and technological.

Political Factors

Political Instability:
Pakistan is facing political instability causing danger for the telecom industry. But the
political factor does not effect on Zong so high because Zong related from china and
relationship of china and Pakistan is very strong.

Deregulation:
The telecom sector of Pakistan has successfully liberalized in an efficient, transparent and
fastest deregulation of telecom in the region. The Government of Pakistan gave the status
of Industry to Pakistan Telecommunication Sector.

Changes in Tax Laws:

Tax rates have been increased day by day government tax rate of call is 15% and
recently government increased it by 6 % more.

Economic Factors:
Gross Domestic Product:
Telecom sector of Pakistan has a share of almost 2 percent in National GDP.

Average Revenue per User (ARPU):

The average revenue per user is falling. It does not affect value able on Zong. Because
Zong started in same condition.

Decline in Money Value:

 The decline in Rupee value against the US Dollar, the decrease in the interconnect
charges and lower priced tariffs have resulted in an overall decrease of ARPU in US
Dollar terms.

Outflow of Capital:
The ongoing economic turmoil along with the worsening of security conditions in
Pakistan has caused an increased outflow of capital from the country.

Technological Factors:

Technological Development:
Companies are investing in their infrastructure to not only expand but also to upgrade
their existing structure. As the competition is strong Zong is focusing on its value added
services
Technological Advancement:
Currently all companies are providing Multi-media Messaging Services (MMS), General
Packet Radio Service (GPRS), Virtual Private Network (VPN), Pocket Stocks,
Conference Calling, Wallpapers Animated pictures Polyphonic ring tones (WAP), and
Voice Mail at low price.
Technological Trends:
The well-recognized technology trends that are influencing the evolution of the network indicate
that:
o The cost of a call is becoming even more insensitive to the distance;
o The modularity of the network is increasing;
o The networking is shifting from circuit-switched to packet-routing;
o The voice communication is now independent of the network;
o The geographic boundaries are irrelevant for emerging technology;
o The intelligence and function are moving away from the central office.

In these conditions competition is very strong among competitors. Zong is improving itself in
technology.

MISSION
 “To be the leading mobile operator of Pakistan by continuously
innovating and offering exceptional quality services to be good
corporate citizen and envoy of friendship between china and Pakistan
core value. Responsibility makes perfection”.

Corporate Philosophy

The core concepts of the Company’s corporate culture are “Responsibility” and “Pre- eminence”,

meaning that the Company shall “Enrich the Public’s Livelihood” by its “Noble Virtues”. To that end,

the Company is committed to being a benevolent, responsible and outstanding corporate citizen who

never ceases in its efforts in making improvements. Based on the understanding of their triple-sided

responsibilities, namely their economic responsibility to grow, their responsibility to the society and

their responsibility to the environment, China Mobile Limited’s vision of responsibility is as follows:

“With perfect sincerity and integrity, they will strive to fulfill their triple-sided responsibilities: their
economic responsibility, their social responsibility and their environmental responsibility.”

The Company will keep its commitment to being an outstanding corporate citizen and will fulfill its
promises with utmost integrity, and it will continue its efforts in innovation and pursue ever greater
perfection without resting on its laurels in order to achieve the harmonious development of the
Company, the society and the environment.

The starting-off point of the Company’s vision of responsibility is “acting in good faith”, which bears the
two-fold meaning of "sincerity" and "integrity" in ancient Chinese culture. “Sincerity” is the starting-off
point and driving force behind the continuous efforts of the Company in fulfilling its responsibilities and
“integrity” is the norm and basic standards for the fulfillment of their responsibilities.
“Economic responsibility”- the Company will pursue harmonious development for itself and will secure
its own sustainable development through credible and responsible economic activities. To this end, the
Company will demonstrate all its strengths, continue its efforts in innovation and pursue ever greater
perfection.

“Social responsibility”- the Company will pursue the harmonious development of the society and, whilst
pursuing its own excellence, the Company will strive to achieve synergy with the development of the
society with a view to make progression towards the sustainable development of the human society.

“Environmental responsibility”- the Company will pursue the harmonious development of the
environment. To this end, the Company will endeavor to protect the natural environment by reducing its
consumption of resources and the impact of its operation on the environment.

Code of Business Principle

CMPak activities should serve to illustrate that business success in demanding markets can be achieved
without compromising ethical principles or international norms. Their Codes of Conduct have been
adopted by the CMPak’s Board and are a key management tool for influencing all their activities. The
Codes of Conduct cover areas that are important for ensuring solid business ethics in all aspects of their
activities. They contain specific and practical rules, and set the standards for how individual employees
should conduct business when faced with competition and demands for meeting business objectives.
Failure to comply with the Codes of Conduct results in sanctions suited to fit the nature and extent of
unauthorized actions. The Codes of Conduct apply to managers, employees, hired staff and anyone
acting on behalf of CMPak.

Organizational Structure

Qian Li CEO
Zafar Usmani COO
Xin Jie Chief Financial Officer
Sajid Mehmood CIO
Babar Bajwa Director COPS
Salman Wassay Director Marketing
Tehmina Khalid Manager Revenue Assurance
Cyrus Sikandar Head of O & M
Wajid Ali Head of NP & S

 Organizational Hierarchy
Departments:

Geographic Distribution

CMPak is divided into four regions of Pakistan. Every region has its own Regional Managers for sales.

Region 1 (North-I)
Region 1 is Islamabad. Islamabad is the headquarter of CMPak. All the higher management resides there.
Peshawar location is also controlled by this region.

Region 2 (Central-I)
Region 2 is Lahore. In Lahore there are two offices the main office is IN New Garden Town where I did
my internship and the other one is on Main Boulevard D.H.A. Marketing, sales, and HR department

resides in this region also. Locations like Shiekhupura etc are controlled by this region.

Region 3 (Central-Ii)
Region 3 is Faisalabad. Faisalabad has its own zonal and assistant manager sales and sales force.

Region 4 (South -I)

Region 3 is Karachi. Karachi has its own zonal and assistant manager sales and sales force. Hyderabad
and Balochistan location are also controlled by this region.

Structural Dimensions
Formalization
Formalization is the degree to which the jobs within the organization are standardized. Job are
standardizes in CMPak. Document exists for every activity. Like in sales promotion activities a complete

proposal has to be made in order to get approval on that proposal.

Specialization
Specialization is the degree to which organizational tasks are subdivided into separate jobs. Different
department exist in CMPak which refers to specialization. There are separate departments for Human
Resources, Marketing, Sales, Finance, and Engineering etc. Every department is concerned with his
assigned task.

Human Resource Management

Equal Opportunities for Development

China Mobile strictly complies with the relevant laws and regulations of the place where it is located as
well as the industry code of conduct during the employment relationship. In no event shall child labor be

employed in any position. Forced labor and work place discrimination shall be avoided. China Mobile
upholds the principle of gender equality and adopts an equal employment opportunity policy. China

Mobile attaches great significance to the career development of female employees. In 2001, China Mobile
sets up the protection of female employees’ rights association on a national basis. Contribution from the

female employees to enterprise development and to society has been widely recognized. A number of
female employees were commended by the state for their outstanding performance.

Caring for Employees’ Health and Safety

China Mobile has reinforced safety and has enhanced workplace safety measures to create a safe work
environment. It also places emphasis on increasing employees’ awareness of workplace health and
safety such as carrying out fire drills. Additional precautionary tools and gears have been given to
outdoor construction workers working at height, working at power supply facilities, working under
inclement weather conditions and working in dangerous terrain. In strict compliance with the relevant
regulations, China Mobile takes out occupational injury insurance so that employees who suffer from
workplace injury or occupational diseases are guaranteed to receive medical assistance and economic
compensation.

Focus on Employees’ Career Development

The Company has set up a comprehensive performance based incentive scheme and reward mechanism.
China Mobile values the career path planning of employees of different positions. In order to promote
employees’ career development, direct supervisors are required to conduct face to face meetings with
their staff regularly relating to job duties and work performance during which employees can express
their views and make suggestions for improvement. China Mobile is committed to building a learning
organization and continuous efforts have been made to enhance its training. China Mobile
Communication University was established to provide training to each level of China Mobile’s
employees. Course instructors include internal specialists and external specialists and professors from
tertiary institutions such as Tsinghua University, Beijing University and Renmin University of China.
China Mobile takes the initiative to establish an e-learning system which is now operated on a trial basis
at the headquarters and five subsidiaries. There were 17 online courses which increased to 111 by the
end of 2006. There are a wide range of courses covering areas such as enterprise strategy management,
business administration, human resources management and financial management. China Mobile
introduced and implemented an effective secondment program to promote staff mobility. All
outstanding employees within the group are eligible for secondment to the headquarters or other

subsidiaries of the group for a period of several months up to a year. Through continuous efforts, China
Mobile now maintains a stable workforce and has seen significant enhancement in its staff quality.
These are key factors for a rapid and healthy development of an enterprise.

Internal Communication

Communication is normally done through top to bottom as the planning is done by higher management.
But if someone has any kind of issues then bottom up communication is also allowed. Also for sales force
the communication is normally bottom up. The sales force will communicate certain issues to the
management which will then be discussed by higher management.

Leading
Group and Teams

The organization follows a hierarchy for individuals only the sales department has teams. In sales

department there are 6 Assistant and zonal managers. Excluding the corporate manager sales the rest 5
managers have their own teams comprising of Rso’s and Dso’s. The managers put a strong check on the

teams and evaluate their performance on almost daily basis. The managers have further divided the
teams in sub teams like a manager has assigned different areas so he can make teams for every assigned
area and can evaluate the performance

Motivational Techniques
Marketing and sales are two important department of the organization who needs to be motivated more

than other employees because they lead the organization to success or failure. Same is the case with
CMPak. CMPak uses several techniques to motivate the sales department employees.

Manager of the Week

Organization declares manager of the week on the basis of direct SIM activations. To be manager of the
week the manager struggle hard and make the team to work hard.

Commission Base Compensation

The sales force is given commission on achieving sales targets besides their basic salary.

Employees’ Protection & Rights

Equal Opportunities for Development

China Mobile strictly complies with the relevant laws and regulations of the place where it is located as

well as the industry code of conduct during the employment relationship. In no event shall child labor be
employed in any position. Forced labor and work place discrimination shall be avoided. China Mobile

upholds the principle of gender equality and adopts an equal employment opportunity policy. China
Mobile attaches great significance to the career development of female employees. In 2001, China Mobile

sets up the protection of female employees’ rights association on a national basis. Contribution from the
female employees to enterprise development and to society has been widely recognized. A number of

female employees were commended by the state for their outstanding performance .

Caring for Employees’ Health and Safety

China Mobile has reinforced safety and has enhanced workplace safety measures to create a safe work
environment. It also places emphasis on increasing employees’ awareness of workplace health and
safety such as carrying out fire drills. Additional precautionary tools and gears have been given to
outdoor construction workers working at height, working at power supply facilities, working under
inclement weather conditions and working in dangerous terrain. In strict compliance with the relevant
regulations, China Mobile takes out occupational injury insurance so that employees who suffer from
workplace injury or occupational diseases are guaranteed to receive medical assistance and economic
compensation.

Control Measures and Leadership

Controlling

Managers and above have the controlling authorities in CMPak. A manager can control his sales force
using any means being lenient with them and even harsh sometimes. Every higher authority can control
the subordinates.

Controlling Against Fraud and Illegal Actions

Sales managers try to control the fraud and illegal actions by compelling the sales force to have the copy

of N.I.C of each customer to which they sell a connection. Then a complete form is filled by the sales
officer with customer details and then submitted to record office of organization

Leadership

Leadership Style of Managers

There is no specific leadership style the managers follow. Sometimes they are dictators, some times
democratic and even laisez-Fair. Regional manager and head of sales was more likely laisez-fair and
sometimes democratic. They never used to be dictator