Research and Market, the world’s largest market research resource have recently published forecast reports of next five years for mobile operators of Pakistan and other countries. The key points of the report as mentioned in its summary give a very interesting picture of the state of telecom industry in Pakistan.
Zumbeel played a wonderful part to get top notch telecom industry professionals to speak on trending technology topics at their event ‘Are You Online’.
One of them was Mr.Ahmer Arsalan, Customer Solution Manager from NSN (Pakistan and Middle East). He has worked as a subject matter expert for network planning and also on various projects mainly Greenfield networks and 3G/HSPA in Europe, UK, Middle East and Africa. He delivered a presentation on the most heated topic in our telecom industry, ‘3G and Pakistan’, calling it Pakis3Gstan.
SWOT analysis stands for analyzing the Strengths, Weaknesses, Opportunities and Threats of a certain industry or company. In this post we do the SWOT analysis of the Telecom Industry of Pakistan. In upcoming posts we will go in detail of individual companies and discuss the problems and how to make use of the opportunities.
Strengths
Weaknesses
Opportunities
Threats
References: State Of Telecom Industry in Pakistan and previous coverage of telecom industry on TelecomPk.Net.
Take a look at the summary of Telenor’s performance in Paksitan for the final quarter 2008. There are indications of some rebound after a dismal third quarter in 2008. Telenor thinks that part of the reason is increase in use of its fiber network. Revenue growed by 9% and the ARPU exhibited a small increase.
As economic downfall has hit almost every industry globally, telecom industry might also fall prey to it. However if not a total fall down to south, telecom industry will definitely suffer from recession. Curiosity to find out ways to survive this recession made me do some study on this and in doing so I came across a series of article on telephonyonline.com which effectively discusses it. The series is titled “Surviving the Recession” and it gives out ways for the service providers and vendors to not only survive but to strengthen their business.
I have tried my best to list down all possible ways relating them with the current market situation in Pakistan. In this post I have focused on factors that will help in overcoming recession in the urban markets.
Focus on broadband services
The recent emergence of broadband has gained significant popularity and it has successfully attracted consumers to spend money on it. To keep them hooked on, the service providers must try to offer better pricing and special retention offers e.g. waiving one month bill annually. Also the recent roll out of EVDO devices is a good move towards offering ‘naked’ broadband services i.e. broadband without landline.
The role PTA (Pakistan Telecommunication Authority) can play in this to strictly work on broadband enabling policies. It may also work along with the service providers to increase broadband awareness among the consumers who are convinced that dial-up is a cheaper option.
Focus on customer retention
Nothing could be worse right now than loosing a customer, so in order to retain current customers not only proactive strategies of introducing new plans and packages but also reactive customer service strategies have to be adapted. New plans and packages have been the zeal of our service provider but what they require is to improve on their customer service departments.
The CSRs must respond effectively to the problem faced by the customer and resolve it. They must be trained in customer retention and to increase brand loyalty. Also, the recent trend of charging customer service helpline call is not much appreciated by the customers especially pre-paid customers as they suffer most from it. Thinking practically, how would a person at zero credit make a helpline call to know about the balance share procedure?
Better web sites can help everyone as well. Make the sites usable. Make it easy to search for common terms. Don’t put fancy features (e.g. lot of flash) which can slow down the performance.
Don’t stop focusing on the growth
Focusing on retention is just not enough, providers must also come up with ways to increase subscriber numbers. The ARPU might not grow or may even fall but once you have subscribers in your grasp and when the recession is over you can think to sell new services.
Another important aspect of growth is proper marketing as it reminds the customer of value service providers can deliver. The current marketing trend of our service providers is unconvincing and merely meant to taunt at others. They should rely on long-term persuasive marketing as customers would then be keen to buy service if they are convinced of the value.
Have you noticed how mobile companies are trying to win back inactive subscribers? Telenor and Mobilink are two examples. I wrote about the Telenor sim lagao offer. Mobilink has a similar ongoing promotion called Apna Jazz Connection ON Karein. In the past Mobilink posted an unconditional Rs. 30 worth of balance for those who did not use Jazz connection for a few months. What is the detailed story behind these?
I came across this paper from McKinsey about segmentation and micro-targetting to increase ARPU and to win customers back. This paper includes a case study from South Asia but it does not name the company so it is anyone’s guess. There are 4 important points mentioned here:
Here’s a view (source: McKinsey Quarterly) of the different phases in the life cycle of a prepaid mobile subscriber.
Here’s the excerpt from the paper where it mentions a South Asian mobile operator:
One South Asian mobile operator gained more than $50 million in additional revenue by identifying and eliminating value-destroying promotions. The company appointed a team that used customer life-cycle management to test its range of offers against a control group to better understand the true impact of its marketing campaigns. One of the offers it eliminated as a result involved a flat rate for text messaging. Revenues then jumped, since customers, now accustomed to messaging, continued to use it even under the new pricing structure.
One major Asian mobile operator credited an extensive segmentation program and targeted promotions with reducing churn among its prepaid customers by 8 percent. What sparked these initiatives was the decline of revenue growth rates, over three years, to just under 5 percent, from levels as high as 30 percent—primarily as a result of the market’s growing maturity and increased competition. Promotions during that period, though popular, failed to generate significant revenue growth.
As a first step toward addressing the problem, the operator collected and analyzed its customers’ usage data: basic calling patterns, reload behavior, acceptance of promotions, and other life-cycle characteristics. (A wealth of information was already available in its systems but had never before been used in this way.) Next, the company divided subscribers into microsegments: groups of about 100,000 to 500,000 people who shared significant characteristics. (Operators targeting bigger groups risk making offers that aren’t clearly relevant.) The microsegments included groups of customers whose usage had dropped by 50 percent in the past month, who hadn’t reloaded their SIM cards in three months, or who had signed up for free text messages but stopped using the feature once the promotion expired.
Leave a comment if you are interested in the full report.
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