National TeleCom Limited (NTC) was incorporated in June 08, 2004 for the purpose of implementing, owning and operating a fixed line network in Bangladesh. NTC was awarded a PSTN license by BTRC, GoB to operate basic telephone services, data and broadband services in all over Bangladesh other than Dhaka the “Central Zone”. The license was granted for a period of 20 years and is renewable prior to expiry. The authorized capital of NTC is BDT 5,000.00 million divided into 50,000,000 ordinary shares of BDT 100 each.
1. Name of Company : National TeleCom Limited
2. Proposed Product Mix
Total Subscriber : 250,000 Subscribers
a) WLL Lines : 225,000 Subscribers
b) PSTN Lines : 25,000 Subscribers
c) DATA service : 2,500 Subscribers
3. Directors : Mr. Anisur Rahman Sinha
: Major (Retd.) Mohammad Jahangir
4. Project Location : All over Bangladesh.
5. Employment Potential : Total 350 Employees.
6. Total Project Cost : BDT 2,745 Million.
7. Plant and Machinery Cost
Imported : 1,207 Million
Local : 1,034 Million
Contingency : 28 Million
Others : 4 Million
Existing : 472 Million
8. Proposed mode of Finance
Promoters : 600 Million
Loans : 960 Million
Suppliers Credit : 1,185 Million
9. Debt-Equity Ratio : 78 : 22
10. Time Schedule for project
Implementation : 8 Months
11. Total Population Coverage : 20 Million (14.00%) of total population
12. Source of Customer/Service Users:
a) Subscribers (Voice, Data,Video on Demand)
b) Existing Voice Operators
c) Existing Data Service Providers
d) Video on Demand Operators
e) ISP Service Provider
f) Educational Institution
i) Other Organizations.
13. Annual sales Turnover
1st Year : 899 Million
2nd Year : 1,903 Million
3rd Year : 1,780 Million
4th Year : 1,780 Million
5th Year : 1,780 Million
14. Profitability ratios of Fifth year operation:
Gross profit to sales 94%
Operating profit to sales 64%
Income after tax to sales 42%
Dividend payout 54%
15. Pay Back Period: 2 years 3 Months
16. Economic Aspects:
The project will maintain job opportunity for 276 persons in different units. The telecommunication effect will change the socioeconomic condition of the country as a whole.
17. Financial Viability:
The project has found financial viability. The details are shown in the related chapter of the report.
The expected IRR (Internal Rate of Return) is 36%
19. Debt-Service Coverage Ratio:
The debt service coverage ratio of the project is expected to be at 1.14, 1.59, 5.24, and 5.58 for 2nd year, 3rd year, 4th year and 5th year respectively.
About National Telecom
The proposed project envisages setting up of a Telecommunication Network to provide Voice, Data and Video on Demand Service with Microwave, Fiber Optic and Copper operating Route Networks for 2.5 million within in next 8 years at North-East, North-West, South-West and South-East zone of Bangladesh.Out of total project the phase-I will be 250,000 lines. A profile of this effect has been prepared about the project design covering in details of its probable cost, profitability and other relevant aspects. The sponsors have gathered sufficient experience in this line and they are well qualified. It is expected that the expertise of the sponsors have already grown in successful operation of their present business and that will be the extra plus point for managing the company.
National Telecom’s primary corporate objectives are:
• To become the market leader in personal communications unified messaging
Products and services within five years.
• To become the lowest cost provider and drive an aggressive pricing model through the industry.
• To have the best and most responsive customer service by year-end 2008.
NationalPhone will provide 3G|4G Integrated Services like Voice, Data and Multimedia.
Total Subscribers : 2.5 million Lines.
Coverage Area : 4 Zones (NE, NW, SE, SW)
Network Type : IP based Next Generation Core Network with Access Layer1, Layer2, Layer3.
Network Category: Mixed Network (Wire line and Wireless).
The sponsors already formed a private limited company registered with the registrar of Joint Stock Company & Firms under the company’s act 1994. The authorized capital of the company is Tk 500.00 crore. The paid up capital is Tk 30.00 crore. In order to implement the project further capital of Tk 30.00 crore will be raised by the promoters to cover partial cost of the project.
There are around four private companies who are already in “Soft” operational stage in the market. By the time National Telecom gets to mass market, we can safely expect to get few more players in it. Thus National Telecom is unlike to get any advantage of being the first private operator in any major market places. The government telephone entity BTTB is already in most prominent places for many years. Therefore we can expect price warfare and a discriminating consumer market.
National Telecom now is going through inter-connectivity issues, AKtel and BTTB already signed interconnectivity papers with National Telecom. We are yet to sign with rest of the companies. Till couple of months ago, leading private companies like Rangs Tel or Bay Phones were not able to agree on the price schedule with the government owned monopoly. We can expect by the time National Telecom sits down with Grameen phone (The largest telephone company in Bangladesh) about inter-connectivity and price issue, there will likely to be a “Template/Benchmark” for National Telecom to follow which would likely to make the very essential inter-connectivity issue less complex.
There are four prominent mobile phone companies in the market who will compete with National Telecom at some levels. Since they started few years ago, they are likely to have the “High value customers” in the customer lists well ahead of National Telecom.
Another reality National Telecom has to be ready for while following a marketing strategy that it may not enjoy all around co-operations from private and national telephone carrier in future. Couple of months ago two national mobile carriers (Grameen and AKTEL) stopped interconnecting their customers for many hours. This sort of situation is a reality in Bangladesh.
OBJECTIVE OF THE REPORT
The study was limited to the following aspects of the project:
1. To assess the financial and technical viability of the project
2. To analyze the demand and prospect of such kind of project in Bangladesh
3. To conduct a financial evaluation and sensitivity analysis of the project.
4. To assess the socio-economic implications of the project.
5. To get an overall idea about the company.
6. To evaluate the particular project regarding the appraisal.
7. To identify limitation and express opinion about the updating for the economy
The report has been prepared with the following ways:
· The technical study has been done considering all technical aspects of the proposed project.
· The market study has been carried out based on data / information collected through field visits, discussion with prominent business personnel and related organizations.
· The financial and economic analysis has been done based on real data obtained from engineering estimation and professional judgments.
The major difficulty faced in carrying out the study was collection of data / information for estimation of demand and market prospect of such kind of project. But it has not been so much difficult because of kind help of different government and non-government organizations of the country. We have received a great help from Lucent, Motorola, Huawei, Nokia, UT StarCom, Stratex etc. in this regard.
The Company is a private limited company within the meaning of section 2(1) clause of the Companies Act, 1994. The following are the shares taken by each subscriber.
|Name of the
|Designation of the
|% of shares taken by each subscriber|
|Mr. Anisur Rahman Sinha||Chairman||55.0%|
|Major (Retd.) Mohammed Jahangir||Managing Director||31.5%|
|Mrs. Rebecca Jahangir||Shareholder||13.5%|
Board of Directors of National TeleCom Limited
|Mr. Anisur Rahman Sinha||Chairman|
|Major (Retd.) Mohammad Jahangir||Director|
2.02 INSTITUTIONAL POLICIES FOR EFFICIENT MANAGEMENT:
1. Mr. Anisur Rahman Sinha shall be the Chairman of the company, and shall remain in the office for a period as the law permits.
1. Major (Retd.) M. Jahangir shall be the Managing Director & CEO of the company and he shall remain in this office for a period of five years until or unless determined & decided by the Board of Directors, unless he voluntary resigns or become disqualified.
Profile of Directors
PROFILE OF THE CHAIRMAN:
Mr Anisur Rahman Sinha
Family : His father Late Mr. Habibur Rahman Sinha was a renowned Jute Trader and Exporter of the then British and Pakistan period. His father initially operated his business from Kolkata later on shifted to Narayanganj, the main Jute Centre. During his time Mr. Habibur Rahman Sinha enjoyed high position in the business circle and the society.
Education : Primary and Secondary Scholing in Narayanganj. Graduation in Commerce from prestigious DHAKA COLLEGE.
1965 : Joined the then Pakistan Army.
1971 : During the liberation war of Bangladesh he was confined in a solitary camp in Pakistan, escaped and later on caught, had to face trial in Pakistan Military Court. Fortunately Bangladesh won its independence before the finalization of the trial.
1973 : Retired from Army and started his own business.
1974 – 84 : Construction, Supply and Project Indenting
1984 – Onward : Manufacturing and Export of RMG and Textile.
It was solely his vision and sheer efforts that his group (Opex Group, Sinha Textile Group, Medlar Group) which produces all types of garments and woven and knits has achieved a number of milestones like employing about 35,000 people and establishing every link in the textile value chain starting from spinning to stitching including accessories units and washing plants that made his group the largest apparel exporter of the country. Textile plants cover spinning washing dyeing circular knitting, knit dyeing, yarn dyeing and almost all sectors of the textile, which is unique in the region. Recently Sweater and home furnishing have also been added to the list of items, which cover whole gamut of apparel production. Under Sinha’s leadership the annual turnover of the group reached around USD 150 million with 20 percent annual growth.
Other Ventures : In 2001 – Sinha Agro Based Industry was set up, which is now fully integrated starting from World Class Potato Seed Multiplication to Modern Poultry to Cold Storage to Poultry meat processing to Fast Food outlets with the brand name of Best Fried Chicken.(BFC) which has already made its mark in Dhaka City.
In 2002- Mr. Sinha became one of the Business Directors in the Lafarge Surma Cement (USD 255, 00 million project) which is the largest FDI so far in Bangladesh.
In 2005-Sattar Jute Mills has been acquired which has full-fledged factory buildings, warehouses and 55.00 acre land with a river front.
Social Commitment : Mr. Sinha has set up proper school, night school, college and hospital to serve the community in and around his industrial complex. He is also very keen in organising sports activities.
Awards : National Awards
Bangladesh National Export Gold Trophy for Five Consecutive years since 1996.
: Awards from Clients/Buyers
For good performance, quality control and reliable supply record his group also received awards from its buyers like Sears, Levi’s, Mervyns, J.C. Penny, Mays, Target Stores and other top brand names.
: Bangladesh Business Awards
Mr. Sinha won the Bangladesh Business Awards in 2001 and was named as Business Person of the year in 2001.
The Award is introduced by DHL in collaboration with The Daily Star to Bring Global Corporate Standards to Bangladesh.
This Award is considered, as the most prestigious award in Bangladesh and the Jury Board comprises of the most eminent persons of the country, the parameters of nomination are very stringent and comprehensive.
Other positions : Mr. Sinha was the president of BGMEA (Bangladesh Garment Manufacturer and Exporters Association) for the period 1998 – 2000. Fortunately that period recorded the highest growth rate in RMG exports.
Mr. Sinha is also a sponsor director of Bank Asia. He also heads the Eastern Sporting Club of Narayanganj.
Conclusion : Mr. Sinha as a person is very humble and unassuming. But in business circle he is considered as epitome of enterprise, integrity and hard work.
His approach towards business may be described in two simple words “World class” and “Integration”. Whatever ventures he has undertaken he always tenaciously pursued for these two features and achieved it.
Mr. A.R. Sinha’s standing in the business circle, government and society is highly commendable.
OPEX & SINHA TEXTILE GROUP
Brief Business Profile
Business Houses : Opex Group (Garments Manufacturing Division)
Sinha Textile Group (Spinning, weaving, Dying Division)
Medlar Group (Garments Manufacturing Division)
Founding year : 1984
Main Line of Business : Export of RMG
Export of Textile Products as backward linkage of RMG
Manufacturing Process: Yarn, Fabric, Dyeing, Finishing, Printing & Sizing, Button & Label
Service : Washing Plant, Sand Blasting & Embroidery unit.
Main Clients / Buyers : 1. AMC, 2. American Eagle, 3. Celio, 4. Charming Shoppes, 5.Cortefiel, 6. Dorby Frocks, 7.GAP, 8. Gymboree, 9. H & M, 10. J.C. Penney.11. Jhon Forsyth of Canada, 12. Joni Blair 13. Levi Strauss,14. Mervyns, 15. Phillips Van Heusen, 16. Regatta, 17. Scarlet, 18.Sears, 19. Seiden Sticker, 20. Squeeze, 21. Target, 22. V. F. Asia etc.
Total Employment nos : 36,000
Annual turnover : 2004 – US$ 250 million
Bankers : Standard Chartered Bank
Commercial Bank of Ceylon
Hongkong & Shanghai Banking Corp.
American Express Bank
Dutch Bangla Bank
Investment : US$ 350 million
Business Target : 2005 – US$ 270 million
2006 -US$ 300 million.
Employment Target : 2006 – 40,000 nos.
PROFILE OF THE MANAGING DIRECTOR & CEO:
Major (Retd) Mohammed Jahangir
Major (Retd) Mohammad Jahangir is directly involved with the following organizations:
1. Bangladesh Rural Telecom Authority Ltd.- Chairman
2. gulf Bangladesh Associates Ltd. – Chairman
3. Gulf Bangladesh Services – Proprietor
4. Oriental Business Incorporated – Proprietor
5. TeleBa Bangladesh – Proprietor
6. National TeleCom Ltd. – Managing Director/CEO
7. Gulf Bangladesh Electronics Ltd. – Chairman
8. La- Cherie Apparels Ltd. – Director
9. La-Cherie Fashion Ltd. Director
10. Fiber Bangladesh Ltd. – Chairman
11. Bangla Comtel – Chairman
12. Pacific Development Ltd. – Chairman
|Experience and Technical Skills||§ He studied and gathered experiences from the field of Telecommunication and Network Engineering and started practical session in Business arena. In light of above experience he developed himself in skill levels of Communication Network.
§ Telecommunication Network Designed and Structured.
§ Integration of Building Services onto a common data infrastructure.
§ Root level of network maintained by creating management systems.
§ Optical Fiber infrastructure design and development.
§ Radio Microwave Transmission management.
§ Frequency management case study and ability to create frequency plan.
§ Skills level works in Wireless Technology.
§ Skills level works in Wire line Technology.
§ Organized Network Management System of communication.
§ Signaling Management System and case study and its proper implementation.
§ OSP works case study and implementation.
§ Tele penetration case study of Bangladesh and other countries.
§ Telecommunication Survey Report study and proper project orientation.
§ Project implementation with proper plan and successful commission of the project.
§ Successful case study and implementation of Business at any level.
§ Financial case study of any project.
§ Determination of cost of any Telecommunication Projects.
§ Pointed out the error of any project that required finance, Capital Management, Administration, Technological plan, Development of Network that required Frequency, Signaling, Switching, Transmission etc.
|Successful History in Business
|§ In the light of above experience he started Business from 1984 by promoting “Gulf Bangladesh Associates Ltd.” that involved in PABX Business in Private Sector and he is the Chairman of the Company. It was the real history of success to him.
§ Later on different organization like La-Cherie Apparels Ltd., “Gulf Bangladesh Services”, ”Oriental Business Services” that involved in several types of business Including Garment Sector. Started business in Garment Sector in the year 1983.
§ In 1989 he started ever first Private Telecommunication Business in Bangladesh under the name and style “Bangladesh Rural Telecom Authority (BRTA) Ltd. and he was the Chairman of the Company till it merged with NationalPhone for which PSTN Operator Licence for 4 X Zones is obtained in January 2005.
§ To increase Tele Density of the country, Bangladesh Government decided to create more Telecom Service Licenses in Private sector. With intension to provide Telecommunication Service throughout the country he applied for the License for whole country except Dhaka City under the name of “National TeleCom (NTC) Ltd ” and Government (BTRC) granted PSTN Operator License in favour of National TeleCom Ltd. He is the Managing Director & Chief Executive Officer (CEO) of “National TeleCom (NTC) Ltd.”
§ As a young boy at the age of 12 years he went to Public School in Murree Hills, Pakistan and later on Joined Pakistan Military Academy, was Commissioned in 1971.
§ He served in Army upto 1983 when he went on to Voluntary Retirement to join his father’s Business. His service in the Army as an young officer was very good since he served with former President H.M. Ershad as his Staff Officer and also many years in the staff appointments in the Army Headquarters and other important posts.
§ He got the 1st Private Telecom Licence in Bangladesh in 1989 (Limited Sector – only in Rural Areas) when there was no private concept in India & Pakistan. It was Long & Real Struggle. He is capable to achieve any government approval in any field in the Interest of Public as well as of the country.
The organogram of the company is shown below.
General Manager Marketing
EXISTING INFRASTRUCTURE OF NATIONAL TELECOM LTD
NTC is the pioneer and leading organization as well as one of Ongoing Operator in PSTN Services in private sector. By installing large number of Digital Exchanges at different locations under Sylhet, Rajshahi and Dhaka Division, NTC started providing telecom services like Voice, PCO, and Wireless Local Loop (WLL) system to the remotest areas of the country.
In order to provide good service and to run local operation and administration efficiently, the company has set up Regional/Local offices in different places such Dhaka, Sylhet, Chittagong and Rajshahi Administrative Division.
Highlights of Existing infrastructure:
NTC so far established PSTN Network by installing / constructing the following:
a) Radio Transmission Link : 60
b) Exchanges : 55
c) Tandem / TAX : 04
d) Tower Erected :
i) 90 Meter : 05
ii) 60 Meter : 02
iii) 40 Meter : 19
iv) 25 Meter : 03
v) Mast : 27
e) Cabling Laying :
i) 500/.4 Pair – 700 Meter
ii) 400/.4 Pair – 750 Meter
iii) 250/.4 Pair – 1,200 Meter
iv) 200/.4 Pair – 6,710 Meter
v) 150/.4 Pair – 2,220 Meter
vi) 100/.4 Pair – 59,854 Meter
vii) 50/.4 Pair – 98,747 Meter
vii) 30/.4 Pair – 16,749 Meter
viii) 20/.4 Pair – 1,23,885 Meter
ix) 20/.5 Pair (Overhead) – 38,753 Meter
x) 10/.4 Pair – 3,76,108 Meter
xi) 10/.5 Pair (Overhead) – 1,07,762 Meter
f) Completed all Power related works
g) PCO : 40
h) Subscribers : 7,000
Business License and Agreements
1. Parties. Government of the People’s Republic of Bangladesh Bangladesh Telecom Regulatory Comission (BTRC) and National TeleCom Limited (“Operator”).
2. Licenses. The Company received four licenses from BTRC to build, own and operate a 200,000-line telecommunications network in four Zones of Bangladesh. Under the terms of the License Agreement, BTRC grants to the Operator
a. An Operator License and
b. Two frequencies, one career for 450 Mhz and two careers for 1900 Mhz renewable every year.
3. Effective Date. January 17, 2005 & January 27, 2005 valid for 20 years
a. The issuance of the Radio License with the appropriate frequencies; or
b. The Interconnection Agreement is signed by the parties in relation thereto.
4. Performance Bond. The Operator already delivered to BTRC a Performance Bond in the form of a Bank Guarantee for an amount of Taka 10 Crore.
5. Assignment. The Operator can assign the Licenses to an Affiliate in certain circumstances or with the prior consent of BTRC.
6. National and International Networks. Although the Operator is not authorised to build, own or operate a national or international network, it is authorised in certain circumstances and within its Licensed Network to design, build, operate and use certain national and international telecommunications facilities under Build Transfers and Build Transfer Operate arrangements pursuant to the Interconnection Agreement.
7. Applicable Law. The laws of the People’s Republic of Bangladesh govern the License Agreement.
8. Fees & Charges
- The Licensee, after the payment of the Entry Fee of Taka 20 million at the time of issuance of license, shall for the second and subsequent years of operation pay annual license fees comprising of the
- Fixed Component: a sum of Tk. .03 million payable by the Licensee in advance of each anniversary of the date of the License; and
- Variable Component: a sum equivalent to 2% of the annual audited gross turnover of the Licensee, which shall be paid on a quarterly basis within the first 10 days at the end of each quarter; at a rate of 2% of the gross turnover of previous quarter. The total variable component shall be reconciled on an annual basis based on the Licensee’s audited accounts for that year and if there has been any underpayment the balance must be paid within 90 days of the financial year-end of the Licensee. In the event of any over payment by the Licensee, the Licensee may set off any excess amount against quarterly payments in the next year.
- Interest at a rate of 12.5% per annum form the date of default to the date of payment, shall be payable by the Licensee for any late payment of fees.
Past years available numbers show a robust growing market in Bangladesh. From 1994 to year 1999 incoming T&T minutes grown 209.76%, outgoing minutes had shown a growth of 232.45%. [Source: BTTB Annual Report of 1998-99]
Robust growth in cellular market also shows a “Leap forging” market in Bangladesh. This is good news for any new company like National Telecom who wants to invest in nationwide network in Bangladesh. An internal study has projected a 249.87% growth for consumer market in Bangladesh.
The development of the infrastructure facilities in Bangladesh is generally limited. The country has one of the lowest fixed and wireless telephony penetration rates in the world at 4.0%. With a population of almost 140 million, Bangladesh has only 870,000 fixed-line phones. Despite these hurdles, and driven by private sector investment, the growth of the mobile phone market experienced rapid growth in the late 1990s. The number of mobile phones surpassed the number of fixed line phones in 2001 and at the end of May 2005 total connection was 61.5 million. In Bangladesh, like in every other nation, there exists a strong demand for telecommunication services. The telecom sector in Bangladesh is still in its infancy and opportunities exist for those companies that can create and execute on a successful business model that addresses the telecommunication needs of Bangladeshis. National TeleCom recognizes this opportunity and the company’s currently proposed project is one that will not only meet consumer demand followed by maintaining a high quality network, but will also flourish the awareness and perception of National Phone brand, position the company as a customer centric organization, and widen its distribution network.
3.1.1 Market understanding
The demand for telephone services will mainly emerge from following directions:
· New / additional connections from the existing owners
· New connections from consumers currently on the BTTB “waiting list”
· New connections from potential consumers, who intend to acquire telephone connections in near future.
3.1.2 Telephone Penetration & ownership
· In Dhaka, around 35% business establishments and 18% households own telephones. Average telephone lines owned is around 1.4 for establishments & 1.1 for households.
3.1.3 Satisfaction with BTTB’s service
· 22% (18,000) of all establishments found BTTB service to be Poor (given choice of “Very Satisfactory, satisfactory and poor”)
· 24% (40,000) of all households found BTTB service to be “Poor”
· Large numbers of Lowest and Highest Income households found BTTB service to be “Poor”, suggesting:
o An attempt by BTTB to concentrate of higher income households (reflected in neglecting low income households) and
o Failing on the attempt (reflected in dissatisfied high income households)
3.1.4 Important factors affecting Telecom Service
· The three most important factors (related to telecom service) that have emerged from the research are:
o Ready availability of connection
o Cost of service
o Quick and clear phone connectivity
· Large establishments rated low fault / breakdown as a significant factor besides cost and ready availability (mentioned above).
3.1.5 Expectations from private Telecom Operator
· As we can observe, the telecom owners have high expectations form the private operator, particularly in terms of ready availability of telephone connections, and quick and clear connectivity. They seem to be somewhat skeptical about the cost / pricing of the service & network maintenance (low fault / breakdown).
· While most of the respondents were positively disposed towards the proposed service offering of NTCl, they had certain misgivings. Important to note here is that most of these misgivings arose out their lack of trust towards private operators.
3.1.6 Interest in Private operator
· 74% of establishments and 46% of households are interested in taking service from a private operator.
· When looked at among those intending to own a telephone connection, 74% of such establishments and 61% of such households are interested in taking service from a private operator
3.1.7 PROMOTIONAL ISSUES TO ATTRACT THE SUBSCRIBERS
The Company should have effective promotional issues to attract the subscribers:
1. Quality of Services:
Maintenance and operation are to be such as to give adequate, efficient and satisfactory services in observance of the principles of economy and by maintaining standards set by the authority.
2. Users Oriented Services:
The telecommunications services shall be oriented towards meeting the users’ demands /needs, not only for new services, but also in respect of performance of the services, transparency of operations, provisions of information and assistance in case of difficulties. Networks shall be planned to be user friendly and shall be equipped with modern technologies and shall be managed by the set procedures.
3. One Point Services:
The establishment of one – point service centers by all the operators will be encouraged for the convenience of the users. The authority will be responsible for the preparation and publication of their own subscriber directories and updating of the same at regular interval (e.g. annually) for the information of the public.
4. Staff Standard:
National TeleCom Ltd will plan and prepare the staff standard and administer its own staff structure. It will also adopt procedures and methods to run on full commercial terms and optimize the value for money.
5. Billing System:
The Company will have integrated door-to-door bill collection system, which will help to recover the initial capital outlay quickly.
6. Low pricing:
The bill of per call will minimum in comparison with BTTB.
7. Regular Line checking:
Line checking will be a regular work of the company. The technical team will help to repair and maintain the defect line immediately.
8. Technical Trouble Shooting:
National TeleCom Ltd will have the provision for trouble shooting in zonal technical center.
3.1.8 NTC POSITION
In the SWOT analysis that follows, National Telecom maintains a healthy position. National Telecom has substantial strengths to balance out weaknesses.
Since National Telecom emerged from former BRTA, it has good understanding of the rural market and practical experience of what works and what does not work in Bangladesh. Besides it has number of experienced staffs, which can deploy network and have practical experience of maintaining a “Live” network. Most other telephone companies are unlike to have such a reservoir of experienced technical staff.
Since fixed line rates are much cheaper than mobile call rates, National Telecom can easily get a good chunk of rural phone businesses [Known as Village Phone service to experts] popularized by Grameen phone in Bangladesh. Price advantage plays a great role in Bangladeshi market place.
Unlike many other PSTN operators, National Telecom has license to operate all over Bangladesh except Dhaka. Dhaka should open up as soon World Tel settles the lawsuit with telecom authority of Bangladesh.
By the time National Telecom gets to consumer market, expecting at least four or five major players in the consumer market. Thus National will miss the first wave of “Easy picking” customer who is likely to sign up for services with negligible marketing cost. This will compel National Telecom to spend lot more of her resources to establish marketing campaigns to draw attention of new customers.
Although National has some experienced technical staffs, the very ambitious goal will require a fast moving “Network team” who can deploy “Scalable network” in little time without compromising with network quality. This will require National to seek a service partner, who will support its network and other related operations.
There are plenty of opportunities for National Telecom. If it can support a multi-level modern marketing plan, it has the potential to establish itself as a leading telephone company in Bangladesh.
Since there is a semi-mature mobile phone market exists in Bangladesh, the price advantage over mobile phones will give a good slice of mobile market to PSTN operators like National Telecom with very little effort.
National Telecom has plans to establish QA concept in its operation and have a “Quality Edge” in the market. For example there is a sizable “High volume customers” who are willing to pay a little more for quality in most urban areas. Success of Grameen Phone is an example of this concept in mobile market.
National Telecom can offer, “Bundled services” to customer and increase it’s revenue stream quite easily. An example of this will be giving “One bill” to high volume customer for internet, caller ID, three way calling, video conference and telephone.
There are great potential to use “C to C” [Consumer to consumer] Marketing model, which is virtually unknown in Bangladesh. Most companies also do not use any “marketing partnership” models either. For example National Telecom can employ an establish electronic business house to market to it’s high volume post paid customer segment of the market, who are likely to have a computer at home and spend a lot more in telecommunications.
There are many Bangladeshis working in different countries all over the world. These families spend considerable amount of money making international calls to and from Bangladesh. National Telecom plans to target such areas like Sylhet and Chittagong to take advantage of this dialing habit. National Telecom can earn significant amount of money by just delivering international calls to its customers. This should remain as a key strategy of National Telecom marketing plan.
In the long run, there are too many telephone players in Bangladesh and some are bound to fail to establish themselves. So it will present National Telecom an unique opportunity to sign up those customers and buy networking hardware for very good price.
If National Telecom manages to acquire or jointly bill with a mobile phone company, it will give this company an edge over rest of PSTN operators.
Government of Bangladesh issued many licenses for PSTN operators at the same time. So National Telecom must execute its marketing plan for its services otherwise it is destined for future telecom “Garage sale” of Bangladesh. Existing mobile company’s strength is the big threat for PSTN companies.
4. BUSINESS PLAN
4.1.1 Business objectives
The marketing plan has three principle objectives:
· Understanding customer needs so as to provide the right product mix of Internet/telephony services to the target segments
· Adopting the appropriate pricing strategies to maximize revenues through usage driven growth
· Create appropriate brand positioning in the market.
Here is a “Snap Shot” at current telecom players in Bangladesh.
|Sl||Name of Operator||Present
|1||Grameen phone||Expanded their Network allover the country, network/Services are available but tariff not comfortable.||3.1 million||Voice, Data, Value Added Services.|
|2||AKTEL||All the Districts and its surroundings already covered considering competitive market with extra facilities for subscriber, based on Tariff.||1.55 million||Voice, Data, Value Added Services and GPRS, Internet service.|
|3||Citycell||Most of the areas of counties network are available but services not satisfactory and also technological limitation.||0.6 million||Voice, Data, Value Added Services.|
|4||BanglaLink||Started installation fast under new management to capture the market, their reputation in some Asian countries are very good, already adopted some policies to get market share.||0.4 million||Voice, Data, Value Added Services.|
|5||New PSTN Operator
(As per list supplied)
|Most of the New operators working on infrastructure level like Exchange Accommodation, Tower erection, and Equipment selection and within very soon 2 or 3 operators will start their commercial operation.||–||In view of latest features.||Those who will come early in the market, they will get more benefit based on purchase ability of the customers.|
|6||BTTB||Services are available in district level and also they have planned to install digital exchanges in thana level, already more or less 200 thanas are in operation under digital services.||0.85 million||Voice, Data, Internet service|
|7||Teletalk||Recently released but not satisfactory. Public demand is huge. People are crazy to get Teletalk.||50,000|
The marketing plan has three principle objectives:
· Understanding customer needs so as to provide the right product mix of Internet/telephony services to the target segments
· Adopting the appropriate pricing strategies to maximize revenues through usage driven growth
· Create appropriate brand positioning in the market.
NTC plans to offer cutting edge products like data services, videoconferences, three ways calling, caller ID and Internet services in addition to basic phone service. Initially National Phone will market basic voice (NWD, Local and ISD) and data services (Internet) to it’s customers. However the intelligent network should be able to support the following services as well.
Eventually National Telecom plans to add various data services which include Frame Relay, ATM service, Managed wave length services, Inter Exchange services, Call center, Point to Point, “On-Net” services, leased and private line and VPN and all other feature provided by Class 4 and Class 5 systems.
|SL#||Services to be Offered|
|01||Hotline With Time-Out|
|02||Abbreviate Dialing/Speed Dialing|
|03||Outgoing Call Barring|
|04||Do Not Disturb|
|07||Registered Call On Busy|
|08||Call Forwarding Unconditional|
|09||Call Forwarding No Reply|
|10||Call Forwarding Busy|
|12||Calling Number Hearing|
|13||Calling Line Identification Restriction|
|17||Telephone Lock/Unlock for Toll, ISD, Total|
|18||Malicious Call Trace|
|19||Calling Line Identification Presentation|
|22||Multi Party Conference Call|
|23||Black List For Incoming/Outgoing Calls|
|25||Internet Service (Broadband, Narrowband)|
|26||Tele or Net Meeting|
|32||Pay Phone Service.|
|34||Video on Demand (VoD).|
|35||National Call Centre|
|37||Tele Agro Service.|
|43||CaTV, CCTV, Web Camp, Security service|
|44||IXC (Inter Exchange Carrier)|
4.1.4 Market segmentation
The market is segmented into two broad categories of users: Business and Residential.
This segment comprises 2 sub-segments – (1) Large corporate and (2) SMEs (Small and Medium Enterprises). These would subscribe to the complete range of services being offered by the Company.
High Net-worth Individuals (HNWIs) – HNWIs include individuals whose household income would be above a defined limit. Typically, these households have existing phone connections and their telephone bills are above a threshold limit.
PCOs (Public Call Offices)/Payphones and Internet browsing centres would comprise the resellers segment. Private entrepreneurs would subscribe to NTC lines and would serve the general public for which the entrepreneur will get a commission of 30% from NTC.
The ultimate price to the general public would be within the prevailing tariff cap.
4.1.5 Brand positioning and Promotion strategy
The landline telecom industry in Bangladesh is a monopoly and BTTB is the only service provider. This has not required service efficiency, quality and branding.
NTC expects to capitalize on this situation by establishing a strong market presence with powerful brand equity built primarily on the following platforms:
· Reliability, and
The following lists highlights NTC’s branding and promotion activities that to be implemented:
· Outdoor billboards, roadside light boxes, etc. In an effort to further promote the company brand, NTC will deploy creative and provocative billboards and backlit sign boxes along major roadways and high traffic city streets. This marketing channel greatly helps to communicate the company’s brand to consumers.
· Point-of-sale posters, handouts, road banners, stickers, etc. NTC will select dedicated sellers and authorized sellers and will be provided with a variety of point-of-sale advertising and promotional materials that should be placed in highly visible consumer locations. Experiences of National TeleComresulted from operating in other market revealed that this sorts of activity will strengthen band recognition communicate different packages and value added services provided by the company.
· Television advertising. Advertising on television is one of the most effective ways to communicate branding and promotion strategy to the consumers. NTC will promote its products through television commercials that run for approximately one month for any particular campaign.
· Print media. Newspaper and magazine advertisements will play a supporting role for the company’s television advertising. Print media is extremely effective in providing customers with a wide range of product information.
· Premium products. NTC will produce a variety of corporate gifts that will serve both to thank existing clients for their patronage, a well to communicate the brand. Premium products will include organizers, pens, watches, t-shirts, mugs, bags etc.
· Corporate signings. NTC will attract large corporate customer base by providing best quality services, which results from installing the most advanced telecom technology first of its kind in Bangladesh. It may be mentioned that NTC will organize highly publicized corporate signing ceremony to communicate the mass through press release.
· Company newsletter. NTC will publish a newsletter for circulating every month to the valued customers, updating them the company’s latest airtime package, tariff rates, value added services, and technological advancements.
4.1.6 The marketing mix
Products and services
Two broad categories of services will be provided under the heads:
· Services for fixed line customers using
o Cable line
o WLL connection; and
· Internet/Broadband data Services.
Under the first category the following services will be offered:
· POTS (plain old telephony service);
· Intelligent Network (IN) services;
· Centrex/EPABX services; and
· Value Added Services.
Product segment matrix
NTC would be offering a range of infocom products to the Dhaka market, each of which would be targeted at a specific target segment. The Product-Segment Matrix has been captured in the table below. Most of the products would be used by most of the segments, but the table below indicates the pre-dominantly used products by that particular segment.
National TeleCom has already launched a media campaign in the national dailies. The purpose of these is just to make the public aware of their existence in the Bangladeshi market. National TeleCom does not intend to get any feedback other than awareness from these advertisements, so these are more of a notification rather than an advertisement.
Sales would be affected through a combination of dedicated NTC sales teams and dealer/franchisee networks. These resources would be deployed depending on the type of customer.
· Business Segment – The dealer network would be used to effect sales to Small and Medium Enterprises (SMEs), while a dedicated NTC sales force would address sales to large and medium corporate, private institutions with high volume demands.
· Residential Segment – Direct sales to HNWIs would be done through a franchisee network. However, sales to commercial/residential complexes would be done directly by a NTC dedicated sales team, which will also be responsible for managing the franchisee network.
NTC expects a fairly competitive environment and therefore will adopt an overall tariff policy framework, which addresses the following essential business issues:
· Pricing to be Long-run IRR driven
· Ensure optimal network utilization
· Tariff to drive usage and revenue
· Achieve business viability of dealers and PCOs
· Discounts structured on committed usage.
The tariff structure would be competitively lower than most other quality service providers for each category of users leading to primarily a high volume-medium margin business. NTC would be in a position to offer competitive tariffs since it’s service offer is based on a unique platform of total service solution and the business economics are derived from a complete ownership of all network assets.
4.1.8Customer service and retention strategy
NTC recognizes the customer retention is a key element of the company’s growth and the successful customer retention must involve a co-ordinate effort from the entire organization. The following list highlights NTC’s plan aims to customer satisfaction, which will enable maximizing customer retention:
· Call center. NTC plans to establish a 24-hour call center located in its Corporate Office. The call center will employ necessary personnel helping to operate on three 8-hour shifts, and addresses all customer queries, complaints, suggestions, billing inquiries, and any other issue customers may wish to discuss. The call centers operators shall be essentially one of the first lines of communication between potential customers and the company. The call center plans to maintain detail database on all its customers and will be well equipped to address all customer queries. NTC will arrange necessary training for call center operators to actively manage the company’s product, new order or customer queries.
· Customer service centers. NTC plans to establish well-designed customer service centers located in various locations of Bangladesh. Each service center will be equipped with modern customer database systems (linked to call center’s customer database) and to be operated by trained customer service executives. These customer service centers would be among the most professional and customer focused in the country.
· Dedicated customer support for corporate clients. At the beginning of NTC’s commercial operation a corporate customer support team will be in place to deal exclusively with the corporate clients.
PROJECT COST AND FINANCIAL PLAN