view with charts and images
Telecom Malaysia International Bangladesh
1.1 Background of the Report:
The internship program is an educational requirement of BBA Program under East West University. Bachelor in Business Administration or BBA is a professional degree. BBA students have to do an internship program as a practical orientation to the workplace where he/she can merge the theoretical knowledge with practical work experience. I have been pursuing my internship program in the Customer Care Department under the Core Marketing Division of AKTEL Bangladesh (Telecom Malaysia International Bangladesh). Its corporate office is located in ‘Silver Tower’ Gulshan-1.
a. Rationale of the Report:
The main objective of this study is to prepare an Internship report on the specified topic working within an organization and implementing the knowledge that has been gathered during the Internship Program.
b. Objectives of the Report:
The specific objectives of this report are as follows:
- To analyze the current scenario of our Telecom Industry.
- To understand the operation and current condition of AKTEL.
- To find out the current arrangements of AKTEL regarding corporate services.
- To perceive the entire activities they performed to furnish the corporate services providing complete satisfaction to the corporate clients
- To determine the Consumer Preference s Level of AKTEL regarding corporate package
- To determine the level of negotiation and customization demanded by the customer
- To describe the Internship Activities and experiences gathered while working with the AKTEL corporate client project.
1.2 Origin of the Report
Each professional degree needs practical knowledge of the respective field of discipline to be fruitful. Our BBA program also has an Internship Program, relating to the exchange of theoretical knowledge into the real life. This report entitled “Appraisal of Customer Services to the corporate client provided by AKTEL”.
During the Internship Program, I was under supervision and guidance of, Saadia Shabnam lecturer, department of Business administration, East West University.
And I had to submit my internship report to Mr Tanvir Rahman , Deputy Manager, Customer Service Division, Silver tower Branch , TM International Bangladesh Ltd (AKTEL). He was always careful about my performance.
Moreover, during the attachment in AKTEL, I was under the supervision and guidance of Mr. Abdullah Al Mahbub , Senior Executive, Customer Service Division, Silver Tower Branch, TM International Bangladesh Ltd (AKTEL).
1.3 Methodology:
The report tried to evaluate Customer Services to the corporate client provided by AKTEL”Why the clients use this connection. Before going in to the deep study, conceptual structure visualized under which the whole study was conducted.
In preparing this report about the Customer Services to the corporate client provided by AKTEL” is a difficult and complicated task and no single method is appropriate for conducting the exploratory research. For this reason, a number of procedures have been followed to prepare a meaningful report. The methodology of the task can be depicted as follows. Primary data, Secondary data collection, Expert surveys.
Sources of Data
This study covered two types of data, which are:
a. Primary data b. Secondary data
a. Primary Data:
Primary data has been collected through a structured questionnaire, constructed specially for this report.
To collect the primary data, the following steps have been followed to obtain the research objective:
- # Data collected from web site.
- # Taking interviews of subscribers over Phone.
- # Taking face-to-face interviews of subscribers.
- # Interview of key informant that is the senior official of AKTEL in order to collect
- Information about the services.
- # Interview of industry expert, regarding the corporate clientele issue.
b. Secondary Data:
Going through different documents and papers, news letter (for internal purpose only), developed by the company personnel, different books, journals, newspapers, brochures, website also was used to collect the secondary data. Huge number of data was collected from the Corporate sales division of AKTEL ,
* Collection Procedure of Data:
Personal interview technique was the primary tool used in collecting information. Interview with the Customer have done. Managers and officers of AKTEL from different divisions were the main sources of secondary data. The corporate sales executive, account manager and assistant manager of corporate sales division provide me proper information and assistance about the issue.
* Analysis of Data:
Basically, I performed qualitative research here. A profile of corporate client is made and some hypothesis were made to analyze the concerning issues.
Sampling Plan and Sample Size:
** Study Population:
The first step of the sampling design is to define the study population. Due to time restriction and other limitations, the survey will only focus on the officials of the corporate sales department of AKTEL, and some industry expert’s opinion. The sample area has been selected on the basis of organization’s interest and on the basis of availability.
** Sampling Frame:
As there is no concrete list or number Corporate Client, it is tough to perform a structured sampling frame. The sample frame is random selection. The researcher has to take personal depth interview to meet up own requirement.
** Sampling Method:
To investigate the issue customer service towards the corporate client, Non-probability Sampling Procedure has been used. The sampling unit was selected through Convenience Sampling: where the selection of the sampling unit is left primarily on the interviewer. The reason behind choosing Convenience Sampling is many but here most importantly, there is no appropriate structure or framework that can aid to select the sample. Farther, these procedures are both time saving and inexpensive.
** Data Gathering Method:
Basically this research paper is based on qualitative research, which formulated through different Kinds interview on respective personnel
.
** Data Collection Method:
The data has been collected through questionnaire survey. When I got the uneducated respondent, then as the interviewer I fill up the questionnaire based on the respondent answer.
** Profile and Analysis Procedure:
A profile of typical corporate client of AKTEL has been made on the basis of collected information and some hypothesis are constructed for the purpose of analysis
1.4 Limitations of this Report:
The study is not free from some practical limitations. Following limitations I have to face during the study and the time of working and data collection:
Time is the main limitation for my study. Due to lack of sufficient time, I was not able to do survey properly among all of the potential sample size. That’s why the findings may not be fully but partially true. If I had more time I could go for more descriptive research and discover more accurate result. Workload during the Internship Program at the work place was also a barrier to prepare this report. The data collection was full of complexities because relevant data sources were hard to find out. There are so many obstacles because; the service provider company is not willing to disclose their offerings and flexibilities towards the general people. Due to lack of practical experience, some errors might be occurred during the study. In spite of the maximum efforts was taken to avoid the mistakes.
* Time Line for the Research:
Internship Program has been conducted in the following time 7th February 2008-30th April, 2008. Preparation of literature review, formulating research objective, conducting introductory chapter including detailed context of the study as well as development of research design was done in the period of internship.
Chapter – 1
1.5 Introduction
Mobile phone means a device that transmits voice or data, using radio waves to communicate with radio antennas placed within adjacent geographic areas called cells. It is a very common source of communication in these days. Most of the people are using mobile phone in the city and the urban areas. Telecommunication linked with satellites. It brings about revolutionary changes in communication. New STD (Standard) and ISD (International System for Dialog) facilities have made communication an instantaneous process. The world appears to have contracted or been squeezed into a small room in which, given certain facilities, it is possible to communicate with anyone in any part of the world.
1.6 Background of the Telecommunication Industry in Bangladesh
In this era of globalization, communication has become the most significant factor. For this, telecom industry is playing the major role to change the lives of the people and their business. In a densely populated country like Bangladesh, telecommunication can play a vital role to boost the economy and social level of people. This sector is poised for rapid growth in the coming years. Moreover, the efficiency of other businesses has already increased because mobile phone has become easily available in these days due to the government’s decision of deregulating the telecommunications sector, which had been a state monopoly until the late 1980s. Privatization of the telecommunication sector began in 1989, when Sheba and BRTA were awarded 25-year licenses to install and operate fixed-wire lines and wireless services in rural areas. The same year, Pacific Telecom Bangladesh got the Government’s permission to launch the country’s fire cellular phone and paging service sold under brand name CityCell in collaboration with a Hong Kong based company. The company targeted only the higher class of the society. During that time price of mobile was above Tk 50,000/. Naturally, the growth of the industry was very slow. CityCell had a virtual monopoly until 1996, when the government gave licenses to three more companies to operate cell phones in Bangladesh. So the government decided to bring more companies in the market and break the monopoly.
After a careful evaluation, Bangladesh government decided to provide three licenses to GrameenPhone, TMIB (AKTEL), and Sheba Telecom (today’s BanglaLink). CityCell is using the CDMA (Code Division Multiple Access) technology. GrameenPhone, AKTEL, and BanglaLink are using GSM technology. GSM is the most popular mobile telecommunication technology in the world. About 60% of the cell phone users of the world use GSM technology.
These three new companies entered the market, not only helped to cut back the over-dependence on BTTB’s fixed-line system, but also made mobile phones cheaper and easier to get. A definite development has been observed in the business market with comparatively high expectations. Customer maturity and anticipation regarding technology has increased over time. Rumors regarding new entrants have groomed expectations in the market. Consequently, people are expecting cheaper handsets with lowered airtime.
However, the recent entrances of private fixed land phone companies have increased the concern of the cell phone companies. New companies like RanksTel, OneTel, Bay Phone and Bijoy Phone have kicked off their operations in different districts in Southeast, Northeast and Northwest regions of Bangladesh. In near future, this new segment might be a creeping threat for the existing players inside the industry.
1.6.1 Reforms in Telecommunication Sector of Bangladesh
Most countries have already undergone fundamental telecom sector reform. Bangladesh is absolutely one of the last that bring up the rear to learn from others’ lessons. However, it is not evident that Bangladesh’s reform model is based on a clearly articulated and supported strategy. Most countries have gradually transitioned from monopoly provision of services by state-owned incumbent to competitive market structure where several companies fight to capture and keep customers. The key is to time the introduction of competition in a way that aligns with the growth, maturity and advancement of the telecom infrastructure and service provision. By licensing six mobile and 19 PSTN operators, Bangladesh has rapidly leapt from closed monopoly to open market in all but a bold moves granted, there is a challenge. In advanced market there is usually room for plenty of competition due to market size and maturity. Bangladesh’s $2 billion revenue market still requires substantial amounts of infrastructure build-out especially for fixed and data services. In this context, the opportunity rapidly crumbles into much smaller prizes when split between half a dozen hungry mobile operators and then all of 19 fixed ones. In Germany, which is a country with an advanced telecom infrastructure and sophisticated market and a GDP of $2.5 trillion, the government issued six mobile operator licenses to offer next-generation “3G” services in 2001. After post-licensing consolidation only four of them survive today.
1.6.2 Telecom Industry in SAARC countries
Bangladesh has one of the lowest tele density and the lowest telephone penetration rates in the world and even in the South Asia. According to the ITU (International Telecommunication) report, the telecommunication revenue as a percentage of the GDP is also low in Bangladesh compared to other regional countries. Among the SAARC countries’ per 100 inhabitants, Maldives has the highest tele density while Bangladesh has the lowest
| Country | Bangladesh | India | Pakistan | Nepal | Bhutan | Maldives | Sri Lanka |
| Number of Telephone per 100 Inhabitants | 0.79 | 4.01 | 2.9 | 1.34 | 2.03 | 16.92 | 8.1 |
Figure: Number of telephone per 100 inhabitants in SAARC countries.
1.6.3 Market Growth of Telecom Industry
At the initial stage of the mobile telecom industry because of high startup cost and high tariff there was only a few numbers of subscribers. In 1997, there were approximately 2000 mobile subscribers around the country with a low market penetration rate (0.02%). At present, the number of mobile subscribers in the country is approximately 10 million. Currently Bangladesh has five operators as Teletalk a sister concern of BTTB has entered in the market recently. Though Teletalk targeted to cover 0.25 million subscribers by first six months of launch and 1 million by 2006, in reality only 80,000 customers base has been created in first 5 months. In addition, Teletalk has offered lower rate with PSTN connection all over the country. The total number of districts covered in mobile industry has been increased to 61 in 2005 from 1 in 1997. The total telecom growth has increased to 55% in 2004 from 19% in 1998. Initially, mobile growth rate was too high which was 178% in 1998 and it came to 51% in the year 2005. So we can say that the industry is not going to its maturity stage. From the comparison of different operators’ subscriber base, it can be said that still GrameenPhone is leading the way with a sharp distance. Though Citycell is the first mobile operator in Bangladesh, it is not doing its business s good. BanglaLink has done an excellent breakthrough as it has increased its subscriber base from 3000 (ex-Sheba) in 1998 to almost 2 million in this year 2006. On the other hand, AKTEL is growing its subscribers faster than CityCell, which is from 3000 in 1997 to about 3.8 million in this year 2006.
As the number of companies inside the telecom industry is increasing, the penetration level is getting high. Consequently, the penetration in the mobile industry in 2005 is 4.89%. The growth of mobile industry has drastically changed in 2005-2006 because of the Govt. tax imposed on each SIM card purchase. However, the telecom industry growth is almost same as in 2004 since new fixed land phone companies have started their operations.
| 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |
| Market Penetration | 0.02% | 0.05% | 0.1% | 0.21% | 0.53% | 0.87% | 1.88% | 3.13% | 4.89% |
| District Coverage | 1 | 2 | 26 | 36 | 40 | 49 | 59 | 61 | 61 |
| Telecom Growth Rate | – | 19% | 17% | 34% | 66% | 42% | 40% | 55% | 52% |
| SUBSCRIBERS BASE | |||||||||
| GrameenPhone | 18,000 | 30,000 | 60,000 | 191,690 | 471,371 | 775,310 | 1,878,000 | 2,424,177 | 40,00,000 |
| CityCell | 2,000 | 19,000 | 26,200 | 33,500 | 100,000 | 160,000 | 2,250,000 | 370,000 | 4,00,000 |
| AKTel | 3,000 | 12,000 | 28,500 | 34,200 | 96,000 | 150,000 | 300,000 | 1,000,000 | 2,500,000 |
| BanglaLink (ex-Sheba) | – | 3,000 | 11,000 | 19,000 | 27,000 | 60,000 | 70,000 | 100,000 | 5,00,000 |
| TeleTalk | – | – | – | – | – | – | – | – | 80,000 |
Figure: Growth of Telecom Industry 1997-2006
1.7 Subscriber Base of Mobile Operators of our Country
In this competitive market, all the companies are adopting different policies to draw the customers towards then offering so many varieties of products & services. Currently, GrameenPhone is the market leader with almost 9 million subscriber’s base till August 2006. AKTEL is holding their position in the second place and trying hard to become the market leader within the year 2008. BanglaLink with their aggressive marketing strategy is creating chaos in the market through price war. TeleTalk & CityCell are struggling in the market to hold their positions, as both the companies need to concentrate on their product development and marketing research activities.
Figure: Subscriber Base of All the Mobile Companies Currently Operating in the Market
Figure: Market Share of the Companies Currently Operating in the Market
1.8 Product Life Cycle
If we point the tentative picture of the mobile phone and land phone, then we will get the product life cycle where we can clearly find out that land phone has already passed its growth stage, as it is not growing rapidly. But in case of mobile phone we can find out that it is in the growth stage as the revenue generated from this product is increasing and still has the potentiality to be boosted up and contribute to the telecommunication sector.
On the market strategies segment the product strategy is on the offer product extensions and on service orientation. More and more offers of value added service and added features are included in the package. The pricing strategy is to penetrate the market. So they are all more or less following the penetration pricing strategy. In distribution strategy the industry is the building on intensive distribution. More and more emphasis is given on gaining the market. So distributing the product to the far corners of the country has become a priority. In case advertising & promotional strategy the companies are all in aggressive advertising policy. Using all the possible media uses to increase the market share & reaching potential customers in mass market. Lastly in sales promotion the companies are on a rampage. They are offering enormous amount of services with the same package & low cost rate with different events all round the year.
1.9 Situational Analysis
Situation analysis is the broader activity of understanding the changing external environment that may impact the organization. It is one of the most important parts of the environmental scanning to alert the decision makers to potentially significant external changes before they crystallize. Consequently, decision makers have sufficient lead-time to react to the change.
Political Factors
In Bangladesh, there are a few companies that are not affected by political situation as well as by the government policies. That’s why marketing strategy is deeply affected by political perspectives. The government of Bangladesh has given mobile sector ample amount of freedom to do business. There were some stiff regulations that hindered the possible entry in the mid 90’s but as technology entered the new millennia, government freed the way for companies to enter the market. Government’s stability affects the operators and new companies in taking investing activities whether government will be liberal or strict in transferring profit from the country. Moreover, Monitory policy affects the mobile operators in terms of currency valuation that is devaluation leads them to increase in dollar value cost of operating activities. This also affects their increase in cost of importing instruments and technical devices. Political support for a particular company can threaten other companies in various ways. Government’s support can increase the growth of this industry. During the last fiscal year, when government imposed Tk 900 tax on the SIM card, it severely hampered the growth of the industry. Market research revealed that the new connection selling has decreased 55% from May’06 to July’06.
Economic Factors
Economic trends can also affect the growth of the mobile phone user. Usually economic environment is analyzed with reference to the following key economic factors: employment, CPI, personal income, real GNP etc. The stable GDP from the year 1992 to 2006 has increased mobile phone user from 0 to 8 million. Increase in the employment, saving rate and purchasing power as well as the spending capacity acted as a catalyst for this amazing increase in the number of mobile phone users. Heavy growth of small families is increasing so there is bright prospect that this user segment will continue to rise like the past. However, the increasing inflation rate is badly hampering the amount of discretionary income as the price of different consumer products is increasing in an alarming rate. People are becoming more conscious about their living standard. This squeezing of the income amount may affect the growth of the industry. Still the growth has been tremendous over the last few years particularly in the year 2006 when BanglaLink entered the market. Meanwhile, GrameenPhone reached an astonishing 85 lakhs customer base this year.
Social Factors
The ultimate test of a business is its social relevance. An important aspect of the social environment concerns the values consumers’ hold. Values mainly revolve around a number of fundamental concerns regarding time, environment, personal finance, diversity etc.
Orientation towards time: Convenience is a critical source of differential advantage, particularly in the service sector. Youth are making or influencing more household decisions. Moreover as the population ages time pressures become more widespread and acute. The interest to acquire and use new technology has been a big factor. Everybody wants to be connected with each other & having a mobile connection has become a social status for some part of the population.
Diversity of Lifestyle: People from various age and segment have a positive response to have a mobile phone if he has the ability to have it. People’s perception toward mobile phone has changed from the past. Today mobile phones have given a diversified lifestyle to the society. The diversification & integration and doing multi tasking has become more easy day-by-day. The connections in the rural areas have given a touch of focusing the rural business with the business of that of the capital.
Technological Factors
Technological factors include the use of technology in doing business. Up to date use of technology helps to acquire the economies of scale for the company and cost savings. It also gives them the opportunity to expand in the future. In recent times, Bangladesh has connected to the fiber optic. This information super high way can dramatically change the entire nation in creating new business opportunity. If there is an increase in the business activity, there will be more employment. Therefore, more people who will have the ability to have a mobile phone. Again large business activity will also need more communication to run business transaction. This will also increase the need of mobile phone. Considering other technological sectors, people are being more attached with the technology. This attitude of tying up with technology is showing increase the selling of computer, increase in the Internet user, and increase in the number of cyber café, increase in the land phone user and many more. Changes and positive response will lead to further increase in the need and growth of mobile phone users. Currently the mobile phone companies of our country are not exactly using the state of the art of technology. Although different multinational companies like Siemens, Nokia & Sony Ericsson are helping these companies but they need to be updated more.
1.10. Intensity of Competition
It is a matter of fact that to survive in an industry, grow, sustain in competition and to differentiate with others operating in the same industry, a company must understand the dynamics of the industry competition among firms. Michael Porter has developed a framework, named as “PORTER’S FIVE FORCES MODEL” with which we can analyze the industry environment to identify the threats & opportunities of the firm. The model is based on five forces that shape competition within an industry, i.e. –
Risk of Entry by Potential Competitors:
Potential Entrants are companies that are not currently competing an industry but have the capability to do so if they choose. It is a distinct fact that the risk of entry by potential competitors is a function of height of Barriers to Entry. A new entrant in telecommunication industry will have to face situations with the disadvantage because it is impossible to have economies of scale and the entrant will not have any cost advantage. For a new entrant the brand identity depends on whether the company is a multinational or a local company. If it is a multinational company, then and only then it will have some sort of brand identity. For a new entrant, access to distribution is limited. Switching costs for a new entrant is high. On top of that, capital requirement for a new company is high because system formulation and network establishment.Also there are some Government policieslike the introduction of new tax on every purchase of a new connection. In the following we will discuss these matters in details:
Barriers to Entry have three main sources, i.e. – brand loyalty, absolute cost advantages & economies of scale.
i. Brand Loyalty:
Large companies enjoy a brand loyalty in the market through its huge customer base, customer retention ratio, reputation, high product quality, and after sales service. There are large established companies in telecommunication sector, like GrameenPhone, BanglaLink, CityCell, and TeleTalk who have brand loyal customers & enjoy a competitive position in the market. So whatever product/service they come up in the future they can easily capture market share. This makes it difficult for new entrants to fight with these established brands for gaining market share.
ii. Absolute Cost Advantage:
Absolute Cost Advantage arise from following sources; i.e. – product diversification, pricing strategy etc, they represent lower risk than entrants. In mobile telecommunication industry companies have long experience in this sector. Some of them have experience in doing business in different parts of the world. Using that experience here & following those successful strategies gives the companies some cost advantages as well.
iii. Economies of Scale
The sources of economies of scale are i.e. – discounts on bulk purchases cards, advantages gained by spreading fixed production cost over a large production volume and cost savings associated with spreading marketing/advertising expense over a large output.
In telecommunication industry the companies get 2% – 5% discounts from card making companies because of bulk purchase, can spread fixed cost over huge number of conversions & save advertising costs over their large output.
iv. Customer Switching Costs
Switching costs arise when it costs a customer time, energy & money to switch from products offered by established firms to products offered by new entrants. Because of intense competition in the market the switching cost is very low right now. The companies are offering very low connection fee. So there is a tendency of customers using multiple company service at the same time.
v. Government Regulation
Government regulation summarizes government’s policy towards setting up new industry.
· The newly imposed tax of Tk 1,200 on every mobile SIM (subscriber identification module) card and connection
· The government had reduced the mobile handset tariff in fiscal 2004-05 to Tk 1,500 from the previous Tk 4,000
Bargaining Power of Suppliers:
It refers to the ability of suppliers to raise input prices, threat to stop selling products & delay in delivering products. The suppliers are the mobile SIM card providers. They don’t have that much of bargaining power with the company. The reason is, Supplier concentration for telecommunications industry is low in Bangladesh. Moreover, there are very few buyers (only five operators) in Bangladesh as well. Switching costs of buyers are high because the supplier concentration is low. Also the threat of forward integration is moderate. So in other words, we can say that supplier power can dominate the industry operations only to some extent.
So the bargaining power of Suppliers depends on the following factors.
· Supplier Concentration: Low
· Number of Buyers: 5
· Switching Costs: High
· Substitute Raw Materials: Low
· Threat of Forward Integration: Moderate
Bargaining Power of Buyers:
An industry’s buyers are individual customers who consume products, as end users & retailer’s are who buy it for selling to customers. The customers and the dealers are the main buyers in the mobile industry. It gives them more bargaining power over the company.
So it can be said that buyer concentration in Bangladesh for telecommunication industry is very high because there are 145 million people living in a very small country. On the other hand, the numbers of suppliers are five. Switching cost for the buyers is moderate to high. There are very few Substitute Services available. Also, threat of backward integration is very low. All of these forces make the bargaining power of buyers very low.
So the bargaining power of buyers depends on the following factors.
· Buyer Concentration: High
· Number of Suppliers: 5
· Switching Costs: Moderate to high
· Substitute Products: Very few in numbers
· Threat of Backward Integration: Low
Threat of Substitute:
Substitutes are products that of different business that can satisfy similar customer needs. In the telecommunication industry, the close substitute is the BTTB land phones & some other new wireless fixed phones. BTTB land phone connections have been there for the last 30 years and so but the mobile phone connection out numbered them in a couple of years. So they are not a big threat now. The new wireless FIXED phones are relatively new in the market so they are not opposing any direct threat to the mobile sector as well. Moreover these phones are targeting some specific segments of the market.
Rivalry Among Competitors:
Rivalry refers to the competitive struggle between companies in an industry to gain market share from each other using price, product design, superior product offering, advertising spending, after sales service & support. The intensity of rivalry among companies in an industry is a function of industry competitive structure, demand condition & height of exit barriers in the industry.
i. Industry Competitive Structure:
It refers to the number & size distribution of companies within that industry. In Bangladesh the mobile phone industry falls under consolidated industry representing a small number of large companies, i.e. –GrameenPhone, AKtel, BanglaLink, CityCell & TeleTalk.
ii. Demand Conditions:
The current demand in the market for connection is very high. On an average every company is launching a new product or extensions every month. Price sensitive customers are really switching connections every time a new package comes out.
iii. Exit Barriers:
Exit Barriers represents investment in fixed asset, high fixed cost, equipment & economic dependence on industry. All the companies entered the market with huge initial investment and strong market commitment strategy. So the exit barrier is very high.
1.11 SWOT Analysis of AKTEL
Strengths and weaknesses are the microenvironment factors influencing a business, which are within the organization. Opportunities and threats are the microenvironment factors that influence all the firms in the industry. This is a very important tool for a company in order to determine the present standpoint of the company.
1.11.1 Strengths
Joint Venture
AKTEL is a brand of TM International Bangladesh Ltd., which is a joint venture of A.K. Khan & Co. Limited of Bangladesh and Telecom Malaysia Berhad of Malaysia. A. K. Khan & Co. Ltd. and Telecom Malaysia Berhad comprise 30% and 70% equity capitals respectively in this joint venture. TMIB started its operation in 1997 after receiving the license in 1996 to operate GSM cellular phone services in Bangladesh. This venture has contributed both the companies the advantage of risk diversification. At the same time, Telekom Malaysia Berhad has gained strong local network through A. K. Khan & Co. Ltd., which is a well-established company based in Chittagong.
Foreign Knowledge Resources
The top-level management of TM International Bangladesh Ltd. by any large, consists of foreign personalities. Most of the departmental heads are from Malaysia, India, Australia, and Sri-Lanka. Because of this mix & match of local and foreign expertise in the company, there is a blend of knowledge. Moreover, the generation of foreign knowledge in the company has enabled the company to compete internationally.
Highly Competitive market
Currently, there are five major players operating in the telecom sector. All the companies have foreign alliance and they are highly competitive except TeleTalk. To keep pace in this extremely aggressive rivalry, AKTEL has adopted an offensive marketing strategy. Operating in such a market and adopting such strategies have given the company an internal competitiveness, which in turn has allowed TMIB to operate in foreign market with giant foreign competitors.
Strong Brand Image
[
TM International (Bangladesh) Ltd. commenced its journey with the brand “AKTEL” in 1997 as the 2nd GSM operator in Bangladesh. Since its inception, AKTEL has established itself into a popular name among the community. Being on of the pioneers, AKTEL has a strong brand image in Bangladesh and people recognize the name instantaneously. This recognition has given the company an added advantage, as TMIB is operating in a very competitive market.
Skilled Human Resource
Because of its attractive incentive packages and strong brand image in the job-market, skilled workforces have grown an interest towards TMIB. This has given the company an extra benefit, as the company can recruit the finest from the pool of employees. Furthermore, TMIB frequently recruits young, enthusiastic, and resourceful employees from reputed academic institutions. It also provides motivation among its employees by offering extra inducements such as: awarding gold medals to best employees of the year, organizing entertainment programs, providing transportation facility etc. These extra services have enhanced employees’ motivation level and loyalty.
[
Non-Political Work Environment
The work-environment of TMIB is very friendly and co-operative. The practice of internal politics is completely absent and there is an orderly co-ordination among the departments. As most of the employees belong to the same age group, there is a harmonization in the organization.
Collaboration with Diverse Companies
TMIB has alliance with diverse companies to support its service offerings. For an example, recently the company has launched a club-membership facility for its post-paid subscribers, named “Club Magnate”. To offer this club-membership, TMIB has collaborated with different companies such as Agora, Malaysia Airlines, Hotel Seagull etc. In a similar manner, TMIB has partnerships with Cineplex, BDJobs, Deshimobile, and Fantasy Kingdom etc. These collaborations have contributed the company in cost-efficiency and super service-offerings.
Collaboration with Financial Institutions
Apart from having collaboration with diverse companies, TMIB also has collaboration with a number of financial institutions. For example, TMIB has affiliations with HSBC and Standard Chartered bank for billing and salary purposes. It also has collaboration with EBL and other banks. Because of maintaining an excellent relationship with these financial institutions, TMIB will get the privilege while taking loans or any type of financial services from these institutions.
Distinctive Service Offers
TMIB has a well-known reputation of being “The First Being Ever” in the country. It has always tried to bring something new and exceptional in the market. There are countless services, which are brought by TMIB under AKTEL brand. Some of the outstanding services are: E-fill, Pulse offer, GPRS (Mobile Internet), Greeting Messages (Fun Dose), buy-one-get-one offers etc. By providing distinct services, TMIB has achieved the status of “Fast Mover”.
Customer Care Base
TMIB has established several Customer Care Centers in major points of Dhaka city, such as Gulshan-1, Gulshan-2, Dhanmondi, Motijheel, and uttara etc. Moreover, it has set up Customer Care Centers in major districts of the country such as Comilla, Chittagong, Sylhet and Khulna. There are 11 Customer Care Centers in total and these centers have allowed the subscribers to get free services even staying in remote places of the country.
Affable Corporate Culture
[
The corporate culture of TMIB is famous for being friendly and positive. The company has a “Thursday Dress-Code” for the employees. It also assembles money from every employee to have tea-break snacks. There is a pleasing synchronization among the staffs, which has built a positive corporate culture.
[[[[
Societal Marketing
TMIB regularly takes part in charity functions and is renowned for donating money in different deprived institutions around the country. The company has already donated money, free-books, free-medicines, and free SIM cards in various schools, madrasas and hospitals. It is also involved in societal marketing advertising. Recently the slogan campaign of TMIB supporting the autistic children has attracted huge attention.
1.11.2 Weaknesses
Poor Work Delegation Structure
[[
The departmental structure of TMIB is not precise and well thought-out. Each department contains several units. However, the units are not separated by well-defined boundaries and it is very difficult to distinguish among them.
Employee Insufficiency
The departments of TMIB do not have sufficient work force to carry on a thorough task. Most of the employees in each unit are loaded with several duties and sometimes it becomes a burden on their shoulders. Lack of employees in each department is an obvious problem of the company.
[[
High Fixed Cost
Telecommunication industry has a high level of fixed costs. TMIB, operating in this industry, also faces such disadvantages. Office rent, network tower maintenance cost, operational cost etc are the fixed costs of the company. These fixed costs do not allow the company to gain the advantage of economies of scale, which is essential for the company to perform well financially. Because of high fixed cost and low economies of scale, the company also has a low reinvestment rate.
[[
High Employee Turnover Rate
As there are four major players operating in the market, it is apparent that each company will try to draw employees from other companies by offering better incentive-packages. This practice has created a high employee turn over rate in TMIB. Every year, lots of competent workers leave the company to join other companies. This has created a major crisis, as TMIB cannot implement any effective long-term strategy.
[[[
Inadequate Network Coverage in Rural Areas
[[[
Presently, TMIB has network coverage in 61 districts. However, most of the upazilas of these districts do not have the coverage. Therefore, despite covering 61 main districts of the country, AKTEL users in rural areas do not get the frequency. This has created a disappointment among the subscriber and hence it is a drawback of TMIB.
Feeble Recruitment Policy
Though TMIB attracts skilled workers from renowned academic institutions all over the country, because of its poor recruitment policy, many undesired employees are hired over desired ones. Sometimes people with objectionable background are hired and sometimes, right people are not hired in right positions. Thus it creates a risk of wasting talents in the company.
[
Dealer Insufficiency
TMIB has only 4-5 authorized dealers and one distributor, which is insufficient for a company, covering network in 61 districts. As a result of inadequate number of dealers and distributors, there is high possibility of Gray Marketing. If the SIM cards of TMIB pass on the hands of unauthorized dealers, it would be very difficult for the company to maintain a consistency in price and quality.
Network Limitation
Call drop, congestion, and poor network connectivity with BTTB result in bad image of the company.
Some Value-Added Services are not successful
Voice mail service hasn’t been proved as lucrative due to language barrier, lack of promotions, lack of know-how about interactive services and also because people are reluctant to speak to a machine. Not only this, usage of short message service is still low due to lack of adequate promotion, lack of knowledge of English and unawareness of handset configuration and un-ergonomic nature of keypad.
[
Commercial Ads are not too creative
The commercial ads of AKTEL are not that much appealing its prospective customers compare to its competitors. Valuable features are not focused in its Ad. AKTEL doesn’t show its competitive advantages through its ads whereas its competitors such as BanglaLink or CityCell have done it effectively.
1.11.3 Opportunities
Incompetent Public Sector
[
Public sector in Bangladesh is not capable of meeting the market demand of prospective phone users. Moreover, the lengthy and bureaucratic process of public offices has discouraged people to use T&T and public mobile phone (TeleTalk). For these inconvenience systems, people in our country have adopted private mobile phone services as an alternative. This is a great opportunity for TMIB to grab this huge market of prospective phone users.
Upward Moving Population Income
[
According to World Bank source, the disposable income of people in Bangladesh is increasing every year. In addition, Bangladeshi market has high mobile phone acceptability. Both the factors are fostering the fact that Bangladesh is a potential market for mobile phone companies. Operating in such a market is a lucrative opportunity for TMIB.
[
Business Diversification Opportunity
[
Operating in telecommunication industry has given TMIB with the opportunity of business diversification in related sectors. Having the expertise in telecommunication field for a long time, TMIB can expand its business phone set business, mobile phone battery business etc.
Easy Entrance to Foreign Market
TMIB has joint venture with a prominent Malaysian telecom company, Telecom Malaysia Berhad. At the same time, operating in an aggressive market has enabled the company to become very competitive. These attributes have permitted the company to have an easy access to foreign market and compete with foreign rivals.
Easy Loan Access
As discussed before, TMIB has collaboration with a number of financial institutions regarding billing and wage-payment purposes. This has allowed the company to have a good relationship with the institutions. TMIB can take advantage of these collaborations and can have easy access to loans and other financial matters.
[[
Full-fledged GPRS Package
TMIB has already brought GPRS in Bangladesh. However, the service is in its initial stage. Since no other company has brought a complete GPRS package, TMIB can take this advantage and bring a full-fledged GPRS package. GPRS is a completely new technology in our country and it is obvious that the package will be a hot cake in the market.
New Strategic Alliances
Strategic alliance in telecommunication industry is not a new phenomenon. All the four operators in Bangladesh have strategic alliances with several foreign companies. TMIB can form new alliances with eminent companies of different countries to achieve higher competitiveness and bring more expertise inside the company.
[[[
Network Coverage Expansion
TMIB has already network coverage in 61 districts. However, most of the upazilas and rural areas of these districts are not under the coverage. In this circumstance, to increase the coverage in remote areas, TMIB can utilize its already established towers. Otherwise, they can set up new towers. Establishing new towers will not be a barrier for TMIB, as the company can form collaborations with GrameenPhone or other operators who already have towers in those areas.
Huge Need for Telecom Service
Current market growth of the telecommunication is significant which arises a great opportunity for the cellular phone companies to grow rapidly. The demand of the cell phone is still increasing. Variety services with most lucrative features made this sector more and more attractive day by day. Recent year’s growth reflects the enormous potential for the development to telecommunications and information technology in the country.
Declining Prices for Handsets
The prices of the mobile sets are declining in Bangladesh that makes an easy gateway for the customers to use cell phones. It will create an opportunity for the telecommunication industry by getting large number of customers. There are some other opportunities, which can be important factors for AKTEL are: Economic growth of Bangladesh, new and better interconnection agreement and future privatization of the fixed network.
1.11.4 Threats
Widest Coverage of GrameenPhone
GrameenPhone has network coverage in 61 districts as TMIB. Yet GP’s coverage is better than TMIB’s coverage, as GP covers all the upazilas and rural areas. Because of the availability of network in distant places and good frequency, GP has a superior brand image to people. This is of course a threat to TMIB.
Political Instability and Natural Calamity
Bangladesh is called red-zone in terms of political risks. The instability of administrative system has resulted in unstable regulations. With the change of Governments, regulations also change from season to season. This volatility has hindered TMIB from making a long-term effective strategy. At the same time, the country also has a high natural calamity tendency. Natural catastrophes damage the network towers situated in different districts of the country.
Recession in the Economy
Mobile phone is still considered as a ‘luxury’ in Bangladesh rather than a necessity. Being one of the developing nations in the world, the risk of recession in Bangladesh is very high and frequent. During the recessions, people are reluctant to invest behind luxury items such as mobile phones. This is a huge obstacle for TMIB to reach all population sectors in the country.
Non-cooperative Telecommunication Regulatory Body
The regulatory bodies in the telecommunication ministry are unfair and biased. Plus, the system itself is bureaucratic and lengthy in Bangladesh. Because of their non-cooperative attitude and injustice, the usual work place of TMIB is slowing down. This is of course a risk to the company.
Customer Resistance against Tariff
Any new tariff or VAT is always a controversial issue to the people of our country. People in Bangladesh are reluctant to accept new tariffs and it takes a long time for them to approve it. In the budget of 2005-2006, the government imposed a tax of Tk 900 on every SIM card, which has created a huge debate and protest among customers. Many of the customers have stopped buying SIM cards. This tax also hindered the mobile operators to maintain a constant price level and to offer attractive packages.
Existing Competitors in the Market
At present, there are four private and one public mobile phone operators operating in the Bangladeshi market. All of the private operators are aligned with foreign companies. These companies are following aggressive marketing strategy and the level of rivalry offers every week at a striking price level. This high intensity of competition in the industry is a major threat to TMIB, as TMIB has to survive this fast paced competition.
Threats of potential New Entrants
Besides the existing competitors, new and large competitors are also trying to enter the Bangladeshi market. Dhabi Group is on the verge of starting their operations soon. Also some other companies like Reliance, Tata etc. are trying to make an entry to our market. These new companies will increase the rivalry in the industry. Potential new entrants can get into the telecommunication market with cost effective approach and take off market shares. New domestic and foreign cellular phone companies can start telecommunication network business. As Bangladeshi people are very much price sensitive it may cause serious problem for AKTEL.
Private T&T Phone Companies
Apart from the new and existing mobile phone operators, competition is also expected from private T&T phone companies. Because of the inadequacy of the public T&T Company, many private companies are coming in the market. These companies are also a threat to TMIB, as they offer similar services at a lower price to customers.
Possible Health Risk from Mobile Phone
Recently, a scientific study has shown that there is high risk of health hazard including brain tumor and cancer from the usage of mobile phone. The study concluded that long time use of mobile phone might cause such diseases and so people should reduce of mobile phone. Though there is no solid evidence of this fact, it has created an argument and panic among mobile phone users. This is naturally a threat to TMIB.
T&T Mobile
T&T is now entering the mobile telecommunication industry. It is now becoming an immense threat to for all other mobile phone operators by providing unfair advantages and cause severe problems.
Reduction of NWD and ISD Call Charge by BTTB
Recently BTTB has reduced its NWD and ISD call charges to promote LAN phone usages. This has affected the mobile phone industry and significantly reflected in the revenue earning of BTTB
Price War
All the five companies operating in our telecom industry are fighting to get the market share in favor of them by cutting price of the mobile phone connection. All competitors are lowering the unit price and also providing pulse facility like AKTEL provides 1-second pulse for post-paid connection and ten-second pulses for pre-paid connection. So all the players in the market have an aggressive attitude, in terms of the pricing strategy.
1.12 AKTEL – Served Market
AKtel is providing the service using GSM 900 technology. Although their transmission quality is not questionable to the consumers, they are behind in terms of network coverage in the countrywide. They have 160 characters SMS interconnectivity with GP and BanglaLink. They have introduced GPRS recently. The post-paid consumers of AKtel are now using GPRS since August 2005.
Besides having the business and family consumer functions, AKtel have information services for their subscribers. But it is not that much intensive like GP. To enhance the post-paid subscriber base, in June 2006 the company launched a new package named ‘Infinity’ with zero line rent and no SIM price and also redefined the regular post-paid package to attract more customers to subscribe to AKTEL post-paid connection.
Primarily AKtel focused on the business users in Dhaka and Chittagong. They did not have any pre-paid service, which is more appropriate for students and general individuals until 2002. Then after by different offers AKtel tried to spread their focus on other customer segments. In 2003 and 2004 AKtel became very popular by giving packages with BTTB connectivity at c