Introduction
Origin Scope Objective Limitations
Company Background
Milestones:
November 28, 1996: Received the Cellular license from the Ministry of Posts and Telecommunications, Bangladesh government.
March 26, 1997: Grameen Phone launched its service on the Independence day.
December 1998: Launched the GP-GP service.
September 1999: Launched a unique billing system, EASY which is the Prepaid service.
The shareholders
Grammen Phone has equity of 55 USD. It is divides among four partners of which Telenor is major. The equity structure of Grameen Phone is as below:
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Telenor: It is the state owned telecommunications company in Norway, a country with one of the highest mobile phone densities in the world. Telenor is using the expertise it has gained in its home and international markets and putting it to use in an emerging market such as Bangladesh.
Grameen Telecom: It is a non-profit company registered as per the laws of Bangladesh for attaining certain social objectives.
Marubeni Corporation: It is one of the leading Japanese trading companies.
Gonofone Development Corporation: It was established in New York in the early 1994 for the sole purpose of organizing Grameen Phone.
The major lenders are International Finance Corporation, Commonwealth Development Corporation, Asian Development Bank and NORAD. It has given Grameen Phone loan of 50 USD. It also has preferred shareholders of USD 5 million.
Industry analysis
General environment
Macro-economic:
Grameen phone is doing business across the nation. So macro-economic variables like purchasing power, exchange rate and GDP growth has profound impact on its future. The main source of revenue for a mobile phone operator is not revenue from selling set or line but from call charge. If the overall economic condition is not suitable, then people will cut down their telephone calling. Again currency rate fluctuation affects the price of imported mobile phone sets.
Technological:
As mobile telecommunication is a technology intensive industry it is affected by the latest change in technology. Any change of technology in the areas of information technology, microwave technology, electronics, will greatly change the way mobile businesses operate. To remain competitive heavy investment in cutting-edge technology is required.
Socio-cultural:
Mobile phone is a consumer product. It is therefore heavily affected by the cultural factors. Whether consumers take mobile phone as a fad or luxury or they view it as a necessity and part of their daily life is critical.
Increased trend towards Individualism, educational standards, professionalism etc are some of the changes that are likely to affect the mobile phone industry.
Demographic:
Bangladesh has a large population base. As mobile phone is becoming available and as the per kapita GDP increase the market for mobile phone increases. There is also a large cohort or age group that is finishing education and entering into the working life. After a decade the situation will closely represent the baby-boomers in USA as population growth rate lowers. The increased number of working people will increase the demand of mobile phones like many other consumer products.
Political / Legal
The volatile political climate of Bangladesh has so far affected this industry considerable and we can expect it to influence this at future too. De-regulation on part of the government in giving license has introduced competition in this sector. The first company Hutchison Bangladesh Telecom Limited (HBTL) and then Pacific Bangladesh Telecom Limited enjoyed five years monopoly because of government policy.
The legal environment is also to be keenly noticed. Bangladesh Telephone and Telegraph authority is both acting as a regulatory body and a competitor, which is questioned by critics.
Any change in the current situation, whether positive or negative will greatly influence the industry.
Global
Mobile business does not operate in isolation. Things like ISD, roaming facility in foreign territories forces the participants in this industry to assume a global perspective. Global technological changes like WAP or 3rd generation mobile phone is also shaping the future of mobile telephony.
The size of the industry
The country’s fixed-line telephone network in the public sector is totally inadequate. There are only about 450, 000 fixed-line telephones in the country with 125 million inhabitants. A comparison would make it easier to understand where do we stand.
| |Main telephone lines |Main telephone lines per 100 habitants |
| |1995 |1998 |1995 |1998 |
|Bangladesh |286.6 |387.0 |.24 |0.3 |
|India |11987.0 |21593.7 |1.29 |2.2 |
|Nepal |82.8 |194.0 |0.39 |.85 |
|Pakistan |2127.3 |2757.0 |1.63 |1.94 |
|Nepal |206.0 |523.5 |1.14 |2.84 |
The country’s fixed line telephone network in the public sector is totally inadequate. The number telephones both fixed and mobile- per 1000 people in Bangladesh is only 3 while it is 5 in Nepal, 15 in India, 20 in Sri-Lanka and 25 in Pakistan.
In the past four years the mobile companies have done quite well. They have satisfied the need of 175,000 consumers who need telephone services.
The start up cost of a fixed-line telephone subscription in Bangladesh is also the highest in south Asia. According to the figures published in International Telecommunication Union’ s World Telecommunication Development Report 1999, the start up cost of a subscription in Bangladesh in 1998 was USD 392, in India it was only USD 22, in Nepal it was USD 35, in Pakistan it was USD92 and in Sri-Lanka it was USD 220.
The waiting list for fixed line telephones.
Table
|Waiting list for telephone lines |
| |1995 |1998 |Total Demand |Satisfied Demand |
| | | |1995 |1998(%) |
|Bangladesh |154 |144.9 |522.9 |72.3 |
|India |2277 |2705 |24299.4 |88.9 |
|Nepal |163.5 |215.3 |409.3 |47.4 |
|Pakistan |209.5 |298 |3055.0 |90.2 |
|Sri-Lanka |227.2 |283.8 |807.3 |64.8 |
So there is a huge potential for the telecom sector to grow. International statistics indicate that the total domestic market for Bangladesh is USD one billion. So the Grameen Phone can really utilize this untapped market.
The competitive environment
The competitors (Profile of them)
Market share
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SWOT analysis Strengths Market leader Utilization of railway’s Fiber optic connection International partnership Greater coverage Weaknesses Network problem Technical cannot do the work Billing system problem No market research
Opportunities Untapped market None of the world leaders in telecommunication is targeting this market.
Threats Entry of huge telecom company to penetrate the market World tel is not a threat to the position because the market has the ability to absorb the amount of those lines.
The perceptual mapping
Vision
To be the leading provider of telecommunication services all over Bangladesh with satisfied customers, shareholders and enthusiastic employees.
Mission
To receive an economic return on its investments and to contribute to the economic development of Bangladesh where telecommunications can play a critical role.
Objectives
By the year 2005 98% coverage in Bangladesh.
Company Philosophy
Head to head competition is not expected.
Existing strategies Corporate level strategies Corporate image building through Village phone Other social activities Diversification strategy in the product Business level strategies Strategic alliance
Functional level strategies Marketing Communication strategy Educate Simple Forgiveness Distribution strategy Till now POS is 230 by the year 2000 it is expected to be 250. More and more POS will be done. The entire sale will be through these agents and POS. Media strategy Use of press media Very little TV advertisements
Financial Human Resources Performance based pay High turnover of technical people More than average salary given to deserving candidates Production strategy Marketing decides about it. Technical strategy
Recommended strategies For each of the level of strategies
Conclusion 