zong case.docx

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INTRODUCTION:

In year 2008, Wang Jianzhou, CEO of China Mobile is anticipating that the new brandis not only a brand of the Pakistan branch, but also an international brand for China Mobile,which aims to provide communication among societies.MR. Liu LiDong, Director PMO states,

We are not just mobile operators but information providers for society.

The central idea behind this step is to provide optimized network coverage across widerange. The combination of continued rapid growth in Pakistan's economy, rising consumerpurchasing power and the acceleration of informatization throughout the country is driving atremendous demand for communications and information services.

Irrespective of competitive edge the company wants to maintain strong relationshipwith customers by providing value added services. While elaborating market penetrationstrategies, Mr Jianzhou suggested introduction of more value-added services, like mobile TV,mobile music, news, billing for subscribers specially the young population.

" The fu tur e of our business and telecommunication i s increasingly li nked, and our i nterest in

the telecom field is broad"*Steve Ballmer

HISTORY:

China Mobile Communications Corporation also known as China Mobile orCMCC,officially established on April 20th, 2000,is the largest mobile phone operator in China. It is theworld's largest mobile phone operator ranked by number of subscribers, with over 380 millioncustomers.

China Mobile is the largest company registered in Hong Kong and it is headquartered onQueen's Road. It is also the largest market capital company listed in the Hong Kong StockExchange. After many years of efforts, the company has established a comprehensive networkwith large coverage, high quality, rich variety of businesses and first-class customer services. Itranks the first in the world in terms of the network scale and the customer base.

China Mobile has successfully attracted investment from the international capital marketwith its sound performance and great development potential. Being included in the Fortune Top500 for 5 consecutive yeas, the firm's latest ranking is No.224.It also ranks the 4th and 2nd in theTop 500 Chinese Enterprises in terms of its overall strength and service provision respectively bythe China Enterprise Confederation and China Enterprise Directors Association in 2005.

Looking forward, the company defines its strategic goal of "becoming a worldwide leaderin the telecommunications world and achieving leapfrog evolution from excellence topreeminence.


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In 2006, by seizing favorable market opportunities, the Group further expanded itssubscriber base, implemented brand management, enhanced sales and marketing efficiency andinnovated its business models.

The Group placed emphasis on developing its core competencies for its future

development, on maximizing the growth potentials of new customers, value-added business andvoice usage volume and on building a low-cost and effective business model in the rural areas.These have greatly enhanced the Group's operational results and led to a rapid, sustainable,steady and harmonious development of the business.

Factors Annual Growth Rate

End of 2006, Groups subscriber: 301.232 million 22.1%(nearly half of the growth was from

Aggregate usage volume: 1,252.15 billion minutes 38.6%

No. of value-added business users: 270.384million

30.8%

SMS usage volume 353.38 billion messages 41.6%

Revenue from value-added business: RMB69.309 billion 38.1%

Revenue from value-added business accounted: 23.5percent of Group's operating revenue

Increase of 2.9% points from 2005.

CMPak or Paktel Limited:

CMPak or Paktel Limited formed in 1990 is a 100% subsidiary of China Mobile. Thepioneering oversea setup of China Mobile came through acquisition from a license from Milliconto operate a GSM network in Pakistan. granted license to carry out cellular phone services inPakistan, set up by Cable & Wireless. 7 Millicom Corporation, owners of Instaphone, sold Paktelfor $284 million to China Telecom.

It has invested more than US$ 700 million in the telecom sector in Pakistan and anadditional US$ 800 million will be invested till the end of year 2008. The companys edge comesfrom the experience and expertise of running the world's largest telecom service and thecommitment they make to setting quality and customer relations standards.

It is determined to make its mark in the Pakistani market and to change the way peoplecommunicate. It market its products under the brand name "ZONG"

ZONG:


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Zong is the first International brand of China Mobile being launched in Pakistan onApril5, 2008. It is meant to empower and liberate the people of Pakistan in every nook andcorner of the country.

The core essence of ZONG is to allow people to communicate at will without worryingabout tariffs, network coverage, capacity issues or congestion. It will be supported bygroundbreaking communications, trend setting customer service and an unmatched productoffering, which will redefine rules of the game and establish ZONG as a serious contender forthe number one spot.

The brand would offer its customers with entertaining & innovative value addedservices and will empower them by giving a wide variety of products & services.

BUSINESS STRUCTURE:

Marketing

Zong campaign has taken a fresh, bold and humorous approach to marketing. Itsadvertisements reveal both the culture of country and feelings of customers. It uses comparativesales and marketing approaches across multiple customer groups. Within each area the sales andmarketing force are divided among various customer groups to meet their specific needs.

Customer Service

The beacon of Zongss impression and torch bearers of a new era in customer interaction,taking customer service into a portal of customer excitement. These are the doors to Zongs first

and foremost realization of its promise to excite customers with a new trend in service. Settingthe tone and ambiance which is second only to your home, these are Zongs arms across thecountry to welcome everyone to experience the comfort when a true promise is fulfilled.

In order to gain customer attention it has offered amazing and attractive packages.

With ambitious plans to cater to the fastest growing Pakistani market and to win over theever-demanding Pakistani customer, Zong is trying to offer unprecedented coverage. Zong dontwant to be a price killer but focus on providing differentiated plus Quality oriented and ValueAdded Services (VAS).

Qual ity in a service or product is not what you put into it .I t is what the cli ent or customer getsout of it.*Peter Drucker

Currently the Zong has generated 28% of revenue in the market.

The goal as a company is to have customer service that is not just the best, but legendar y.*Sam Walton


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Human Resource:

Like other organizations, Zongs productivity and performance is based on strongworkforce, The Human Resources (HR) Department develops initiatives and provides strategic

support to top management with regard to human resources policy.Main areas of responsibility include manpower planning, organizational development,employment and association conditions, recruitment, job classification and salary administration,performance appraisal, advancement, internal mobility, training and development, socialservices, social security, working conditions, settlement of disputes and relations with thepersonnel.

Infact, they are serving as one of the most valued and respected departments in theorganization; their job is people, and people are the company's most important asset.

Telecom

Zong has implemented GSM and EDGE (Enhanced Data rates for GSM Evolution)technologies to provide data transmission technology for high-speed transfer of large amount ofinformation (voice & data services) across mobile networks. For this It emphasis on the need ofoptimized network coverage for efficient communication.

Finance:

Finance Department is responsible for handling all financial matters in the environmentof Zong.All these activities are in compliance with Financial Rules and Regulations. Thedepartment plays an important role in the decision-making purposes to assist management in thedefinition of policy and in the running of the organization.

It aims to provide the internal and external users of financial statements with timelyaccurate and relevant information. Furthermore, it also ensures that the necessary financialcontrol is adhered to in order to safeguard the assets of the organization.

INTERNAL FACTORS

Policies Updation:

In organizational culture of Zong, Policies is updated whenever required or a new issue is

faced. Meetings are arranged and a circular is issued to inform others about that change. TheCompanys Long-term strategic issues depends on the results of strategies being implemented.

Social Responsibility:

After Oct.8th, 2006 earthquake China Mobile has put considerations for thereestablishment of educational institutions in AJK. Now ZONG has planned to activelyparticipate in the projects of society welfare.


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Communication Gap:

Zong wants to constitute a successful working environment and a strong base ofcommunication in an organization so there would be no communication gap between

management and employees.

Installation:

In order to run in dynamic environment Zong has specifically pay heed on innovativeideas to provide the best of their services to consumers. But side-by-side they are facingdifficulties to implement Fibre Network because of high installation cost and lack of resources.There is a need for more customer services channels and call centers to provide maintained &improved level of customer services.

COMPETITORS:

Current and potential competitors in telecom sector include local operators that areproviding services prior to Zong. Several of these companies have a strong market presence,brand recognition and strong customer relationships. All these factors derive market competitionand infact all of them are in highly competitive climate.

Mobilink:

ZONGS one of the largest competitor is Mobilink. Its a subsidiary of Orascom Telecom,started its operations in 1994, and has become the market leader both in terms of growth as wellas having the largest customer subscriber base in Pakistan - a base of over 30 million andgrowing. They are providing state-of-the-art communication solutions to the customers.

It offers exclusively designed tariff plans that cater to the communication needs of adiverse group of people, from individuals to businessmen to corporates and multinationals. Boththe postpaid (Indigo) and prepaid (JAZZ) brands are the largest brands of their kind in thePakistan cellular industry.

In addition to providing advanced voice communication services that makes the lives ofmillions that much easy, it also offers a host of value-added-services to customers. Mobilinkplaces high importance to its coverage in almost 8000+ cities and towns nationwide as well asover 120 countries on international roaming service.

Ufone:

Ufone (Established in 2001) is also a cellular operator. Despite the stiff competition inPakistan telecom market which has led to reduction of prices to bare minimum level, due to itsaggressive policies and exercising strict control over expenses the Company managed to improveits revenue and after-tax profit by 87% and 54% respectively.


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It provides services with wider coverage, superior connectivity, clear signals & voice

quality. Covering over 3475 key destinations it allows seamless roaming through the networkproviding the best nationwide coverage.

Ufone, being one of the leading cellular service provider has recently launched its servicein many new cities. Keeping up with its pace it is rapidly expanding its network. It keeps onadding new cities with same superior network that continues to expand.

Warid:

Warid Telecom is the fastest growing GSM mobile company in Pakistan with over 13million subscribers and coverage in more than 245 cities all over Pakistan. As per companypolicy, Warid Telecom's cities are only included as a coverage destination when cell sites alongwith a fully functional sales and service center or franchise is operational in the area. This resultsin premium connectivity and the optimal experience for users.

Telenor:

Telenor Pakistan launched its operations in March 2005 as the single largest directEuropean investment in Pakistan, setting precedence for further foreign investments in thetelecom sector. The company has covered several milestones over the past twenty eight monthsand grown in a number of directions, grown to become a leading telecom operator in the country.In fiscal year 2006, they achieved nearly 200% growth in subscriber base the highest in theindustry by a wide margin.

Its the fastest growing mobile network in the country, with coverage reaching deep intomany of the remotest areas of Pakistan. In the most difficult terrains of the country, from thehilly northern areas to the sprawling deserts in the south.

Its keeps on moving ahead by investing heavily in infrastructure expansion.It is spread across Pakistan, creating 2,200 direct and 20,000-plus indirect employment

opportunities. They have a network of 15 company-owned sales and service centers, more than200 franchisees and some 100,000 retail outlets.

EXTERNAL ISSUES:

Zong has payed high taxes (per activation require Rs.500) due to Government regulationsand policies. Day by day market strategies are varying where regulation in telecom services,directly affect commercial and bilateral relationships of partner countries.

On the other hand, it is striving hard to understand consumer psyche as they are keytarget of the company. Infact, due to lack of transmission resources company is facing hurdles atthe first step but being optimistic it is much focused on future. One of the main hindrance is anelectricity shortage. The operations are getting effected due to these shortcomings; somehow, itson the way of prosperity.


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Pakistans Economy:

Pakistan is a nation with a diverse economy that include agriculture, textiles, chemicals,food processing and other industries. The economy has suffered in the past due to internal

political instability, mixed levels of foreign investment, orbitrary and non transparentapplications of government regulations, inadequate infrastructure, and a costly, ongoingconfrontation with neighboring India.

GDP growth, spurred by gains in the industrial and service sectors, remained in the 6-8%range in 2004-06. In 2008 estimated GDP growth rate is 6.9% .Inflation remains the biggest threatto the economy, jumping to more than 9% in 2005 & 7.9% in 2006. These economic factors hasstrongly influenced on consumers and business. Consumers buying power got confused becauseof the economic challenges that the coutry faces

CUSTOMERS:

According to customers Zong has great potential in the market if it adopts a flexible andclear policy in cost and ensures quality services to the customers. Any hidden charges/ratesshould be discouraged and customers should be kept aware and inform of all facilities and theirrates. They are expecting more from ZONG than other cellular companies.

Customers are aware of Zongs motive to resolve the complain instead of competingother mobile companies. It also seems to be the embassadar of China-Pakistan friendship.

FUTURE:

Describing future plans of Zong, the Companys CEO said, Pakistan is the right choicefor international expansion and we will continue to improve and strengthen our network and ourfuture investments will depend on our financial performances.

As investors, he highlighted, We will be investing another $800 million and hope wecan get preferential policy as foreign investors.

Zong will focus on innovations and new business model development. It will direct itselftowards the next generation mobile telecommunications network and technology, including closemonitoring and tracking. The firm is looking for highest position in market by opening newchannels & improving network quality with larger coverage areas. They are also planning fornetwork expansion programs for swift communication.


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