Introduce Airtel In Somalia

BY:- Ram Choudhary Guide by :- Jitendra Sharma

Somali Background
Somali in Brief
Population:
8 10 Million

Economy:
Livestock, trade, agriculture

Politics:
unstable over 18 years

SomaliREN has 7 participating Tertiary institutions across the three zones of Somalia:
Somaliland Puntland South-Central Mogadishu

Geographical & Demographical

Agriculture - products: bananas, sorghum, corn, coconuts, rice, sugarcane, mangoes, sesame seeds, beans; cattle, sheep, goats; fish Natural resources
uranium and largely unexploited reserves of iron ore, tin, gypsum, bauxite, copper, salt Urbanization: urban population: 37% of total population (2008) Languages: Somali (official), Arabic, Italian, English GDP (purchasing power parity): $5.896 billion (2010 est.) GDP - real growth rate: 2.6% (2010 est.)

Climate: principally desert; northeast monsoon (December to February), moderate temperatures in north and hot in south; southwest monsoon (May to October), torrid in the north and hot in the south, irregular rainfall, hot and humid periods (tangambili) between monsoons

Industries: a few light industries, including sugar refining, textiles, wireless communication

Economy-overview:

Despite the lack of effective national governance, Somalia has maintained a healthy informal economy, largely based on livestock, remittance/money transfer companies, and telecommunications. Agriculture is the most important sector with livestock normally accounting for about 40% of GDP and more than 50% of export earnings. Somalia's small industrial sector, based on the processing of agricultural products, has largely been looted and the machinery sold as scrap metal. Somalia's service sector also has grown. Telecommunication firms provide wireless services in most major cities and offer the lowest international call rates on the continent. In the absence of a formal banking sector, money transfer/remittance services have sprouted throughout the country, handling up to $1.6 billion in remittances annually

Reason for selecting Product & Company for that market

Great opportunity to introduce this service Less competitors Telecom sector growth in somalia Not many option to introduce any other product and service

Company 4ps

Product Airtel Pre-paid Airtel Post-paid Multimedia messaging service (MMS) SMS based Information Service Voice Mail Service GPRS

Price Customer based pricing strategies. Flexible pricing mechanism Controlled by TRAI.

Place It has wide and extensive presence even in the remotest areas. Airtel Customer Care Touch Points. Distributors like E.g. Paan shops, grocery stores, chemists, outlet etc.

Promotion Large scale print and video advertising. Big celebrities. Provides innovations such as movie premiers, music services such as ring back tones & many more.

Industry analysis

The sector is very tough; the political instability makes it hard to project on the growth of users.
Only 25.09% of population are cover by telecom sector from 9.9 million population. Rank Operator 1 SOMAFONE 2 Nationlink Hormuud 3 Telecom 4 Telsom Mobile 5 Golis Telecom Somalia Technology GSM GSM GSM Subscribers (in millions) 0.201 0.139 0.133 Ownership Somafone FZ LLC Bintel Hormuud Telecom Somalia Inc

GSM GSM

0.125 Not Yet Available

Telsom Mobile Somalia

Golis Telecom Somalia

Key Success Factor & USP Strong brand name, superior quality products and an enviable distribution network It has a clear and well defined organization stucture and limits of finacial authority Companys bottom line falls victim to the bloated and highly paid workforce, which affects its margins Recognized Brand

Competitor 4ps In Somalia there are major four player in telecom sector SOMAFONE Nationlink, Hormuud Telecom, Telsom Mobile

Product
Pre-paid, Post-paid Multimedia messaging service (MMS), SMS based Information Service Voice Mail Service, GPRS

Price Customer based pricing strategies. Flexible pricing mechanism

Place It has wide and extensive presence even in the remotest areas. Airtel Customer Care Touch Points. Distributors like E.g. stores , grocery stores, chemists, outlet etc. promotion Large scale print and video advertising, Some local celebrities, sales propotion

Marketing plan
4 Ps in international market Product modification must be brought about in AIRTELm in terms of quality Place the brands must be made available easily in ,pco and general stores Price Customer based pricing strategies. Flexible pricing mechanism Promotion free samples, catalogues should be distributed among customers promotional activities like advertisements and

Competitor strategies and there work

the telecom companies haven't competed only for customers. They have also cooperated with each other to maintain their networks and set prices to ensure that competition doesn't become too cutthroat. Introduse and offer customer base offer Make public relation Addvertisement and No Government, No Taxes, No-Man's Land

Entry strategy that apply by the airtel

Intuitiveness:
A commitment to a spirit of intuitiveness in all of its business activities is what makes unique among other companies.

Experience: Numerous projects and long history have given it the additional knowledge that can only come from experience, enabling it to provide better service to its customers. Quality: Executives and employees insist on achieving and maintaining the standards in technological expertise, customer service and business relations. Respect: Respect for opinions and ideas are essential to maintain a progressive environment. Team Work: Realizes that the increasing complexity of business and technology requires a combined effort on the part of all employees to maintain a competitive edge.

STP Design

Segmentation of airtel Region wise East Region (Mogadishu, banaadir, hargeisaetc) West Region (baidoa, kesmaayo, kesmaayo etc) South Region (burco, galkayo, jowhar etc) North Region (borame, berbera, marka, bosaso, buale etc) Central Region (baraawe, baardheere, garowe, laascaanood. Badhan ) Area wise

Target

Income wise Age group 18 to above

Airtel has targeted the premium and upper middle class

Students and young group

Positioning

A lifestyle revolution and a status symbol The emphasis is to remove misconception that the cell phone is an expensive means of communication Its a day to day use commodity and is no more a symbol of stat
Brand Identity

Provide better Services

Marketing Strategy

Tower So per rented tower cost is 6253.93 SOS per month. 40 towers in Somalia (62539.3*40) = 250157 SOS per month Retail distributer 20distributer in Somalia in Somalia all competitor provide a 1somali Currency charge per mint. But Airtel provide in 0.60 Somali per mint.

Distribution Direct sales of SIM card sales persons (46904.5 SOS per month) Distribute Airtel Sim by distributer and in all mobile shop (7817.42 SOS per month)

Free distribution of sim (3908.71 SOS per month)

Campaigns (4690.45 SOS per month) Promotion Advertisement Radio = 15634.8 SOS per month T.V = 469045 SOS per month Hoardings= 31269.6 SOS per month BRAND NAME AIRTEL LOGO SYMBOL In Blue Color Airtel logo

Entry Location Cities

City

Country

City Population

Urban Area Population

Mogadishu

Somalia

1183100

1183100

Hargeysa

Somalia

231000

231000

Berbera

Somalia

213400

213400

Kisimayo

Somalia

201600

201600

Marka

Somalia

173100

173100

Other expanses Salary of staff Marketing team=781742 SOS *12= Finance staff = 156348*12 = Administration= 156348*12 = Miscellaneous expenses= 79040.79*12= 9380908 SOS 1876181 SOS 1876181 SOS 938090 SOS

Estimated cost of one city

License & Consulting Fee Site Search & Evaluation Lease Negotiations Real Estate & Leasehold Improvements, Design & Development Machine, Computers Equipment, Furniture & Signs Point-of-Sale System Installation Freight Salary of emplyee Equals Estimated Investment Costs Equals 144245 151130 SOS 78885-85000 SOS 4730-5500 SOS 4730 SOS 55000 SOS 900 SOS 788920.19 SOS

473336.93 SOS

I assume that investment cost will be increase by 10 % every year and profit will 30% of total investment.

Investment 1st year total investment budget 2012 =9455569.23 SOS 2nd year total investment budget 2014 =12605638 SOS 3rd year total investment budget 2014 =17331866 SOS

10% profits 945556.9 SOS 1260563.8SOS 1733186.6SOS