STRATEGIC MANAGEMENT ANALYSIS

UFONE OF PAKISTAN CELLULAR INDUSTRY 28 DEC 2011

SEQUENCE OF PRESENTATION
An overview of Pakistan Mobile Industry Vision Statement of Ufone Mission Statement of Ufone Analysis of Mission Statement IFE Matrix EFE Matrix CPM Profile SWOT Analysis/Matrix SPACE Matrix

AN OVERVIEW OF PAKISTAN CELLULAR INDUSTRY

5 M cellular subscribers in 2004 Now 108.89 M subscribers in 2011 Initially Voice was the focus Now Data & VAS are also the focus 3G licensing policy under active considerations Cellular Tele density increased from 3.3% (2004) to 62.5% (2011) This means 6 out of 10 people own cellular connection Coverage of about 92% of the land area More than 10,000 cities/towns/villages are under the umbrella of cellular services PTA is the regulatory authority

Ufone Profile
Pakistan Telecommunication Company Limited(PTCL),a wholly owned subsidary of PTCL Started its operations in 29 Jan 2001 under the brand name of Ufone As a result of PTCLs privatization,Ufone became part of Emirates Telecommunication Group (ETISALAT) in 2006

Competitors of Ufone
Mobilink, the Pakistani unit of Egypt-based telecommunication company Orascom. It has been operating in Pakistan since 1994 with 31% market share now Norweigen Telenor, has started its operations in 15 Mar 2005 with 21% market share now Warid, owned by the Abu Dhabi group of the United Arab Emirates and sister-concern of Wateen group started its operations in 15 May 2005 having a billion dollar investment in Pakistan. About 17% market share CM Pak(Zong), formerly Paktel, was the latest target of foreign acquistion. After it got acquired by China Mobile,it was renamed as Zong, having 6% market share

Cellular Subscribers Market Share Dec 2010

17% 6% 25%

21%

Cell Sites
The hallmark of the success of any service pertain to its geographical presence and coverage in a country All mobile operators have collectively erected 30,169 cellular sites by end 2010 in different geographical locations of the homeland

Vision Statement
To be the leading telecommunication services provider in Pakistan while exceeding shareholders value and employee expectations

Mission Statement
To be the best cellular communication option for U. We aim to provide U with quality coverage, superior connectivity, clear signals and voice quality. where ever U are, U-fone keeps U connected

Mission Statement Analysis

Customers Product/services Markets Technology Concern for growth/survival Philosophy Self-efficacy Concern for society Concern for employees Y Y Y Y N N N N N

Proposed Mission Statement

To be the unmatchable mobile system of communication in Pakistan, thus providing the best values to our customers, employees, business partners and shareholders

Ufone Product Line

Prepay

Postpay

Ufone Packages & Offers

Prepaid Packages U-Won Uth Package Ladys Package Kisan Package Panch ka Pandra Bundle offer SIM lagau offer U-fone member banau offer Prepaid Roaming International MMS U Share U Loan Sau Par do Sau Postpaid Packages Supplementary Connection Boundless Roaming Black Berry U-fone Conference Call International MMS IDD Bucket Ur Edge

Internal Factor Evaluation (IFE Matrix)

Sr No Strengths Weight Rating Score

1
2 3 4

Network Coverage (Geographic)

International Roaming Pioneer of MMS/GPRS License for AJK & NAs

.08
.06 .04 .02

4
4 3 4

.32
.24 .12 .08

5
6 7 8 9

Quality Coverage (Connectivity)

VAS Lowest Prices 2nd Largest Market Share Representation of PTCL (as subsidiary) 4= Major Strength 3= Minor Strength

.09
.05 .10 .08 .03

3
3 4 3 3

.30
.15 .40 .24 .09

Internal Factor Evaluation (IFE Matrix)

Sr No 1 2 3 4 5 6 7 8 Weakness Behind on Excessive Demand Poor Organizational Structure Stagnant Profitability Overly Dependant of PTCL Lack of Franchise Lack of Innovative Services Competition Internal Problems Weight .02 .05 .04 .04 .07 .08 .10 .05 Rating 1 2 1 1 1 2 2 2 Score .02 .10 .04 .04 .07 .16 .20 .10

Total
1= Major Weakness 2= Minor Weakness

1.00

2.67

External Factor Evaluation (EFE Matrix)

Sr No 1 2 3 Opportunities Can target Corporate Sector Global Expansion Publicity & Marketing Weight .10 .10 .10 Rating 4 3 3 Score .40 .30 .30

4 5
6

Develop new VAS Develop Franchise in NA/Remote Area

Competitive International SMS/MMS Packages 4= Superior Response 3= Above Average 2= Average 1= Poor

.10 .08
.06

3 1
2

.30 .08
.12

External Factor Evaluation (EFE Matrix)

Sr No 1 2 3 4 5 6 7 Threat Govt Interference Dependency on PTCL Cellular License Pension payouts Increased Health Care Cost Tough Competition Pressure Groups of Towers Economic Problems TOTAL 4= Superior Response 3= Above Average 2= Average 1= Poor Weight .05 .05 .08 .08 .09 .02 .09 1.00 Rating 2 2 2 2 4 3 4 Score .10 .10 .16 .16 .36 .06 .36 2.80

Competitive Profile Matrix (CPM)

Critical Success Factors (CSF) Market Share Growth Rate Financial Strength Management Mobilink
Weight

Ufone

Telenor

Zong

Rating Score Rating Score 4 2 3 4 .60 .20 .24 .48 3 3 2 3 .45 .30 .16 .36

Rating Score
3 3 3 3 .45 .30 .24 .36

Rating Score
1 3 3 3 .15 .30 .24 .36

.15 .10 .08 .12

Advertising & Marketing

Brand Name Price competitiveness

.10
.10 .07

3
4

.30
.40

4
3

.40
.30

3
3

.30
.30

3
2

.30
.20

Packages & offers .09

2
2

.18
.14

3
4

.27
.28

3
3

.27
.21

2
3

.18
.21

Network Coverage
Connectivity Total

.10
.09 1.00

4
3

.40
.27 3.21

3
3

.30
.27 3.09

3
3

.30
.27 3.00

2
2

.20
.18 2.32

SWOT MATRIX
Strength SO Strategies 1. Market Development : Expansion of work in AJK & NA (S1, S4,O5) Oversees Market Development (S2,S3, O2) 1. Product Development: Introduce innovative VAS (S5,S6,O1,O4) ST Strategies 1. Market Development: Expansion plan for AJK & NAS for enhanced coverage (S1,S2,S5,T3,T4,T5) Weakness WO Strategies 1. Market Penetration: Target Corporate Sector Increase market share by making postpaid attractive (W3, W7,O1) Open more franchise in Remote areas (W5,O5)

Opportunity

Threat

WT Strategies 1. Maket Development Build more infrastructure and franchises in AJK/NA/remote areas (W1,W5,T2,T5)

SPACE Matrix
Financial Strength (FS) Revenue 4 Operating Income 3 Assets 5 Equity 5 Competitive Advantage (CA) 2nd Largest Market Share Lowest price Product Line Network Coverage -2 -1 -3 -3

Avg = 4.25 Industrial Strength (IS) Growth Rate 6 Increased Competition 4 PTCL Backing 5 Profit Potential 3
Avg = 4.50

Avg = -2.25 Environmental Stability (ES) Economic Recession -1 Rate of Inflation -2 Govt Regulations -2 Competitive Pressure -4
Avg = -2.25

SPACE Matrix Calculations

Internal Factors: Financial Strength (FS) Competitive Advantage (CA) FS & IS Values: +1 worst to 6 Best CA & ES Values: -1 Best to -6 Worst Calculation: X-axis = IS + CA = 4.50 2.25 = 2.25 External Factors: Industry Strength (IS) Environmental Stability (ES)

Y-axis = FS + ES = 4.25 2.25 =2

SPACE Matrix
Conservative

FS

Aggressive
Market Penetration Market Development Product Development (+2,+2.25) Diversification

CA
Defensive
Competitive

IS

ES

Recommendations
After going through the strategic analysis of Ufone, we recommend Ufone management a combination of Market/Product Development and Market Penetration strategies generally and particularly for Postpay

THANK YOU

BCG Matrix
Market Growth Rate (Cash Usage) LOW HIGH

PREPAY

POSTPAY

HIGH

LOW Relative Market Share (Cash Generation)