teletalk mobile bangladesh pricing stategy

COMPANY BACKGROUND

Teletalk Bangladesh Ltd., a government mobile company led by Mr. Md. Faizur Rahman

Chowdhury, is one of the most recognized mobile operator companies in Bangladesh. Teletalk

Bangladesh Ltd. started its commercial operation on 31 March 2005 with skyscraping

expectation. Considering the time of operation of other existing operators in this field, this period

might seem to be small, but considering the years of operation of an operator it’s pretty

significant.

It also fulfilled a cherished dream of people who continuously demanded to the government for

such an enterprise. The government started the “Mobile Telephone Project” and Bangladesh

Telegraph & Telephone Board (BTTB) was entrusted with the responsibility for implementing

the same. The Project work started in June 2004 and the network was soft launched on 29

December 2004. BTTB had been able to keep its promise and deliver in time. Teletalk

Bangladesh Ltd. was formed to operate the network installed by BTTB and it has been successful

in operating a standard network and give proper service to the people of Bangladesh. Teletalk

has introduced many attractive packages and all of them have been welcomed by the market.

From the very beginning of its launching, Teletalk got huge popularity as it triggered the true

competition in the market. Within one year, Teletalk has covered 61 districts, 120 upazillas and

most part of the three major highways of the country. However, there is still a long way to pass

for improving its network.

People have high expectation from Teletalk. They expect continuous network coverage all over

the country, prompt customer service, and more value added services, data services of high band-

width etc. from Teletalk. Teletalk must honor its customers by improving its services day-by-day

so that people can realize that even in a competitive scenario, the public sector organization can

achieve remarkable development if they get opportunity.

CURRENT MARKET SITUATION

Teletalk Bangladesh Ltd. was acutely aware about the overcrowded nature of the

telecommunication industry in Bangladesh. At the end of the 2004, there were 4 mobile

operators and Warid was introduced in 2007. At the end of the January 2015, there are 121.86

1 |Teletalk Bangladesh Limited: Pricing Strategy

million mobile subscribers in Bangladesh. The table below is showing the total number of

subscribers in 2015.

OPERATOR SUBSCRIBER (IN MILLION)

Grameen Phone Ltd. (GP) 51.549

Banglalink Digital Communications Limited 31.145

Robi Axiata Limited (Robi) 26.283

Airtel Bangladesh Limited (Airtel) 7.716

Pacific Bangladesh Telecom Limited (Citycell) 1.276

Teletalk Bangladesh Ltd. (Teletalk) 3.890

Total 121.860

Source: BTRC website, 2015

The most remarkable success of Teletalk is the slump in Tariff Structure. As soon as Teletalk

announced its tariff the long-lasting oligopoly between other private mobile operators were

shattered. Healthy competition came into the mobile market causing almost 50%, if not more,

reduction in price both in terms of SIM price and usage rate. The slump in price made mobile

phone affordable even for the low-income group of people. Using a mobile phone soon became a

necessity it is no more a luxury.

The strength of Teletalk was the confidence of the subscribers in the government institution. On

the other hand it’s being the part of government, is probably the biggest weakness from

operational perspective of Teletalk. At a time when people were desperately searching the way

out to get rid of the oligopoly of a few operators, Teletalk started its operation with big bang of

response.

Another good reason for that craze was its flexibility in connectivity with the other operators. It’s

the only SIM, which has such a, versatility of connections having ISD, Economy ISO service

along with both incoming and outgoing connectivity with any of the land phones

PURCHASING THE SERVICE

Teletalk Bangladesh Ltd. start selling their service likes no other mobile operator in Bangladesh.

At first they start a lottery system, where customers have to register in a website and then after


the draw only chosen customers can purchase the SIM. The price of the SIM was 4500 taka.

After few days later, Teletalk sold their SIM to BTTB employees at the same price. After few

months later, the SIM was available to the market. Customers can purchase their service from

mobile store, customer care, electronics and accessories store and some retail store. The price of

the SIM was reduce to 730 taka with 1 month unlimited free internet. When Teletalk launch 3G

internet service they start selling dual SIM at taka 900 with 1 GB internet in both SIM.

VALUE ADDED SERVICE

There are several kinds of value added service that Teletalk provided to their customers to gain

competitive advantage in the market.

Text Messages (SMS): Text messages are a way to selling point of youth. Young people

especially student also corporate person are flexible in sending text rather than talking when it is

busy time.

Voice Message: Teletalk also provide voice message service where customer can send their

voice message instead of text message.

Sports Update: Sports update popular service is value added service. Especially, cricket update

score, customer has to register and send messages to 222 numbers.

SMS: Customer can register for different kind of SMS service such as Jokes, Weather, Taxi,

Horoscope, Quotes, Emergency, and International Weather Forecasting.

Friends and Family (Aponjon): Teletalk promote the friends and family service as Aponjon.

3G SERVICE

Teletalk provide first 3G services in Bangladesh. Teletalk the state-owned mobile phone operator

launched the third-generation (3G) mobile technology on October 14, 2012. The company had

1.4 million subscribers when it introduced the much-awaited 3G mobile technology, for the first

time in the country, on an experimental basis on October 14, 2012.

After three months of launching 3G the Managing Director Teletalk, Mujibur Rahman said, “The

total number of subscribers using Teletalk has reached nearly three million till January (2014).”


He opined that the launching of the high-speed 3G internet service played a vital role in the

progress of the cellular phone operator which had lagged behind in terms of number of

subscribers.

Teletalk 3G prepaid Package

SPEED

UPTO

DATA

VOLUMESUBSCRIPTION FEE USAGE VALIDITY

SUBSCRIPTION

CODE

256

kbps

1 GB Tk.150 10 days D14

1 GB Tk.200 30 days D59

2 GB Tk.300 30 days D15

4 GB Tk.450 30 days D16

512

kbps

1 GB Tk.99 * 30 days D60

1 GB Tk.260 30 days D31

2 GB Tk.350 30 days D20

3 GB Tk.425 30 days D38

3 GB Tk.1000 6 Months D36

5 GB Tk.600 30 days D21

5 GB Tk.300 * 30 days D63

10 GB Tk.825 30 days D22

1 mbps

1 GB Tk.320 30 days D53

2 GB Tk.425 30 days D24

4 GB Tk.750 30 days D25

6 GB Tk.900 30 days D57

8 GB Tk.1000 30 days D26

25 GB Tk.1100 * 30 days D65

30 GB Tk.2500 30 days D33

60 GB Tk.4000 30 days D62

Source: Teletalk Bangladesh Ltd. Website


ADVERTISING

Teletalk first promotional activity is advertising. Advertising is the way where massage could be

delivered to the consumers mind. And this Massage can be delivered to the consumer by the

sound, music, choreography, lighting and performer appearance. Advertisement massage must be

believable, meaningful and distinctive. Advertising can be used to build up a long-term image for

a product and also can trigger quick sales. So that they invest a huge amount of money for

advertise to create a brand loyal customer.

Advertising media

Newspaper

Web site

Magazine

Personal Selling

Teletalk uses personal selling in different stages of marketing and distribution. Company

distributes their product (SIM, Scratch and MB card) among the wholesalers and retailers by

maintaining the excellent relationship.

Sales Promotion

Sales promotion includes a wide way of tools that can attract consumer’s attraction, strong

incentive of purchase, free gifts, discount and several types of occasional program.

PHP sales promotion includes credit sales, commission etc. PHP arrange conference every year

among the dealers, wholesalers and retailers. They always try to influence and convince them for

creating a market demand and sale their product.

Public Relation

Public relation is used to promote products, people, places, ideas, activities, organizations and

even nations. Public relation can also influence a product sales or brand awareness. Teletalk

arrange meeting always with the wholesalers and retailer for maintaining a good relationship

with them.


Place

Place is very much important for product sale. Place depends on good location, transportation

facility, availability, channels etc. and Teletalk select most of the places such as mobile store,

retail store, super store, recharge store and customer care in different places.

THE PRICING DECISION

Over 90% user of Bangladesh is pre-paid users and the carriers’ typically charged less in off-pick

and more in pick hours. In fact, the industry’s pricing were quite rational if customers would

always select the right plan for their usages pattern. However, customer cannot predict their

usage. Teletalk Bangladesh Ltd. studied numbers of customers and found that the price they paid

varied widely. After the study they develop different kinds of attractive offerings.

Teletalk Youth

The most popular offer is the Teletalk youth. Customers can F&F to three numbers to any

operator. Call charge is 4.5 Paisa/Pulse (peak 8am - 12am), 2.5 Paisa/Pulse (off-peak (12am -

8am) and pulse is 5 second. SMS charge is 30 paisa on-net and 40 paisa off-net. There is a fun

pack in this service which charges 8 taka for 20 MB net at 512 kbps speed for 1 day.

Bornomala

This offering is mainly focused on internet packages. The pricing of this offering developed for

customers who are highly involved with internet connection. The internet speed is 512 kbps and

their 30 days validity for every package. There are the kinds of packages,

1. 500 MB (D71) which is cost 70 taka

2. 1 GB (D72) which is cost 130 taka, and

3. 5GB (D73) which is cost 400 taka.

For all packages 15% vat and SD is available. Also, call rate 30 Paisa/min (on-net 24 Hours), 60

Paisa/min (off-net 24 Hours) with 10 sec pulse and SMs charge is Tk. 0.30/SMS (On-net), Tk.

0.40/SMS (Off-net).


Agami

This is special offering for the students who got GPA-5 in S.S.C 2015 and the SIM was totally

free for the selected users. The special offers are 4.17 Paisa/Pulse (24 Hours) to any operator and

pulse is 10 seconds. SMS charge is 25 paisa on-net and 35 paisa off-net. There are three different

types of internet package offerings, daily pack is 20 MB at taka 6, monthly pack is 1 GB at taka

100 and 5 GB at taka 350. For these packages 15% vat and SD is available.

These are now the main price offering of Teletalk Bangladesh Ltd., there are also some other

offers such as, Ekush, Bijoy, Shadheen, Projonmo and Shapla.

SWOT ANALYSIS

A SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats and is a simple

and powerful way to analyze company’s present marketing situation. SWOT Analysis is a

powerful technique for identifying Strengths and Weaknesses, and for examining the

Opportunities and Threats organization face.

Analysis of Strengths

Subscriber inclination to Teletalk as a government owned organization: People have a deep

inclination towards Teletalk. This is because subscribers have more confidence in the

government institution. They think that they might get some extra benefit from Teletalk like

lower call rate, optical fiber facilities etc. rather than other providers.

Teletalk’s all connections are ISD & EISD: It’s a big strength of Teletalk. It’s the only SIM

which has such a versatility of connections having ISD, Economy ISD service along with both

incoming and outgoing connectivity with any of the land phones. This is not seen to other

providers. It gives a tremendous competitive advantage to the Teletalk Bangladesh ltd over its

respective competitors.

Teletalk is the only indigenous company using GSM service: Teletalk is the only local

organization which is providing GSM technology in this country. The other local organization

named pacific telecom is providing CDMA technology which is more expensive. So Teletalk can

take this advantage over its competitors.


It has also provided incoming facility up to 2015: Teletalk have a strong strength over its

competitors in case of incoming facility. Teletalk’s present incoming duration is up to 20015.

Which is 20 times more than other competitors?

From the very beginning it is providing free TNT incoming: Teletalk is the only provider

which is providing T&T incoming free from the very beginning. Whether other operators

providers providing such kind of facility just now.

Moreover its contribution to our economy can be notable: As a Govt. owned company

Teletalk has a strong contribution in our national economy. It’s one of the high profits generating

Govt. organization in Bangladesh.

Low cost provider: The most remarkable success of Teletalk is the slump in tariff structure. It is

the lowest cost provider in Bangladesh telecommunication market.

Analysis of Weaknesses

Premature entrance in mature market: The biggest weakness was a premature entrance in a

mature market. As soon as anyone could catch hold of a Teletalk mobile, he started comparing it

with the services of Grameen, Banglalink or Aktel.

Lower number of human resource: The number of employee of Teletalk is too much lower

regarding its requirement. As a result the service quality and customer satisfaction decreases.

Difference between developed and developing market: Teletalk failed to identify the

difference between developed market and developing market. Their strategy making is not match

with the current situation.

Lower promotional activities: The promotional campaign of Teletalk is not too much strong

like other providers of Bangladesh as result consumers are less aware about Teletalk and its

package.

Weak management system: poor coordination among different functional department of

Teletalk as result service efficiency goes down.

Poor marketing: The overall marketing activities of Teletalk is not much rich like other

competitors.


Lower number of value added service: Teletalk Bangladesh Ltd. is providing a less number of

value added service to its subscriber regarding its competitors. As a result subscribers are

becoming dissatisfied on the Teletalk service. The comparison of value added services of

different operators are mention below. Where Teletalk is providing less number of value added

service.

Analysis of Opportunities

Teletalk can use the image of local and government owned organization: General people

have a deep inclination to the govt. owned organization especially to the local organization.

People want to keep the money into own country. So Teletalk can use such kind of soft corner of

consumers and promote the service to them.

Introduction of new technology and services: Teletalk can implement new and consumer

oriented technology in this sector. This is because of people have inclination to modern

technology. Now a day’s people are ready to accept the new thing.

Expand the market in the rural area: Till now there is huge area is remain out of coverage

where a huge number of target consumers are available. So Teletalk can bring that respective

area under coverage and catch those potential consumers.

Teletalk can use the experience of BTTB: BTTB one of the old and experience organization in

Bangladesh telecommunication sector. They have special experience about the consumer

behavior of Bangladesh. They know about the consumer’s need and want. So Teletalk can take

help from the BTTB about this matter and implement those criteria in the competitive market.

Which things, give Teletalk competitive advantage over its respective competitors.

Teletalk can use soft switch network: The soft switch network separates the bearer and control

layers and a soft switch centric network can be built on different types of bearer networks such

as TDM, IP and ATM unlike, legacy network that depend on a single specific switching

technology. Based on strategic planning and the developmental phase, an operator can select

suitable bearer mode technologies for different phases, from the perspective of long term

sustainable development, the IP centered soft switch network defines the future. So Teletalk can

use this technology and practice competitive advantage over rivals.


Analysis of Threats

Merging of Robi and Airtel: Bangladesh mobile sector is almost saturated. After merging these

two mobile companies (Robi and Airtel) in January this will become a big threat to Teletalk.

The invention of technology which is new modern and consumer oriented: Technology is

changing with day run. It changes the consumer’s demand pattern by offering different attractive

features. As a result consumer shifts from one technology to other technology, which might

create a big problem to Teletalk and others.

Another invisible threat is land phone operator: In Bangladesh land phone operator is

expanding the market with day run. People are switch from mobile to land phone operators. As a

result ultimately the number of mobile user is decreasing and create problem to the mobile

operators as well as Teletalk.

The main goal of Teletalk Bangladesh Ltd is to deliver SIM kits to the subscriber at a cheap rate

and to dominate the competitive market. For doing this the company is trying to plant the seed of

foundation for future profitability. For that company is targeting young people who are the key

of make money. Though the pricing decision is critical but Teletalk Bangladesh Ltd. made

excellent pricing for its customer. They also updating their service keeping eye on the pricing

and delivering it in a smooth and effective way.


teletalk mobile bangladesh pricing stategy

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