Letter of Transmittal

Respected Ma`am,

We hereby present our group report on “Ufone” assigned by you as a mandatory part of

our course. In this report we have tried to put in our best efforts by collecting data from various

sources such as market research, interaction with potential customers, we learnt how do design

marketing strategies, how to face competition and the tactics we have to keep in mind to gain the

market share.

Though we have tried our utmost, but still humans are prone to errors. It was a great

learning experience .We hope this report would be to your liking. If you have any further queries,

we will please to satisfy.

Sincerely

Acknowledgement

We would like to take the opportunity of thanking Miss Farah our course instructor of Marketing

Management for giving us his time assistance required in successfully preparing this report. Your

guidance and monitoring throughout the semester and during the course of the study was not only

helpful but also encouraging. The target would definitely have not been achieved without your

support. A lot of new concepts, ideas and issues came to our knowledge during the course of the

report which gave us an excellent opportunity to learn, and the research conducted would be

extremely helpful in the future.

Executive Summary

The basic purpose of this report is to compare two brands and design strategies keeping the

competitor in mind. In this report, we have collected information about the brand under our

observation and the competitors.

In this report, we have worked on the external and internal analysis, industry and competitor

analysis, pricing and promotional strategies of Ufone and compare with its competitor.

In the last part of this report we have suggested ideas and strategies with the help of which we can

pre-empt the competitor and novice ideas that will help us in increasing our share.

Ufone

Type Private

Genre Subsidiary

Founded January 29, 2001

Founder(s) Pakistan Telecommunication Company Ltd

HeadquartersIslamabad, Pakistan

13-B, F-7 Markaz

Area served2336 cities of Pakistan, GT Road, Super

Highway & Motorway

Key people Abdul Aziz, CEO

Industry Telecommunication

Products Pre Pay, Post Pay

Revenue Rs.5.1 billion PKR (first quarter 2006-07)

Parent PTCL Pakistan

Website www.ufone.com

Ufone GSM is a Pakistani GSM cellular service provider. It is one of six GSM Mobile companies

in Pakistan and is a subsidiary of Pakistan Telecommunication Company. The company

commenced its operations under the brand name of Ufone from Islamabad on January 29 2001.

Ufone expanded its coverage and has added new cities and highways to its coverage network.

After the privatization of PTCL, Ufone is now owned by Etisalat.

PTML is a wholly owned subsidiary of PTCL established to operate cellular telephony. During

the year, as a consequence of PTCL’s privatization, 26% of its shares were acquired by Emirates

Telecommunication Corporation (Etisalat). Being part of PTCL, the management of Ufone has

also been handed over to Etisalat. During the year July 2005 to June 2006, Ufone continued on

the path to success. The Company further expanded its coverage and has added new cities and

highways. Ufone has network coverage in more than 750 cities, towns and across all major

highways of the country.

During the year Ufone successfully completed the network expansion of Phase 4 in existing as

well as in new cities and towns which amounted to more than US Dollar 170 million. As a result

the asset base of the Company has increased from Rs. 20 billion to Rs. 27 billion.

During the year Ufone adopted the policy of simplified tariffs with no hidden charges, which

resulted in positive impacts on the usage trends of subscribers as well as total subscriber base,

which has increased from 2,579k in June 2005 to 7,487k in June 2006. Ufone currently caters for

international roaming to more than 195 live operators across 119 countries and introduced

International roaming facility for Prepaid subscribers in Saudi Arabia, United Kingdom, United

Arab Emirates, Singapore, Portugal and Kuwait with lowest rates, featuring no security deposit

and activation charges. GPRS Roaming facility is available with more than 75 Live Operators

across 59 countries.

The company has also been awarded a new License for providing cellular services in Azad

Jammu & Kashmir and the Northern Areas.

Operating Performance Ufone’s operational performance has been very encouraging. Despite the

stiff competition in Pakistan telecom market which has led to reduction of prices to bare

minimum level, due to its aggressive policies and exercising strict control over expenses the

Company managed to improve its revenue and after-tax profit by 87% and 54% respectively, as

compared to last year.

Future Plans keeping in view the growth potential of the cellular industry there is no option but to

be aggressive in order to remain a potent force in the cellular industry. In order to extend cellular

network to new cities, towns and highways and enhance its current installed capacities in existing

cities, Ufone has finalized a huge network expansion contract amounting to about USD 550

million, which will enhance the subscribers’ capacity by 10 million. This is the largest ever

expansion project of Ufone.

A strong focus will be on maintaining high quality of service, which is always a benchmark of

Ufone, increasing usage and exploring new revenue streams on value added services, market

visibility through various market initiatives to fulfill subscribers’ satisfaction and demand and

above all to increase the value of investment for the shareholders.

Under the agreement, Huawei will provide its future-oriented EnerG GSM solution to expand

Ufone's network to cover over 2200 cities, towns, villages and all major highways in the country.

The network also allows Ufone subscribers to enjoy high-speed wireless data service.

The GSM contract for Ufone also include Huawei's new generation GSM dual density BTS that

feature high integrated and receiving sensitivity to improve the network performance and lower

the cost of network construction and O&M expenditure. In addition, Huawei will provide Mobile

Softswitch solution based on the advanced R4 architecture to satisfy Ufone's network expansion

requirements, enables the telecom service provider to evolve into 3G smoothly. The growth of the

cellular sector in Pakistan can also be attributable to good governance policies of the government

of Pakistan and the Privatization Commission. In April 2006, Emirates Telecommunication

Corporation, which is commonly known as Etisalat, has assumed management control of Pakistan

Telecommunication Corporation Ltd – part of the $2.6bn deal to buy a 26% stake in PTCL. The

successful privatization of PTCL, and consequently Ufone, is hailed as ushering in a new era for

telecommunications in Pakistan.

Now, under the management of Etisalat, Ufone will concentrate on customer needs and benefits

and is more determined than ever to be the leading cellular player in the market. Ufone has been

known for providing superb propositions and quality service to its customers. With the new

expected investment, Ufone can now aggressively expand its network coverage

Ufone has played a limited but significant role in the development of the cellular market in

Pakistan. Whilst it is not seen as a leading edge innovator in the market, it was first to launch the

GPRS services and Multi-media Messaging Service (MMS) and prepaid roaming in Pakistan. As

mobile users in the country have reached over 78 million at a very rapid pace, Ufone has

maintained itself as the 2nd largest cellular operator in Pakistan with a subscriber base of around

16.5 million and a market share of nearly 25%. Ufone has seen a subscriber growth rate of over

200% in the last year, and since the start of 2005 Ufone added nearly 5 million subscribers onto

its network. A remarkable achievement indeed, especially considering the fact those two new

international players also entered into the market in 2005. Subsequently the growth in subscriber

base caused a healthy trend in revenues which have doubled. While keeping its tradition of being

the trend setter in the industry, Ufone changed the image of mobile phones from a luxury only

affordable by the elite, to a necessity affordable by the common man. Since its inception, Ufone

has positioned its brand for masses. In keeping with the upcoming competition and market

dynamics, Ufone increased its focus on the youth segment (which comprises 50% of the

population), with the Prepay brand. By designing market focused products, Ufone’s brand team

launched aggressive campaigns, which further increased the brand equity. The new brand image

gained huge popularity amongst the targeted market. A recent marketing survey conducted by a

prominent marketing research company showed that Ufone has considerably increased its brand

visibility and image. Ufone’s Prepay brand is now considered to be one of the most favored

brands by the youth market and is followed by other mobile operators launching their respective

brands for the youth market. Ufone provides International Roaming facility with more than 150

international operators across 79 countries. Ufone has GPRS roaming agreements with several

international operators and also provides prepaid roaming facility to selective destinations.

Ufone is proud to have an efficient and friendly customer service through 21 company-owned

Sales & Customer Service Centers and nearly 250 franchisees across the country. The outlets are

able to service the customers with innovative solutions, and are empowered with Web based

franchise management systems. Ufone is poised to face the ever increasing challenges of the

market and is confident it will attract new customers. It has the ability to retain its existing

customer base with a high level of customer satisfaction via optimum network service and a 24

hour call center facility. Ufone has always believed in a solid commitment to growth, security and

reliability. Therefore, Ufone has always balanced its expansion efforts and quality of service.

With a total current investment of $400 Million. Ufone has been instrumental in the growth of the

cellular market in Pakistan. It is a company committed to excellence. Under the new vision of

Etisalat and with the support and collaboration of its employees and vendors, Ufone aspires to be

the best in the market by offering customer focused products and a quality service and sales

network. Utunes was launched on 4th Dec2007 under the leadership of Mr Aatif Jamal Qidwai as

per the guidance of his guru Mr. Aamer Ejaz. Utunes has proven itself to be hit amongst

youngsters. UTunes brings the one stop where you everyone can find their favorite songs. Thanks

to UTunes which will never be the one asking others for the latest hit; in fact everybody will have

everyone shaking to the latest grooves from around the world. Postpaid services are marketed by

the name "Postpay". These services are mainly targeted towards the business community of the

country. Ufone has a subscriber base of 18.97 million as of October 2008.

Mobilink

Type Public Limited Company

Genre Subsidiary

Founded 1994

Founder(s) Motorola USA

Headquarters

Islamabad, Pakistan

Mobilink House, 1- A, Kohistan Road, F-8

Markaz, Islamabad

Area served10000 cities, towns, and villages across

Pakistan

Key people Rashid Khan, President and CEO

Industry Telecommunication

Productspostpaid Indigo , prepaid JAZZ, Mobilink

PCO, WiMAX

Owner Naguib Sawiris

Parent Orascom Telecom Egypt

Website www.mobilinkgsm.com

Pakistan Mobile Communications Limited, better known as Mobilink GSM, is a

telecommunication service provider in Pakistan. According to PTA statistics, Mobilink has 31.75

million customers by March 2008.

Mobilink started operations in 1994 as the first GSM cellular Mobile service in Pakistan by

MOTOROLA Inc later it was sold to Orascom, an Egypt-based multi-national company.

Orascom Telecom Holding S.A.E. ("Orascom Telecom") or ("OTH") was established in 1998 and

has grown to become a major player in the telecommunication market.

OTH is considered among the largest and most diversified network operators in the Middle East,

Africa, and South Asia, and has acquired in early 2008 a license to operate mobile services in

North Korea. Orascom Telecom is a leading mobile telecommunications company operating in

six emerging markets having a population under license of 430 million with an average

penetration of mobile telephony across all markets of approximately 40%. OTH operates GSM

networks in Algeria (Djezzy), Pakistan (Mobilink), Egypt (Mobinil), Tunisia (Tunisiana),

Bangladesh (Banglalink) and Zimbabwe (Telecel Zimbabwe). OTH had exceeded 74 million

subscribers as of March 2008.

Mobilink is the largest cellular service provider in Pakistan. Mobilink's corporate postpaid

package is sold under the brand name "Indigo" and prepaid by the name of "Jazz".

In addition to cellular service, the Orascomm group is diversifying its service portfolio by setting

up new businesses and also expanding through acquisitions. Recently, they started offering DSL

broadband through a wholly owned subsidiary, Link.Net. Company is in place for launch of

wireless broadband service through WiMax based technology.

With a softlaunch on 1st July 2008, Mobilink is now the second WIMAX internet service

provider in Pakistan. Currently providing services only in Karachi.

WiMax services will be sold under the brand name "Mobilink Infinity". Technology is backed by

Alcatel, and company is using ZYXEL Customer Premises equipment.

In addition to Mobilink, the Orascom group also owns TWA (Trans World Associates) which

operates an undersea fiber optic cable from Karachi to Fujairah, UAE.

Brand Persona

UFONE

• Male / female

• 18 to 35

• complacent

• Energetic.

• Funky.

• Fun-loving

• Enjoys messaging, plays games on

mobile

• Bold, confident and has a social class

• Trend-setter

• Likes net surfing

• Young, rich

• Wants better rates

• Sultan Rahi.

Mobilink / JAZZ

• Male / female

• Everybody from 13-80 yrs

• Jazz usually goes with a woman,

someone attractive

• Wise & aware of

• Higher IQ

• Businessman

• successful

• Knows market and strengths and

weaknesses of what’s on offer.

• college going / young /dependant

• Status / price conscious

• A Follower

Market Share of Ufone and Mobilink

At the top is Mobilink, the Pakistani unit of Egypt-based telecom company

Orascom. It has been operating in Pakistan since 1994. Subscriber share is

36% at the end of Sep 2008.

Ufone, a wholly owned subsidiary of Pakistan Telecommunication Co. Ltd

(PTCL), is now under the control of Etisalat group of UAE. It has 21% of

subscriber share and added the most lines (2.4 million) from 2006-07. For those in Pakistan it is

the one company

Ufone V/s Mobilink

Same Network

Airtime 15% GST Total

Ufone (Off-Peak) 1.50 0.23 1.73

Ufone (Peak) 2.50 0.38 2.88

Mobilink (Peak & Off-Peak) 2.35 0.35 2.70

Other Network

Airtime 15% GST Total

Mobilink (Peak & Off-Peak) 4.35 0.65 5.00

Ufone (Peak & Off-Peak) 2.50 0.38 2.88

Miscellaneous Charges

Change of Conversion Charges

Reactivation of blocked

SIM Replacement Charges

Prepaid Number

Postpaid Number

prepaid to

postpaid

postpaid to

prepaid

Prepaid number

Postpaid number Prepaid Postpaid

Ufone 300 300 Free 250 Free Free 200 200Mobilink 100 100 Free 100 50 200 50 50

Fixed Line

Airtime 15% GST Total

Ufone (Peak & Off-Peak)

2.50 0.38 2.88

Mobilink (Peak & Off-Peak)

3.35 0.50 3.85

Value Added Services (with tax)SMS

Same Networ

k

SMS Other

Network

Foreign SMS

MMS/GPRS

Activation

MMS/GPRS

Monthly

MMS Incomin

g Nework

MMS OutGoin

g Nework

GPRS Per MB

Balance

Inquiry

Ufone 0.58 1.73 1.73 75 Free 5.75 5.75 17.25 0.58

Mobilink

1.15 1.73 5.75Not

available345 per

Year6.90

Not Availabl

e

Not Availabl

eFree

Tariff Comparison between Mobilink & Ufone

 Low Cost  High Cost

Same Network  Airtime 15% GST Total

Ufone (Peak) 2.50 0.38 2.88

Ufone (Off-Peak) 1.50 0.23 1.73

Mobilink (Peak & Off-Peak) 2.35 0.35 2.70

Other Network

 Airtime +

InterConnect15% GST Total

Ufone (Peak & Off-Peak) 2.50 0.38 2.88

Mobilink (Peak & Off-Peak) 4.35 0.65 5.00

Fixed Line

 Airtime +

InterConnect15% GST Total

Ufone (Peak & Off-Peak) 2.50 0.38 2.88

Mobilink (Peak & Off-Peak) 3.35 0.50 3.85

Traffic information for international outgoing

We have seen Mobilink’s declining sales in previous months, which maybe didn’t jolt experts’

mind due to their size and weight of customers. It’s very obvious that a company with

subscribers’ base of 31 million cannot attain growth rate of even 1 percent or so, also given that

cellular subscribers’ teledensity has hit 56 percent mark.

But following figures of international outgoing traffic for cellular companies (through PTCL) for

the period of April, May and June 2008 may wide open many eyes. A very reliable industry

source has given us these stats (however these stats can’t be considered official – but we are likely

to see them in coming PTA’s annual report) which reveals that Mobilink is almost disappearing

from the graph.

May 2008 can be considered most shocking month for Mobilink, as they were able to generate

merely 56,142 minutes for international calls compared 64,371 in June 2008. For all of three

months, Mobilink earned total of 1,581,309 international minutes.

While on other hands, Ufone’s skyscraper is seen very firm standing at 81,340,900 minutes for

three months. This traffic information for international outgoing is just a depiction of market

situation. However, we can’t actually assume this international traffic (through PTCL) as directly

proportional to local or national traffic these companies have; but due to a fact that international

traffic contributes major part in revenues (due to very low local call rates).

Ufone Strategies and Marketing mix

Price (prices of Ufone are given in the above charts at page 13 and 14)

Pricing strategy plays very important role to acquire market share where giant competitors are

already working and moving ahead.

Ufone has implemented low pricing strategies to reach its objectives. Pakistan’s mostly

population contains on Middle class and working class people. In this view the low pricing

strategy of Ufone gets attention of many customers. In the early age of Ufone launched, they

decide their logo by the people opinions that boost its products. An advertising campaign

launched showing Bakra Market that relates to middle class of Pakistan.

Placement

Ufone has more than 10.2 million subscribers as of Dec 2006 and has network coverage in more

than 750 cities. Ufone offers efficient and friendly customer services through 225+ Sales &

Customer Service Centers across Pakistan.

Product

Ufone understands the value of words and the need to communicate effectively and efficiently at

all levels of society, which is why company’s primary focus is on U. Ufone offers, Prepay&

Postpay services in the Telecom sector. The telecom market’s growing rate in Pakistan is higher

than any Asian country. Ufone offers lower rates and better network then other already

established cellular companies. All living standards have been captured by Ufone, like Students,

Labor and Businessmen, etc. Ufone aims to provide with wider coverage, superior connectivity,

clear signals & voice quality to their valued customers.

Promotional

For the promotion of product, print media, electronic media, billboards, broachers and leaflets has

been utilized for the awareness of various customers. Time to time, Ufone

promotes its services / schemes to their users and general public via using

various type of promotion channels. Through the advertisements people

get awareness about the product and are able to choose the best one for

fulfill their requirement in Mobile Telecommunication. Electronic media

and billboards (Including skyscrapers) are the key sources for the

promotion of Ufone. Different kind of advertisement can be seen on

Television and billboards. Ufone is also a co-sponsor of Cricket World

Cup 2007.Advertising campaign is special and impressive than other cellular companies, like

concept, models, colors scheme and visualizing. The advertisement of post pay has been very

much attractive for the business class customers with the slogan of endless possibilities. Ufone

website (www.ufone.com) contains bunch of information about the product, services, coverage,

placement, and value added services. Website is playing a leading and significant role for the

promotion of product. Call operators of customer service department are professional and

proficient to resolve consumer problems and they are 24 hours available to respond customer’s

query. Mobile Portability Technology has been launched by the Ufone which is very first telecom

company to adopt and promote the latest technology. To deliver the knowledge of Mobile

Portability Technology Ufone promoted it through print and electronic resources.

Ufone’s future plans (Network Upgrading)

Under the agreement, Huawei will provide its future-oriented EnerG GSM solution to expand

Ufone's network to cover over 1,500 cities, towns, villages and all major highways in the country.

The network also allows Ufone subscribers to enjoy high-speed wireless data service. The GSM

contract for Ufone also include Huawei's new generation GSM dual density BTS that feature high

integrated and receiving sensitivity to improve the network performance and lower the cost of

network construction and O&M expenditure. In addition, Huawei will provide Mobile Softswitch

solution based on the advanced R4 architecture to satisfy Ufone's network expansion

requirements, enables the telecom service provider to evolve into 3G smoothly.

Bulls-eye -18 year old

Their needs are connectivity, safety/security, and ego need, peer pressure (keeping appearances

and being able to bond with friends /social support group). They psychographically targeted 16 to

60 years of age, from the elite to working class.

Ufone-ABN AMRO Credit Card

ABN AMRO introduces its first co-brand Credit Card with Ufone, one of the leading

telecommunication companies in Pakistan. Now, not only can you enjoy special packages with

Ufone, but the more you talk, the more you can earn on your ABN AMRO Ufone Credit Card.

Value added services

Missed Call Notification

Phonebook Saver

My Ufone Account Services

Infotainment

Urdu Info Services

Trivia Quiz

Pocket Data Services

Virtual Private Network

Call Features

Messaging Services

UShare

Competitor Analysis

Telecom Industry is experiencing a fast pace in context of

new launchings and introduction of exciting technologies.

From this month, IT Insight will provide a regular section

'Market Watch'. The section will cover the industry and

provide reviews, insight analysis and industry forecasts.

This will base upon market intelligence, industry news,

experts' opinions and research.

Cellular Competition

You can call it 'cellular war' as the intensity of competition is so high. In Pakistan’s telecom

industry, millions of confused and satisfied subscribers look up to the service providers for them

to sustain at 'one' fixed tariff policy. The variation in tariff plans almost every other month is

outcome of severe competition between cellular companies especially after entrance of two new

cellular companies in 2005. Nearly all cellular companies in Pakistan modified their tariffs during

last 12 months.

Pakistan 10 million new customers in 2007

Cellular News has reported that Pakistan gained 10 Million new cell phone customers in first 4

months of 2007. Not much of a news but it shows that the rate of growth is still in high gear.

Telenor garnered the biggest portion, with 3m or 30% of the total, ahead of Mobilink (27%),

Ufone (25%) and Warid Telecom (21%).

Ufone was the best performer in April, adding 0.89m customers, or 32% of the monthly total.

Mobilink crossed the 25m customer barrier, becoming only the 11th Asian mobile company to do

so, after China Mobile, China Unicom, NTT DoCoMo, KDDI, Telkomsel, Bharti, Reliance,

BSNL, Hutch etc.

SWOT Analysis of Ufone

Strengths

Government backing a lot when come to a new entrance to the industry as it has done in

Ufone case

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000 31,756,283

17,198,37316,701,72014,394,927

2,142,465320,768

Cellular Subscribers in Pakistan

Subscribers

Cellular Service Providers

SubscrIbers

They have the latest technology as compared to any other mobile company

As government is backing them they can get as many fund as required by them to

introduce the new technology

Good quality service

Pakistan's second GSM network

Established customer base including lower middle class

Less churn rate than competitors

Only company present in all four provinces

Coverage on GT road 60%

Ufone was established as price challenger and realizing continuous growth

Highly motivated and trained work force

Offering products like mobile office, mobile Internet and MMS

Weaknesses

Less coverage in remote areas

Not targeting the rural areas at the moment

No proper planning to cater the excessive demand

Opportunities

They can start their services in other cities of Pakistan

As they are the subsidiary of Pakistan telecommunication limited, they can acquire as

much fund needed to improve their technology

They can also target corporate sector

Threats

Legal environment, government interference

Deregulation of Telecom sector

PTCL has been given license for cellular operation

Mobilink is also going to introduce some new technology and committed to invest more in

Pakistan

Mobilink have more coverage in different cities of Pakistan then Ufone

High taxes are imposed on the cellular industry in Pakistan

Ufone’s S trategies to Pre-empt the Competitor

Pakistan market consists of different companies that include: Mobilink, Telenor, Warid and Zong.

We have taken Mobilink as our competitor in this report so, our ideas and strategies would be

related to them because we have kept Mobilink in our minds while designing these strategies.

Ufone has always led the way in service innovation which has led our recognition of being the

operator of choice for millions. The successful inter-operator trial is testimony to the commitment

and direction shown by Ufone in bringing new technology and services to Pakistani consumers.

These are the strategies which will pre-empt Mobilink

The most important one is that as Ufone is already targeting the youth and according to

the population survey of Pakistan it is predicted that in the coming years, greater

percentage will be of youngster, so Ufone should keep focusing on the young generation.

People are becoming price conscious day by day because of increasing rates all over

Pakistan; Ufone should bring more good packages for its customers.

As Mobilink MMS charges are Rs 5 per, Ufone should decrease its MMs prices or should

make it free for its customer

Should start Video Conferencing services which is unique and will be very useful in the

future because of increasing mobile phones in Pakistan

Target remote and rural areas

Install towers, for better coverage

Should go internationally

Advanced Technological equipment should be installed with professional engineers this

will benefit the consumers.