4.

Analysis and Recommendations:

4.1 Analysis
4.1.1 SME Segment Strategy for AKTEL Medium Enterprise: Companies/organizations with 50-99 employees and/or investment of more than Tk. 10 lakh. Small Enterprise: Companies/organizations with 1-50 employees and/or investment of less than Tk. 10 lakh. According to Bangladesh Bank, The average size of the SME is 5 (Five) workers (this includes the proprietor) The median size is 2 (Two) 90% of all enterprises have 10 (Ten ) workers Enterprises with just 1or 2 (One Or Two ) workers represent 60 % of all enterprises Thus Average number of workers working in an SME is 5 (Five) Why we should focus on SME Segment? SME segment constitutes a significant portion of the market that tends to be loyal customers. This segment provide high revenues compared to their market size, and is better addressed quickly and retained than tried to be lured away from other operators. Till now no other operator has come up with any useful product for the SME segment. 85% of the SME market is still untapped. Other competitors are taking this segment as a priority segment and will be trying to capture the market as soon as possible. Segment Size:

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 According to a research made by CATALYST there are 6 million small & big SMEs in Bangladesh. Among these SMEs officially registered a significant portion falls under the SOHO segment & financially constrained segment. ARPU in SME segment is higher than the mass segment.

SME is the most prioritized sector by the government, as it is believed that SMEs will play the biggest role in the economic development of the nation. Segment Strategy: SME AKTEL offer for SME will differentiate from the competitors on three main points: RELEVANT - best understanding of the customer (product/tariffs offers, communication and distribution tailored for small business, ); AFFORDABLE Reasonably priced standardized tariff. HIGH QUALITY - best customer service (both before and after sale) and connection. 4.1.2 Understanding the SME Segment 4.1.2.1 Psychographic Research: Sampling: The sampling method for this research was Extended depth Interviews and the sample size was 23. The segment wise of different SME which were interviewed are given below:

Profile Dhaka Chittagong Sylhet Rajshahi Barisal Khulna

2 20

21 50

employees
2 2 2 1 1

employees
2

51 100 employees 2

TOTAL
6

2
2 1 1 -

2
1 1 1

6
5 2 2 2

TOTAL

23

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The SME Psychographic Analysis will help us in understanding the behavior pattern of the SME segment as well as their expectations form a telecom operator.

Product Concept
Basic product feature: Lower start up cost Economic tariff plan Business partner option Advanced product feature: Group talk Teleconference options Short call benefit.

User Group
Small & micro enterprises Companies registered under trade license. Agro Based, Handicrafts, Small Association: Cooperatives, Small Agriculture Sectors, Shopping Malls Small Enterprises & medium enterprises Advertising agencies, Export/Import companies, Buying and selling stores, Construction building, Media, Airlines, Brokers, Hotels, Hardware/software vendors, small manufacturers, Suppliers/service companies, Transport companies, Engineering companies, Trading houses, Association of professionals

SME Brand proposition Target consumers: SME is defined as companies/organizations with 1-99 employees. Competitive environment: The competitive environment includes the other mobile operators as well as other communication media such as land phones, courier and fax. Consumer insight:

Mainly need based communication.

High value for money seekers. Low interaction with VAS. Operates within a huge sphere: needs a large network. High dependency on voice/personal contact. Very high frequency of communication Benefits: Emotional The Efficient Organizer helps me manage day-to-day life.

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 The Relationship Glue staying in touch with close contacts. The Only Savior in emergency situations. The Smart Choice the best package for me. Functional Group Talk Facility and Business Partners. Savings schemes with banks.

Values: Simplicity Independence Personality: Practical High saving tendency Strugglers Little space for self Reasons to believe: Customer focused products and services. Has a customer over three million. Nationwide coverage from Teknaf to Tetulia across 61 districts. KEY differentiator: Packages that meets my exact needs. Essence: Communicating effectively for Business Excellence Helping me make the most of every business opportunity. Enabling me to make the most of Every Business Opportunity that Comes My Way.

4.1.2.2 AKTELs Vision & Mission for the SME segment Vision: AKTEL will take leadership in providing the most relevant, affordable and highquality communication services for small & medium businesses. Mission: The offerings would aim at providing effective, value for money proposition and simple, easy to use solutions that would make the clients operations more efficient and businesses more profitable.

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4.1.2.3 AKTEL SME segments SWOT Strengths: 1. Image of an honest operator. 2. Good network coverage 3. Good customer care 4. Telecom Malaysia Joint venture 5. Available funding to develop the segment

6. Responsive coverage planning function to rollout the network 7. Consumer focused Weaknesses: 1. No customer credit for calls (including roaming); 2. Network congestion 3. No specific product for SME 4. Bad coverage on roads & rural areas 5. Bad Position on corporate market 6. Not very much control over dealers 7. No own stores 8. In generally viewed as follower of GP

Opportunities: 1. Use the first mover advantage with the specific offer for SME 2. Growing market with high ARPU 3. Penetration rate is still very low 4. Use non-traditional channels of communication (SME associations, governmental organizations) 5. New product offers in 2006 that none of the competitors yet have 6. Enhances the opportunity of carrying a more localized image.

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Threats: 1. Competitors reacts fast or comes to the market with SME offer first 2. Dealers will not completely cooperate 3. Political instability before elections 4. Internal structure will slow down fast implementation of SME project 5. Perception of AKTEL as user friendly brand is being lost

4.1.2.4 Actions from the SWOT Be the most organized mover on the SME market. Identifying the scattered SME subscribers of AKTEL Launch a new product offer for SME

Improve coverage on the disturbed zones. Establish a separate SME customer services Establish a good relationship during the year with business associations and government bodies involved with SME (If possible make agreements) Review relationship with dealers and provide incentives so they are more willing to sell to SME Design customer life cycle management system to ensure the best service and retention of the customers on every life stage 4.1.3 Competitor Analysis - Strengths Competitor 1GP: Key strengths (threats) GP has launched a product named Business solution, which is targeted for both Corporate and SMEs. Connectivity: All mobile numbers, fixed phone numbers and international numbers International Roaming: Receive and call while traveling abroad

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 Closed User Group (CUG) : Special tariffs for talking among company employees Friends & Family (F&F): Special tariffs for 3 selected numbers Call Conferencing: Connects up to 5 calls at a time Caller ID: Shows who is calling you Call Divert: Forwards call to any selected number Call Barring: Bars incoming and/or outgoing calls to protect unauthorized use Call Waiting: Holds three calls on wait while you are busy with a call SMS plus, SMS banking, SMS information services, mobile phone profiling. Advanced messaging services Internet & data service (edge)

Competitor 2 Banglalink: Key strengths (threats) Banglalink came up with a product called Banglalink Professional which is co branded with Eastern bank. Only EBL account holders will come under this package. 500 taka M2M connection & 1250 tk Standard connection Minimum 2 connections have to be bought. If 4 connections are bought then One motorolla c115 set will be given free

EBL will provide debit card on business account On line transaction in any Ebl branch for one year will be free. 90% OD facility on FDR balance Business loan facility

Association with Katalyst (More Business) Subsidized Package Fast response to market/customers Strong Mother brand (Orascom) Strong presence in the region (Pakistan)

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 Experience in operating in similar economic environment (Mobilink, Pakistan) Strong financial liquidity Quick to react and changing the market perception about mobile tariff Very aggressive in employee and customer acquisition Fast expanding network 3rd party distribution (Ring)
Competitor 3 CityCell: Key strengths (threats) SME segment prioritized Good access to information on SME Decision hierarchy very prompt Low tariff structure Political affiliation Recent acquisition by Sing Tel. Competitor 4 Teletalk: Key strengths (threats) Government and political backing Free TNT incoming Low tariff Data service Nationwide PSTN connectivity.

4.1.4 Marketing Mix Marketing mix in 2006 will be based on AKTEL long-term vision for the segment. AKTEL will take leadership in providing the most relevant, affordable and highquality communication services for Bangladeshi small & medium businesses.

Product:
Main priority for this year is the launch of SME product so that it allows us to offer a unique product for the SME that boosts sales and increases glue to the customer.

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Product configuration will be based on SME customer needs research. Existing products that should have priority for SME in 2006: GPRS, F&F, SMS and International Roaming. New products that should have priority for SME in 2006: VOICE Group talk facility Mobile banking High amount of balance transfer Deposit savings scheme

Price:
2-3 simple & standardized tariffs for SME (no special discounts) We will review our current tariffs and make a new offer in order to start more SME specific communication. Our tariffs will be at least 10% lower then min competitors offer; Existing tariffs for SME should underline CUG & flat tariff as main advantage Consider possibility canceling the provision of connection fee. We will also offer special tariffs to SME sub-segments to satisfy their specific needs: Regional based tariff discounts for High and Low SME. Special offer for SOHO private entrepreneurs that will allow them have discounts for weekend calls (for those who trade at bazars and markets). Other offers based on SME customer needs analysis.

Place:
The telesales team will be collecting and validating database of the SME so that sales team can hit the market Direct sales team will go and sell the product. Indirect sales team will be making sales through business dealers and sales agents. Business dealers will be making sales through sales representative.

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 Sales can be also made through the co-partners. (Involving BRAC, MIDAS, BSCIC etc.) Specific and standardized sales scheme for SME.

Promotion :
Promotion tactics for SME should be based on overall strategy for AKTEL brand positioning. Main goals for communication are: Exclusively separate offer from other AKTEL offers for the SME segment. By the end of the year reach 50% awareness of SME offer as: most relevant, reasonably priced, high quality communication service (according to the vision). Identify three most effective channels for communication with SME.

Research Bangladeshi SME landscape in order to identify the most influential and popular organizations/venues among SMEs. Investigate opportunities to initiate activities through those channels in order to more potential customers through non-traditional channels.

4.1.5 The Structure of AKTEL SME Unit :

SME UNIT

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DIRECT SALES

INDIRECT S

TELEMARKETIN G & TELESALES

BUSINESS DEVELOPMEN

RECONSILATIO N UNIT

DATABASE DEVELOPMEN

MARKET PLANNING, MARKET

Direct Sales Activities : Prospect Identification , Routine visit , Maturing sales , Sales planning , Collecting area wise sales information , Analyzing competitors activities.

Indirect Sales Activities : Developing channels

, Generating sales , Monitoring channels , Analyzing competitors activities.

Telemarketing Activities : Develop Prospects and clients through telemarketing , Keep close look on existing clients , Different customer development & retention program.

Database Development Activities

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: Develop database of Prospects and clients, Maintaining client portfolio , Use database for different customer development & retention program. Market Planning Activities : Market Planning & Development , Demand Analysis , Revenue Planning , Revenue monitoring , Product Planning , Brand planning , Event and activity planning , Market Analysis, Market scanning and Competition Analysis.

Reconciliation Unit Activities : Paper payment reconciliation , Commission calculation and disbursement , Monthly/ yearly monitoring of sales/stock performance and Preparing all the reconciliation reports.

4.2 Recommendation
4.2.1 SME proposed product: Unique Need & Need-based solution SME Uniqueness From the psychographics research the unique needs of SMEs have been identified:

Ease of entry/ start up cost

Frequent communication with the business partners (both backward & forward)

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Unique Needs

Communication need with the family and the Bank

Savings Needs

SME Uniqueness : Ease of entry cost barrier/starter up cost (connection fee): It is seen from the research that entry cost barrier plays a very important role in SMEs buying behavior.

Reasons to believe: The SMEs are already users of mobile phones of different operators. The SMEs value every single penny they are spending because of low business capital. Solutions for Entry barriers: Connection fee: 1. Down payment Customer has to pay 50% of package price at the time of purchase if minimum 2 post-paid SIMs is bought. 2. Remaining payment by 5 Installment Installment amount has to be paid with monthly bill.

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 If a SME buys more than 5 SIMs then connection price of one SIM will be rebated. If a SME takes connection of 10 SIMs then a handset can be offered to him. For getting installment privilege, customer has to provide the followings-

Copy of trade license Minimum stay commitment- 36months.

Frequent communication need with the business partners: It is seen from the research that SMEs has the need to communicate with their business partners frequently. Most of the SMEs talks with Business partners (i.e. both backward & forward linkage in their business). Frequent/infrequent & long duration call pattern in case of following people Partners/friends in same business field Managers/second in command Suppliers Client/brokers

Business communication solution: It is seen from the psychographic research that medium & a portion of small SMEs prefers post-paid connectivity but a subsequent portion of small SMEs finds pre-paid more convenient. Strategy -1 ( Post-paid): Line rent will be waived if airtime crosses tk.1000 in a month.

GROUP TALK facility will be offered if more than one SIM is purchased. This applies only in the business hours because SMEs mainly communicate during the business hours. SIMs bought under GT will have BP facility to 3 AKTEL numbers but the master SIM will have BP facility to 5 business partner number. 1 number can be chosen from other operator. 2 AKTEL BP numbers can be changed within 1 month but in case of other numbers 3 months required.

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 It is seen from the research that SMEs have frequent short duration call pattern in case of: Wife, Parents, and Friends. Solutions: Short duration call facility will be given. If the call duration stays within 1 min then the SMEs will get a low tariff. This will encourage the SMEs to call more to his families & friends. Communication need with the bank: It is seen in the research that bank plays a vital role in a SMEs day to day activities. Communication transaction between a bank & a SME is very high because bank manages all their monetary issues such as collection & payment. Bank also plays a source of information regarding: a. Account balance check b. Payment status check c. Any new scheme by the bank d. Payment of utility bills Communication solution with Bank: To make the banking communication needs of SMEs more convenient the following services can be provided to the SMEs SMS Banking service. Through this service the SME can check his bank account balance, pay his utility bills through SMS, gain bank related information. Voice SMS service. Through this service the SME can get Bank related information , check his account balance.

Savings need of the SMEs: It is seen from the research that SMEs have a need for saving money for the future of his children's, Re-investment in business's, for buying something for his old father/mother, for the repayment of his loan.

Solutions: Customer deposit schemes-These scheme will be available for SMEs who are the post paid users. If the user pays more than 1200tk then 10% of this money will be deposited in a bank account and after 36 months the accumulated amount will be given to him as a reward. 4.2.2 Proposed Package Features of AKTEL SME

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Name: Independent Low startup cost or no start up cost at all. Discounted line rent or no line rent at all. Flat tariff during the peak business hours(9am-12.30p.m) & again at (5pm-8pm) Ensure the users uninterrupted service throughout the day. SMEs has the tendency not to switch their existing number because the number is well spread out. In this case the user can get certain amount of free calls so that he can circulate the new number. At least 5 F&F numbers with one number applicable to all operators. Easy payment options such as auto payment from their accounts or mobile banking. A good quality handset (with MMS) can be offered to the SMES through micro credit program with certain banks. If anyone buy at least 3 SIMS then group talk facility can be given between those numbers If the SME subscriber is existing AKTEL user then easy migration facility can be provided that the user does not have to change the number. If the subscriber makes a certain amount of usage then he can enjoy an auto saving scheme. Certain amount of money will be automatically transferred to his bank account, which can be en-cashed. Phone book mapping facility BTTB incoming free during peak hours for certain period. Reduced rate SMS facility and MMS facility can be provided. SMS to at least one international number can be given free. Any amount of balance transfer can be given to one AKTEL number free of cost.

The money earned through the auto saving scheme can be transferred to another account apart from the users own account. Thus the owners of that account can en cash it as well. In this case the user has to select the other account once.

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 If a SME can influence his backward & forward linkage partners to use AKTEL SIM with certain amount of usage then every month the user will get certain free air time. The SME can be given an option of making payments up to certain amount to his backward& forward partners through his mobile phone. The money would be transferred to the other persons bank account. 4.2.3 Other Identified Needs : The psychographic research has identified some common needs of the SME segment such as: Old number migration BTTB incoming facility Never loosing any opportunity- Always keeping me connected. It is seen from the research that SMEs has tendency to stick to the number they currently have. Reasons to believe: The number is well circulated amongst his business partners and changing a well-known number is a hassle for him/her. It is seen from the research that SMEs has BTTB incoming & outgoing need. He does not want to miss any business opportunity and thus wants to be connected in every possible means. Solution: Standard connection: It is seen from the research that SME,s always want to stay connected no matter what happens because they do not want to miss an opportunity to do a business. Regular billing up gradation through bill posting through courier, fax, SMS etc. Incoming call from mobile phone will be never barred even if subscriber exceeds credit limit. Missed call alert in case of phone is switched off. Alerting the person through voice mail before he is close to his credit limit. Dedicated round the clock unbarring credit control team Auto unbarring system after bill payment thru scratch card by using 8PAY.

Automated answering machine function

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4.2.4 SME Push-Pull hotline services Geographic Location based Push-Pull services: Static & Dynamic Data: Health service: Hospital, clinic, Diagnostic lab, Drug shop, Doctor Security: Police station, RAB, Fire service, Private security Travel & Transport: Bus & railway schedule, flight schedule, Taxi cab contact number Hotel, Restaurant Bank & financial institution information Vocational training institution information Foreign Currency exchange rate Commodity price Shopping information Service delivery process may be as follows: Customer to call Hotline number over his/her phone SME customer care hotline staff to log in Database as per customer query SME customer care hotline staff confirmation. Service charge: Customer has to pay for each Push-Pull hotline call @Tk. 3 (excluding VAT). Pls. note that SMS confirmation charge also included in Tk. 3. Hotline implementation plan: Marketing to provide all yellow book data to IT VAS team IT VAS team to develop Push-Pull Database module SME call center staff recruitment & training SME call center staffs to log in module & enter search button for Push-Pull data SMS confirmation module development to give answer over phone & by SMS

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4.2.5 Product Features:

Tariff Plan:

Particulars OUTGOING(Tk. Per min) To AKTEL

To Business partner (FnF) To AKTEL Group Talk

Business Hour 8AM 9PM

Private Hour 9PM 8 AM TK. 2.80 TK. 2.80 TK. 2.00 TK. 3.50 TK. 3.50 +BTTB Free
1st seven min. Free & then TK. 1.00

TK. 2.50 TK. 1.50 TK. 2.00 TK. 3.00 TK. 3.00 +BTTB Free

To Other Operators To BTTB INCOMING Tk. Per min) Mobile BTTB

1st seven min. Free & then TK. Potential of SME market for the mobile operators in Bangladesh 2.00

54

Payment Mode of Connection fee: a) For one connection Full payment b) For at least three connections Down payment Tk. 1000 for each STD & TK. 500 for each M2M , 5 installments (to be realized with monthly billing amount )

4.2.6 Zone-wise sales projection for SME:

Zone wise sales forecasting for SME

Barisal (5.06%)

Dhaka (34.6%) Rajshahi (19.4%) Dhaka Chittagong Sylhet Khulna Khulna (13%) Rajshahi Barisal

Sylhet (5.06%)

Chittagong (22.8%)

4.2.7 SME Pre rollout steps Develop the SME product (already in process) Signing agreement with organizations who has worked with the SMEs in Bangladesh in order to do co-branded activities and also acquire there customers. (Organization such as MIDAS,BISIC,BRAC BANK)

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 Participate in SME activities in order to give the feel that AKTELs only objective is not doing business but also do activities for the development of SME in Bangladesh as SMEs are considered as the future backbone of the economy. (Events such as conferences, seminars etc.)

4.2.8 SME Post rollout activities: Communicate to the SMEs through different communicating channels about AKTEL SME product. Organize SME fairs or participate in SME fairs. Give award to the three best performing SMEs. Sponsor a television program that identifies the upcoming SME industries and talks about their need for development. (e.g. Mati O Manush)

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