Group Members:

Fizza Azam
BT-08-77
Ramsha Naeem
BT-08-61
Anum Fayaz
BT-08-26
Gulshan Parveen
BT-08-58
Roop Zahra
BT-08-67
Mehroz Khan
BT-08-14
DOWNFALL OF
Murtaza Shabbir
MOBILINK
BT-08-47

“PRINCIPLES OF
Ahmad Hannan
BT-08-65
MANAGEMENT”
SUBMITTED TO:
 2
Downfall of Mobilink

Preface

Mobilink Pakistan, premium cellular company claims to

have 30 million subscribers nationwide; the fact is Mobilink is the largest
cellular company in Pakistan. Mobilink being the pioneers of introducing
cellular networks in Pakistan established themselves as the major cellular
company of Pakistan while covering almost every city of Pakistan.

According to PTA new mobile subscriber’s statistics Mobilink, Pakistan largest

cellular service, continues its downfall by losing 476,521 customers. The report
has tried to illustrate and judge some of major reasons for downfall. This report
contains information about factors and some strong competitive forces Moblink
faced which resulted in crisis.

Mobilink is major cellular company and will stand in first place many years to
come. With professional approach and highly skilled staff behind Mobilink is
the premier choice for subscribers nationwide. The only problem I see with
Mobilink is the call rates which in my point of view are somewhat high. As the
competition is growing I hope the rates will be cut down to attract more
subscribers.
 3
Downfall of Mobilink

Acknowledgement

“To Him belongs the dimension

of the Heavens and the earth, it is He who
gives Life and death and He has power over
all things.” (Al-Quran)
All acclamation to Allah who has empowered and enabled us to accomplish the
task successfully. First of all we would like to thank our Allah Almighty who
really helps us in every problem during the project. We would like to express
our sincere and humble gratitude to Almighty whose Blessings, help and
guidance has been a real source of all our achievements in our life. Under the
supervision of respected Madam QuratulAin Beenish, I worked as a group
leader with my co-workers:

We interviewed Mobilink’s Managers, Employees, Corporate

and Retail Customers and customers which once used Mobilink, visited PTA’s
results to get to know what are some of reasons for such a storming downfall
Mobilink faced. I would like to thank respected Mr. Bilal Chaudhry, ZRO [Zonal
Retial Officer] Multan for his deep concern and help for our topic. Moreover, I
would like to thank all of Mobilink’s Crew for their help in all possible ways.
 Mobilink
4
Downfall of Mobilink
 Mission statement

Table
 Values Of Contents
 History Of Mobilink

 PTA

 Mobilink

 Orascom Telecom

 Network

 Organogram

 Products of Mobilink

 Growth Share Matrix

 Downfall Of Mobilink

 What is Downfall

 Literature review

 Public Voices
 Major Downfall
Reasons
 SWOT Analysis Of
Moblink
 Conclusion

 Bibliography

 Refrences

 Anextures
 5
Downfall of Mobilink

Mobilink

MISSION STATEMENT
“To be the unmatchable mobile system of
Communications in Pakistan this provides the best value to
its customers, employees, business partners and
Shareholders.”

Mobilink's Vision

“To be the leading telecommunication services

provider in Pakistan by offering innovative communication
solutions of our customers while exceeding shareholder
value and employee expectations”
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Downfall of Mobilink

Values

Total Customer Satisfaction:

Customers are at the heart of our success. They have placed their trust and
confidence in us. In return, we strive to anticipate their needs and deliver
service, quality and value beyond their expectations.

Business Excellence
We strive for excellence in all that we do. We aspire to the highest standards
and raise the bar for ourselves everyday. This commitment to delivering
worldclass
quality translates into unmatched service and value for our customers
and all stakeholders.

Trust & Integrity:

At Mobilink, we take pride in practicing the highest ethical standards in an
open
and honest environment, and by honoring our commitments. We take personal
responsibility for our actions, and treat everyone fairly, and with trust and
respect.

Respect for People:

Our relationships drive our business. We respect and esteem our employees
and all stakeholders. We believe in teamwork, empowerment and honor.

Corporate Social Responsibility:

As the market leader, we recognize and fulfill our responsibility towards our
country and the environment we operate in. We contribute to worthy causes
and are dedicated to the development and progress of the societ and y.
 7
Downfall of Mobilink

Pakistan Telecommunication
Authority

The telecom sector of Pakistan has seen phenomenal growth

over the past few years. According to the Pakistan Telecommunication
Authority (PTA), the total mobile phone subscribers in 2007 were more than
63 million, a growth of more than80% from the previous years. During 2006-
07, the mobile sector generated Rs 133 billion in revenues, an increase of 48%
from the previous years and contributed Rs 63 billion to the national
exchequer in terms of taxes and regulatory fees. The telecom sector
contributed 2% to the GDP in 2005-06 and received more than $1.8 billion in
foreign direct investment (FDI) in 2006-07 , which is 35.6% of the total FDI in
that period. Furthermore, the telecom sector has also created over one million
in jobs, since its deregulation, making Pakistan one of the world’s fastest
growing telecom markets. The Pakistan Telecommunication Ordinance 1994
established the primary regulatory framework for the telecommunication
industry including the establishment of an authority. Thereafter,
Telecommunication (Re Organization) Act no XVII was promulgated in 1996
that aimed to reorganize the telecom sector of Pakistan. Under Telecom
Reorganization Act 1996, Pakistan Telecommunication Authority (PTA) was
established in January 1997 to regulate the establishment, operation and
maintenance of telecommunication systems, and the provision of telecom
services. The telecom sector was deregulated in 2003.

Mobilink

Mobilink GSM (PMCL), a subsidiary of Orascom Telecom, started its operations

in 1994, and has become the market leader both in terms of growth as well as
having the largest customer subscriber base in Pakistan - a base of over 28
million and growing. The first cellular service provider to operate on a 100%
digital GSM technology in Pakistan that also provides state-of-the-art
communication solutions to its customers.
 8
Downfall of Mobilink

Mobilink offers exclusively designed tariff plans that cater to the

communication needs of a diverse group of people, from individuals to
businessmen to corporate and multinationals. To achieve this objective, we
offer both postpaid (Indigo) and prepaid (JAZZ) solutions to our customers.
Compared to our competitors, both the postpaid (Indigo) and prepaid (JAZZ)
brands are the largest brands of their kind in the Pakistan cellular industry.

In addition to providing advanced voice communication services that makes the

lives of millions that much easy, we also offer a host of value-added-services to
our prized customers. At the same time, Mobilink places high importance to its
coverage, which is why we cover you in 10,000+ cities and towns nationwide as
well as over 130 countries on international roaming service. In other words, we
speak your language, everywhere.

Orascom telecom

Mobilink launched its operations in August 1994 after it was founded in 1990
as a joint venture between Motorola and the Saif Group and awarded a license
for mobile telecommunication system and services in July 1992. Later on in
April 2000, Orascom Telecom bought 38.6% stake in PMCL, which it later in
February 2001 increased to 68.69% by purchasing Motorola’s share in PMCL
and Becoming the major shareholder of the company. In April 2001, Orascom
Telecom took over management control of the company. As of December 31st,
2007, Orascom Telecom indirectly owns 100% of the share capital of Mobilink
through direct stakes held by wholly owned subsidiaries of OTH. By December
2007, Mobilink had achieved 39.8% in market share, making it the market
leader in the mobile sector of Pakistan and had a customer base of more than
32 million by July 2008.

Network
Mobilink was awarded a 15-year license in July 1992 to establish and operate
a Digital cellular telecommunication system using the GSM 900 standard and
to offer telecommunication services in Pakistan. Mobilink has been growing its
network, providing 2G, 2.5G, GPRS and EDGE compatibility. Mobilink was the
 9
Downfall of Mobilink

first operator to start rolling out the Enhanced Data Rates for Global Evolution
(”EDGE”) in Pakistan.

Years of Business 13

Cities 7000+

Investment USD 1 Billion+

Switches 66

Cell Sites 6,300

Optical Cable Deployment 5,000 KM

Switch Types Nokia-Siemens, Alcatel, Huawei

Radio Base Stations Motorola and Alcatel

Intelligent Networks Siemens

Microwave Equipment NEC and Alcatel

Operating Frequency 900/1800 MHz

SMSC Logica CMG

In addition, Mobilink also launched its BlackBerry service in December 2005

through its GPRS platform. Mobilink is committed in providing the best
network to their customers, which in recent times has expanded to more than
9000 cities and reaches over 66% of the total population and 99% of the urban
population as of December 31st, 20076.

Organogram
 10
Downfall of Mobilink

President and CEO

Rashid Khan

Chief Information Officer

Tariq Rashid

Vice President Human Vice President

Resources, Administration Sales
& Security Jahanzeb Taj
Ali Raza Mehdi

Vice President Vice President

Marketing Customer Care
Bilal Munir Sheikh Irfan Akram

Vice President & Vice President

Head of Broadband Corporate Affairs
Business Division. Agha Qasim
Mustafa Peracha

Chief Technical Vice President/

Officer Chief Strategy
Ramy Reyad Officer
Kamel Mr. Aamir

Products
 11
Downfall of Mobilink

1.Jazz Prepaid
2.Indigo Postpaid
3.Blackberry Services

They offer tariff plans that are exclusively designed to cater to the
communication needs of a diverse group of people, taking into account
occasional users to businessmen. To achieve this objective, they offer
both postpaid (Indigo) and the prepaid (JAZZ) services to their
customers. Jazz is an amazing prepaid service that allows freedom from
monthly bills and gives complete control over the customer’s cellular
expenditure. The user can decide in advance when and how much he
wants to spend. He can load a scratch card whenever he wants to and
start talking. Jazz is simple, easy and loads of fun. not only Indigo and
jazz mobilink have 13 more products given below,

1.Mobilink Indigo 2. Mobilink Jazz

3.Mobilink BlackBerry 4.Mobilink PCO
5.Mobilink WiMAX 6.Mobilink TV
7.Mobilink Game ON 8.Jazz Cricket SIM
9.Conference Bridge 10.PSO Cards
11.PIA Reservations 12.Stock Watch
 12
Downfall of Mobilink

13.Fax Mail 14.Corporate SMS

15.SMS Advertiser

VALUE ADDED SERVICES

In addition to providing advanced voice communication services, they

also offer a number of value added services to their valued subscribers.

1. GPRS 2.Mobilink Mustt Services

3.SMS Messaging 4.Power Tools
5.Chat Services 6.Dedication Services

7. Power Tools 8.Mail Services

9.Info Services 10. IVR Ring tones/Logos
11.On Call Services 12.Missed Call Alerts

Strategic Business Units of

Mobilink
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Downfall of Mobilink

• Jazz One

• Jazz Budget

• Jazz Ladies First

• Jazz Easy

• Jazz Octane

• Mobilink Indigo

• Mobilink PCO

Classification of SBUs according

to growth-share matrix:

CASH COW

•Jazz Ladies First

•Mobilink Indigo

•Jazz Budget

STAR
 14
Downfall of Mobilink

•Jazz One

QUESTION MARK

•Jazz Easy

•Mobilink PCO

DOG

•Jazz Octane

Downfall of mobilink

What is downfall?

“Failure that results in a loss of reputation”

“a sudden decline in strength or number or importance;”

www.wordnet.com

“A sudden loss of wealth, rank, reputation, or happiness; ruin”

Merriam Webster
 15
Downfall of Mobilink

“Something that causes severe impairment, as of one's health,

fortune, honor, or hopes”

www.dictionary.com

Literature review

effect of economic recession on

Pakistan telecom

babbar bhatti
www.telecompk.n
et
In pakistan the inflation is around 25% and prices for necessities of life have
skyrocketed. Real gdp growth has fallen to 3.6%. Naturally telecom has taken a
hit. In the past few years consumption was encouraged and that resulted in
more consumer spending on phones (draining the foreign exchange) and on
voice and data. More first time users of mobile services signed up. Now with the
 16
Downfall of Mobilink

rough patch in economy, government has raised taxes on handsets (to

discourage import) and the services (to squeeze more revenue).
Even in these times the growth and new services potential remains compelling
because:

1. Over 100 million population are less than 30 year of age and they are highly
likely to use tecnology and communication services
2. Incomes are rising among certain sectors including middle income
3. Business and investment friendly policies - overall environment determined
by political and security situation
4. Regulator (PTA) continues to engage in reforms and is executing well

The conclusion is that if the politics and security situation does not
worsen, Pakistan should do fine. Here are a few of the recent announcements
from the global telecom media. Other than the voluntary separation plans from
PTCL, we have not seen large scale work force reduction in Pakistan.

• AT&T to Slash Work Force

• Blackberry Sign-Ups Miss Target
• Global Mobile-Phone Sales to Fall
• Nokia Cuts Mobile Phone Mkt Forecasts Again
• Gartner: Smartphone Sales Slowdown To Continue
• Nortel cuts jobs and lowers forecast
• BT British Telecom Lay off Job Cut: fires 10000
• Telecom Italia to Cut 4,000 Jobs

Foreign direct investment in

telecom sector of Pakistan drops
Zulqernain tahir,

Oct 22, 2008

 17
Downfall of Mobilink

Dawn news

According to the third quarterly report of the Pakistan Telecommunication

Authority (PTA), the total FDI in the sector was $1,824.3 million in 2007 which
dropped to $1,438.6 million in 2008.

The authority maintains that main reason behind the decline is that cellular
operators have already invested huge amounts to roll out the infrastructure,
and, secondly, the local financial market has enabled them (operators) to
generate sources locally.

However, the operators are of the view that 'current uncertain situation' has
played a major role in keeping the FDI at bay. It is learnt that major investment
by the leading operators may not resume even next year owing to prevailing
economic and political uncertainty.

On the other hand, the PTA report reveals that subscribers' growth rate has
also registered a decrease of 61 per cent this year as compared to the
corresponding period last year.

By June last year, total subscribers were 63 million and the number has risen
to 89.5 million by Aug this year. The number of PTCL subscribers has also
reduced from 4.6 million to 4.4 million this year, the report says.

By August this year, Mobilink has a subscriber-base of 31.5 million, Ufone

18.6, Telenor 18.3 million, Warid 15.9, Zong 4.8 million and Instaphone
321,134.

The reason of decline in the subscriber-base is said to be imposition of high

taxes. A mobile user has to pay almost 31 per cent in terms of taxes/service
charges which is at least 14 per cent higher than anywhere in the world. Now
every customer has to pay Rs5 more in terms of service charges to the mobile
phone company on topping every recharge of Rs100.

The stiff competition among cellular companies has compelled them to lower
their call rates with an aim to capture subscribers' market, which is also
resulting in decrease in their profitability.

The PTA report further reveals that teledensity of mobile phones has only
reached 55 per cent in the country, an increase of only 11 per cent to that of
registered in 2007. It belies the claim of those even in the PTA that 'around 90'
per cent of the total population of the country now has cell phone coverage.

Public voices about downfall

 18
Downfall of Mobilink

“Mobilink, the market leader, saw a drop in mobile subscriber base which fell
from 28.315 million to 28.116 million during January-February 2009.”[5]

“Not only sales and number of SIMs are a part of strategic failure of Mobilink but
also its policies including highly hiked operational expenses, detested packages,
deplorable services and deceptive marketing practices”[6]

“Mobilink, the Pakistani incumbent, has lost more than 2,000,000 subscribers
driven by interrupted service and blocking of illegal SIM by Pakistan
Telecommunication Authority (PTA). Mobilink’s subscriber base now slided from
32 million to 30 million. It is seen that out of the 20, 00,000 subscribers, 7,50,000
have ported their numbers to other subscribers and the rest 12,50,000 have been
blocked by PTA after they were identified as illegal SIMs. Mobilink has been
facing such problems due to poor quality of services.
On the financial front the operator is going through a crisis bringing the jobs of
many on stake and has been fined in past with millions of rupees by PTA for
interrupted service.The subscribers with Mobilink are seen to be using number
portability more than any other Pakitani operator.”[7]

“Statement from the China Mobile Chairman that China Mobile sees their
Pakistan operations as a valuable experience for its subsequent international
ventures, will surely put the existing big boys of cellular services in Pakistan like
Mobilink and Ufone on high-alert and may be give them sleepless nights.”[8]
 19
Downfall of Mobilink

“Mobilink, once the market leader in innovation and new ideas has not been able
to find a single new idea for its WiMAX services. They are now "stealing" ideas
from their biggest rivals, Wateen. The products and services they are working on
and will be offering soon are:

1. Online gaming service (I wonder how they are going to put up so many
servers)
2. IP Video Surveillance
3. IPTV
4. VAS Portal (with music, movies and stuff)
5. Video Telephony”[9]

“Mobilink forcly terminated their one thousand employees in all over Pakistan
from administration and security department without any notice. Mobilink face
financial crises.”[10]
 20
Downfall of Mobilink

Major downfall reasons

Affordability versus availability:

Higher operational Cost
Mobilink started with owned technological resources which increased
operational cost. The higher cost started acting as downfall with the
increased competition and availability of cheaper networks. Mobilink
offered high incentives for its employees as well as high amount towards
advertisement campaign and brand imagery by focusing on uptodated
service centers and head office interiors. They started with their own
network lines throughout covered areas. Higher operational cost resulted
in higher amount to be paid from lower end customer. Major customer
share is now related to Middle and lower class of Pakistan. Due to
increased economical recession even corporate sector is turning towards
affordability.

Detested packages: Loss of

reliability
Mobilink offered a packaged named JAZZ LADIES FIRST. The package
consisted of lower rates of Rs. 5+ GST per hour 11pm-6am. This package
was innovation in Telecom sector and attracted a huge amount of
customers. As people started using Jazz, the mobilink’s infrastructure
was not capable enough to carry out such a huge load once the clock
ticked 11 pm. The whole corporate sector faced this problem with greater
intensity. Mobilink took quite a long time to get back to improved
infrastructure but it lost Customer’s satisfaction Level.
 21
Downfall of Mobilink

Deceptive marketing
practices: Lack of quick
response

With the arrival of Zong, A china Mobile Company, the competitors in

market [Ufone, warid, Telenor] focused on introducing lower rates for
Smart Messaging Service, but mobilink did’nt put forward any innovative
package for the particular service to compete in market. SMS is now a
craze for a major customer group especially teen agers. Mobilink sat
back and did’nt put forward any special competiting package for a long
period of time. Meanwhile customers moved toward cheaper packages.

Mobile Number portability:

Blockage of illegal SIM use

Pakistan telecommunication Authority, PTA, blocked usage of illegal

SIM’s. Now if you buy a new SIM, you have to dial 789 and the operator
may ask u about your Identity Card No., ID card no. connects operatot to
the database of NADRA. Then operator will ask you few questions about
your identity for example your Mother’s name etc. Once you have
confirmed your identity you are allowed to subscribe to your subscriber
network. By the launch of MNP, a large number of subscriber base who
were illegally using SIM’s was destroyed. According to NAWA e WAQT 3
Million people in Pakistan are still using Illegal SIM’s.

Swot analysis of mobilink

 22
Downfall of Mobilink

Strengths:
• Considered very strong and reliable
• Captured most of the potential customers (28 million and growing)
• Covering over 10,000 cities, towns and villages across the Pakistan[10]
• First operator to introduce IR for the people of Pakistan
• Only cellular service in Pakistan to provide coverage on the M2
motorway.
• A very strong brand image
• Highest market share not only in terms of number of subscribers but
also in terms of revenue.
• Mobilink has signed bilateral roaming agreements with 50 operators
around the world to have true roaming service operational in over 42
countries of the world.
• In order to facilitate its international Roaming subscribers traveling to
USA and Canada, Mobilink is offering Motorola Timeport Triband (TT)
handsets on rental basis. These sets are available at all Mobilink's
Customer Service centers.
• Mobilink's short message service center allows Vehicle Tracking and
Fleet (VTF) Management services.
• Large number of corporate customers.
• Economy of scale.
• Mobilink and Muslim Commercial Bank have made a combined effort in
order to maximize the ease and the satisfaction of their respective
customers by offering them all banking services from their very own
mobile handset.
• Only company offering corporate packages
 23
Downfall of Mobilink

Weakness of mobilink
• Currently providing not good quality service because of changing their

network from 900 MHz to 1800 MHz.

• Fewer advertisements now days.

• Most expensive telecom company both in call rates and SMS
• Engineering department of Mobilink is not that well competent as
compared to its new competitors
• Customer retention Side is weak due to expensive packages

Opportunities:
Can expand its networks in the uncovered areas

Services in the future can be

 Telephone
 Wireless
 Calling Cards
• Mobile Phone Banking
• Before start of new companies can target as many new customers as they
can.
• Can lower prices to make business difficult for new companies

Threats:
 New market players are coming in near future.
• New companies can offer packages for corporate customers
in better way.
• Wireless local loop service providers too targeting areas
 24
Downfall of Mobilink

which are less developed.

• Current price war may reach at a position where only
brand names survive.
• Due to expensive quality of service now a days customers
can shift to other companies.
• Employee retention is also issue because mobilink fired 1000
employees in October 2008.
• Loss of loyal customer

Conclusion
 25
Downfall of Mobilink

Mobilink still has power and Brand Image as well as corporate Impression. It
still needs a long time period and recession to get beaten by competing
companies. Mobilink is major cellular company and will stand in first place many
years to come. With professional approach and highly skilled staff behind Mobilink is
the premier choice for subscribers nationwide.

References
 26
Downfall of Mobilink

PTA, Pakistan Telecommunication Authority [www.pta.gov.pk]

1. http://www.zenblog.co.cc/2008/11/mobilink-contineous-its-downfall-
warid-takes-top-level/

2. Daily Times, July 27,2007.

3. www.wirelessfederation.com/news

4. www.flare.com.pk

5. www.wirelessfederation.com

www.techturtle.com

Bibliography

MNP Moibile Number portability

PTA Pakistan telecommunication Authority