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Introduction
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1.0. Introduction
Internship program is essential for every student, especially for the students of Business
Administration, which helps them to know the real life situation. It helps them to launch a
career with some practical experience.
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Theoretical knowledge is obtained from a course of study; it is only the half way of the
subject matter. Practical knowledge has no alternative. A perfect coordination between
theory and practical is of paramount importance in the context of the modern business
world in order to resolve the dichotomy between these two.
As per norm this report is the requirement of the fulfillment of the internship program.
1.3. Objective of the Report: The following objectives are the definite goal of
preparing the report.
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To discuss about the activity of the Local Treasury Unit of GrameenPhone Ltd.
To discuss about the activity of the BTS Unit of GrameenPhone Ltd.
To focus on the most resent financial improvement and market position of
GrameenPhone Ltd.
To find out the opportunity for timely payment provided by GrameenPhone Ltd.
To obtain the valid information about the overall payment procedure to the
suppliers and service providers.
To identify the products and services of GrameenPhone Ltd.
To study the customer relationship with GrameenPhone Ltd.
To provide information of my responsibilities while working as an internee.
To present some different cases about GrameenPhone Ltd.
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1.5. Methodology:
For the purpose of the study data and information have been collected from both
primary and secondary sources.
Annual report.
GrameenPhones official website.
GrameenPhones intranet.
Manuals and publications of GP and GSM Association.
Monthly financial newsletters of GP.
Monthly newsletters of GrameenPhone Ltd.
Prior research report.
Any information regarding the Telecom sector.
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1.6. Limitations of the report:
Several drawbacks that appeared at the time of preparing the report and hindered the total
work process are as under:
It was difficult to make information based rich report in a short time period.
For the security of the company many information was not provided to me. So in
some case it was difficult to identify the actual condition of the company.
It was very difficult to identify the present situation of the organization in such a
small period of time.
One of the main barriers of the report was the confidentiality of the data.
The company does not have sufficient sources of secondary data and collecting of
data was not smooth.
Analyzing financial data is much more confusing and complicated than any other
data.
I was assigned in a unit with the jobs related to the Local Treasury Unit which is
the most confidential sector of an organization so it was really difficult for me to
accumulate confidential financial data.
Rush during working hours was another reason that acted as an obstacle while
gathering data.
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Chapter: 02
An Overview of
GrameenPhone Ltd.
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2.0. An Overview of GrameenPhone Ltd.
GrameenPhone Ltd is the leading mobile phone company in Bangladesh with the largest
no. of customers to serve with. The company has a customer base of 20 million and the
number is further growing. Last year more than 8 million people made GrameenPhone
their preferred service provider and in this year the numbers of customers have reached to
20 million. With more than 81% growth the market share remained steady at 62%, even
though the overall competitive environment had considerably intensified.
Strong internationally reputed companies like Orascom and Singtel have entered to the
market in late 2004 while a fifth operator, government owned TeleTalk, also launched its
services in 2004. A sixth mobile phone operating license was awarded to Warid Telecom
of the Dhabi Group in the United Arab Emirates, in 2007. This way the industry is
becoming increasingly more competitive because of the entry of these internationally
experienced operators.
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2.2. Background of GrameenPhone Ltd.
In November 28, 1996 GrameenPhone Ltd was offered a cellular license in Bangladesh
by the Ministry of Post and Telecommunication. Then in March 26, 1997 GrameenPhone
first launched its services on the Independence Day of Bangladesh.
In June 1998 GrameenPhone started its services in the port city of Chittagong, the second
largest city in the country. Cell to cell coverage in the Dhaka-Chittagong corridor also
enabled GrameenPhone to introduce its service in a number of other districts along the
way.
In 1999 GrameenPhone started its service in the industrial city of Khulna. Once again, a
number of other districts came under coverage of GrameenPhone because of the cell to
cell coverage between Dhaka and Khulna.
In 2000 GrameenPhone started its services in Sylhet, Barisal and Rajshahi, bringing all
six divisional headquarters under the coverage of its network. The service in Barisal
region was started after the microwave link between Khulna and Chittagong was
completed.
After six years of operation, in August 2003 GrameenPhone has more than one million
subscribers. And from November 2005 GrameenPhone continues to being the largest
telecommunication operator of Bangladesh with more than 5 million subscribers.
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the total population, GrameenPhone provides the distinct market leadership in the midst
of emerging stiff competition.
The brand image of GrameenPhone along with continuing innovations in products and
services, quality network coverage and committed customer service, made
GrameenPhone the preferred telecom service provider of the people of Bangladesh.
2.3.1. Vision
GrameenPhones vision is Were here to help. That means GrameenPhone Ltd exist to
help the customers get the full benefit of communications services in their daily lives.
They want to make it easy for the customers to get what when they want it.
2.3.2. Mission
The mission of GrameenPhone Ltd is to provide a total communication solution to its
customers. To do this the service development of GrameenPhone has significantly
developed over the last few years. GrameenPhone subscribers can now enjoy all the
modern data communication and content services. Mobile office, internet access, MMS
and modern music and download services are available through the nationwide EDGE
enabled network.
2.3.3. Objective
GrameenPhone Ltd. has a duel objective to receive an economic return on its investments
and to contribute to the economic development of Bangladesh through
telecommunication. This is why GrameenPhone, in collaboration with Grameen Bank
and Grameen Telecom, is aiming to place one phone in each village to contribute
significantly to the economic benefit of the poor. It is on the way to bring a total
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revolution in the telecommunication field. By attaining the success factors,
GrameenPhone would like to be recognized as a reliable, honest and committed company
to its valued subscribers and stakeholders.
2.3.4. Values
Make it Easy
Keep Promises
Be inspiring
Be respectful
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2.4. Operating Coverage of GrameenPhone Ltd.
Presently GrameenPhone has covered 440 upazillas of 61 districts. 99% of the total
population is under coverage of GrameenPhones network. In the map below the existing
coverage of GrameenPhone is shown. The light green portion shows the proposed
coverage level which will be covered within December of 2007.
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2.5. Management and organization structure: Management and
organization structure of GrameenPhone Ltd. are given in the following -
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2.5.3. Organogram and Management of GrameenPhone Ltd.
CEO
Oddvar Hesjedal
Special Initiatives*
Internal Audit
Senior Assistant to
Farhad F Ahmad
CEO*
TBA
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2.6. Description of different divisions and departments
The departments are independent from any divisions. The names of 5 departments are:
Administration Department
Revenue Assurance and Fraud Management Department
Information Department
Internal Audit Department
Legal and Compliance Department
There are also two projects running under observation of Deputy Managing Director. The
projects are independent of Projects division. These are:
CHQ Project, and
Efficiency Project.
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Among them the respective directors head ten divisions. Marketing division is headed by
a deputy director. A General Manager heads Information Department. He has to report
direct to the Managing Director. Head of supply chain management has to report directly
to the director of Finance Division. This responsibility is added recently to the Director,
Finance Division.
Call center responds to customers' query. 150 to 190 people working in shifting basis in
call center provide 24 hours service to the customers through telephones. They receive
queries and complaints related to GP service and network, solve them, provide different
types of information to the clients etc.
Billing department is mainly responsible for billing customers for the service and
collecting the revenue from them. This department works with the help of its eight units.
The units are distribution unit, general banking unit, bank reconciliation unit, bank
communication unit, collection unit, credit recovery unit, fraud management unit and
revenue assurance unit.
Trainee development department arranges all sorts of in-house and overseas training
programs for the employees. Experts from within the GP family conduct in-house
training programs. These programs include orientation for new employees, team-building
workshops, customized training for the senior managers on management style,
motivation, and project management and handling difficult situations. Many GP
employees are sent to foreign countries for overseas training, workshops and seminars.
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All the organization and formalities concerning these programs are done through this
department.
The Finance Division holds 330 employees in its various departments. The Division
encompasses all financial activities - both internal and external. The purpose of each of the 12
departments is given as follows:
Investment Controller
Review new investment proposal as project or programs
Prepare business case
Advice management and investment committee
Re-rank the investment options
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Review policies and procedure in place and pass suggestion for continuous
improvement
Capital Market
Coordinate overall financing function
Ensure and monitor compliance to the financing agreement
Responsible to lender, Telenor and Bangladesh Bank related to financing issues
Liaison with foreign lenders, sponsors, bankers and regulators
Arrangements of short term financing from local banks.
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Capitalization WIP
Land and land advance
Insurance - fire and business interruption
International Settlement & Insurance
Letter of Credit for all imports
Leasing, insurance and contracts
International roaming and receivables, payables and invoicing
All foreign payment and employee foreign travel and training payments and
advances
Treasury Department
Fund management
Cash rolling forecast
Local payments
Bank reconciliations
Employee gratuity and provident fund
Revenue Accounting
Collection of prepaid, post-paid and international roaming bill from subscribers
Recognition of prepaid, post paid revenue and revenue from all sub leases
Reconciliation of all collections
Handset payment management
Banking arrangement for collection
Costing of inventories
Invoicing to subleases and collection
Participation in revenue assurance activities
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Foreign Procurement
Logistics Procurement
Contract
Inventory Control
Sales and distribution division has the opportunity to have direct interface with the
customers. The number of employees working in this division is 1588. This division is
subdivided into two part- sales department and distribution department.
The responsibilities of the part or the distribution department includes instant delivery of
products and services, maintaining relationship with dealers, serving the corporate clients
with extra care, follow up existing subscribers and building relationship with new and
existing subscribers. One of the most important tasks of sales department is sales-
forecast.
The Information Technology Division became a separate division in 2003. Till then it was
under the wing of Personnel & Organization Division.
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Information Security
Core Systems
Objectives are:
- Development/integration of business critical systems
- Maintenance of business critical systems
IT Operations
Objectives are:
Access control, accessibility and stability for end- and IT-users
Operations, planning of operations and monitoring
Security
Readiness
Information Security
Objectives are:
Design, develop and deploy a security infrastructure including intrusion detection,
protection, assessment and management
Publish, monitor and enforce information and computer security policies
Supervise and/or conduct periodic security assessments
Manage long-term projects to improve security posture and capabilities
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Business process modeling
Exception handling
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2.6.5. Human Resource Division
Human resource department plays a very important role in the functioning of the
organization. The main tasks of this department are employee recruitment, selection,
transfer, promotion, training, performance appraisal, manpower planning etc. Different
divisions send their personnel requirement to HR department. Then HRD sets target,
prepare recruitment planning and go for the recruitment process. When an employee is
recruited a separate employee file is opened comprising of all information of the
particular employee which is regularly upgraded by HRD. This department is also
responsible for performance appraisal, manpower planning etc. Different divisions send
their personnel requirement to HR department. Then HRD sets target, prepare recruitment
planning and go for the recruitment process. When an employee is recruited a separate
employee file is opened comprising of all information of the particular employee which is
regularly upgraded by HRD. This department is also responsible for performance
appraisal of employees that is very important for the confirmation, increment, promotion,
transfer of employees. This is done through job analysis, setting up of performance
standard and appraisal interview.
This division looks after the regulatory and interconnection issues. It is responsible for
maintaining close relationship with BTRC, MOPT, PSTN operators and mobile operators
for matters related to interconnection with fixed and mobile operators, and
interconnection & Revenue Sharing Agreement.
This division is also responsible for maintaining relationships with Ministries, the
National Parliamentary Telecom Committee, Government agencies like the Board of
Investment (BOI), the National Board of Revenue (NBR), and law-enforcing agencies.
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department. People working in planning department build the technology while people
working in operations department maintain the technology. Implementation is between
the two. Most of the people in the technical division are from the engineering and
technological educational background.
People in planning department are responsible for planning the network and equipment,
taking decision about new expansion, enhancement and up-gradation and closely
monitoring network performance. They are also engaged with BSC (Base Station
Controller) and MSC (Mobile Switch center) related planning, timely supply of
equipment, making roaming agreements with other countries and negotiating with home
owners for building base stations on the roofs. This department has three parts: switch
planning, radio planning and transmission planning.
The people of implementation department are responsible for the construction and
acquisition of base station room, antenna pipe, and power supply etc., installation of new
base station hardware, start-up and pilot operation of base station. It is also divided to
three units: site acquisition, civil works and roll-out.
The Fiber Optic Network (FON) Division is a full-fledged Division under Deputy
Managing Director. It manages the nationwide Fiber Optic Network, and to create and
sell the Transmission Capacity commercially to prospective business units/clients.
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The division shares use of FON capacity with third parties such as other telecom
operators, ISP's DDN service provider etc. GrameenPhone is capable of offering point to
point full E1 connectivity within GP Transmission Network for their sub-lease clients.
Marketing is responsible for all types of Product development and launch, Branding and
communication, International Roaming, Value Added Services and all types of Research
activities. The Division comprises the following departments: Product and Market
Development Department (PMD), Market Research and Planning Department (MRP),
Market Communications Department, Brand Development and Management Department
International Business Department, Value Added Services Department.
The Product and Market development Department includes Products & Prices Section
(Business Solution, Djuice and, Mass), New Product development and Innovation lab,
and Forecasting and Analysis Section. Market Research and Planning Department
includes Segmentation, Research & Planning Section and Market Intelligence - acting as
a central research point for GrameenPhone. The International Business Department is
involved in international roaming services while the Value Added Services Department
includes Service Development and Management Section, Content Provider / Aggregator
Management Section, CPA/CSF Platform Section and Advanced Services section. The
Market Communication Department deals with media management, event management
and regional marketing.
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management efforts within IT. This division gathers project information and maintains a
list of current project activity for IT including project timeframes and resource utilization
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2.6.15. Legal and Compliance Department
This is a one unit department whose major functions comprise as follows:
To ensure sufficient legal coverage and minimum exposure to risk
To establish high standards of corporate governance
To build GP's image as a compliant organization both among its customers
its other stakeholders.
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Chapter: 03
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3.1. Products of GrameenPhone Ltd.
GSM Features
Caller ID
Display of the phone number of an incoming call in the handset before the call is
answered.
Call Waiting
While talking to the first caller, the GrameenPhone customer will hear a special tone
informing him/her about the second call on the line. At that moment he/she can put
the first caller on hold and talk to the second caller.
Call Conference
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Receiving calls from multiple callers can be supplemented by joining these multiple
callers so as to enable them to talk to each other. The GP customers will be able to
communicate with a group consisting of maximum five callers. This feature depends
on handsets.
Call Divert
Call Divert lets the GP customers redirect or re-route the call to another
GrameenPhone mobile or any other fixed (if the GP customer have BTTB
connectivity) or mobile phone.
Call Barring
It enables the GP customers to restrict certain types of calls to be made from the
mobile. This feature is especially important for security purposes.
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Voice Message Service also has been introduced.
Clients can use this service even on the move within GPs coverage area.
WAP provides easy, secure access to the Internet in text format through the mobile phone
within the GP coverage area. Recently Internet and Multimedia Media Message Service
(MMS) have been introduced.
EDGE Service:
EDGE also provides easy, secure access to the internet in its full graphical format.
3.2.1. Branding
GP is committed to build on its already strong brand equity, and the company has already
achieved a high level of recognition after being only for three years in the market.
3.2.2. Promotions
GP uses frequent campaigns to drive subscriber growth. The campaigns are based on
promotional pricing and take place roughly every other month.
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In order to be successful and preferred by GrameenPhones most important stakeholders
i.e. small & medium enterprises, individuals, Village Phone users and sub-lease clients of
transmission capacity the GrameenPhone will be recognized by the following distinctive
features:
Wider Coverage
Competitive tariff
Apart from the main distinctive features, in order to be successful in relation to GPs
owners/shareholders they will also focus on increasing the subscriber base, Average
Revenue per User (ARPU) that will increase company value. They have to build good
brand value among all segments and be more organized for better reporting.
Figure 3: Revenue Earning of GrameenPhone Ltd (in million BDT) from 2002 to 2005
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GrameenPhone Ltd currently has 60% of the market share. It generates high revenue and
each year it is increasing. In 2004 GrameenPhone generated revenue of 19,700 million
BDT but in 2005 it increased to 29,628 million BDT.
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Base stations are very much important for GrameenPhones sound network coverage.
From the chart above it is seen that the no. of base stations have in creased from 1400 in
2004 to 5132 in 2006.
Figure 6: No. of subscribers of GrameenPhone Ltd (in million) from 2002 to 2006
The no. of subscribers has reached in 2008 to more than 20 million from 15 million in
2007. From the figure we see that every year the no. of subscribers had nearly doubled.
GrameenPhone Ltd. is a company with ever increasing growth trend from the very
inception phase. At present, in the 12th year of its operations GP has achieved a subscriber
base of more than 20 million. The company has a number of plans for the forthcoming
future.
Within 2008, GP has the target to reach a subscriber base of 20,000,000. Within that year
the company is intended to cover 64 districts of the country. With this target GP will be
able to cover almost 88% land area and 98% population of the country. Taking all the
probable threats in the industry under consideration, including the TeleTalk of BTTB
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mobile phone connection, GrameenPhone is intended to keep its market share at least
49% by 2007.
In order to reach company goal for the long term GP have set their objectives related to
their stakeholders for the short term and the long-term period. For Customers (mainly
SME) and share holders GPs long term objective is to have 80% of customers satisfied
and churn level less than 7% due to expansion of core network elements and increase
coverage to all 61 districts (130,000 sq. kms). GP will achieve 85% service level
according to Automatic Call Detector report and network performance will be according
to set criteria and list of Grade of Service. And they will be the no. 1 choice with a high
market share due to low start up cost and number of products simplified to 4 and 575
Points of Sales. GPs shareholders will be satisfied due to positive financial results, good
net result, and the fact that GP has had a successful IPO.
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Chapter: 04
SWOT Analysis of
GrameenPhone Ltd.
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4.0. SWOT Analysis
Strengths and weaknesses are the micro environmental factors influencing a business
which are within the organization. Opportunities and threats are the micro environmental
factors that influence all the firms in the industry. They are present in the whole industry.
The following figure shows the strengths and opportunities that GrameenPhone Ltd.
enjoys as well as weaknesses and threats that the company faces.
Strength
Coverage
International roaming
Distribution Channels
Pre-Paid service
Low price handsets with quality and
variability
Lease of Fiber-Optic cable from BR
Opportunity Threat
Unmet demand Aggressive marketing by competitors
Possibility of further network expansion Introduction of WARID mobile phone of
Increasing interconnection with BTTB Dhabi Group.
Favorable Regulatory Authority Better relationship of competitors with
Possibility of innovative products and regulatory body.
services
Weakness
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Chapter: 05
Chapter: 05
38
5.1. Name of the Departments in Finance Division:
Financial Management
Treasury Operation
Collection Network & Fund Management
Supply Chain
Capital Market
Financial Control
Reporting: Own the process of Financials reporting both Group and local.
Accounting : Ensure accounting compliance in line with standard principles &
group policies,
Revenue Assurance & Fraud Management: Ensure roburst revenue flow
without any leakages. Bad debt management and fraud management.
Taxation & Fiscal Compliance: Secure compliance with the taxation and other
fiscal laws and manage relationship with related authorities.
Financial Planning: Steer and manage the process of Business Planning &
Budgeting.
Business Support & Control: Support respective divisions on financial
management, planning, analysis and ensure financial control
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Manage transaction outflow for accounts payable
Compliance to all Foreign Exchange Rules and Regulations
Maintain treasury operation of regions including support to network sub centers.
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Investment Control: Appraise all company investments and ensure right
prioritization.
Internal Control: Ensure adequate internal controls are set, updated and
monitored for whole company with focus on process efficiency.
Transaction Control: Ensure compliance to all payments with added focus
on justification of expenditure.
Chapter: 06
41
42
6.1. Introduction
GrameenPhone Ltd has a huge reputation that it makes payment to its suppliers in time.
And much of the credit goes to the Treasury Department of the Finance Division.
Treasury Department is responsible for all the payments that GrameenPhone makes to its
local suppliers. GrameenPhone has a large number of suppliers and service providers.
These peoples contribution is very much needed in the company to achieve its goals.
Most of the suppliers and service providers have a long term relationship with the
GrameenPhone. This relationship is very much important because it award a competitive
edge to the company both in terms of price and quality.
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Non PO Unit
Non PO means Non Purchase Order. The payment amount ranges
from BDT 1500 for this type of vouchers. And authorization of Supply Chain
Department is not needed in here. The user department (Department that incurs the
cost) just issues a work order with acceptable authorization to validate the expense.
The type of vouchers and bills include Rent-a-Car, Security, Hotel and Restaurant,
Hospital, Training, Courier and Procurement. Hard Furnishing, Education Grant,
Car Loan and Salary of the employees are also paid from the Non PO Unit. A new
type of responsibility is assigned to Non PO unit and that is LC clearance bill to the
C and F agents.
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Utility and Rent Unit
This unit pays the utility bills, rents of the flats and offices and all
type of Warehouse, GPC and GPSD office related bills. Utility bills include land
phone, sewerage, water, electricity and gas bills of all offices of GrameenPhone.
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Below the payment procedure is described step by step:
Vouchers receiving
Suppliers send vouchers and bills to the user department. After error checking the user
department (Supply Chain Department in case of PO type vouchers) sends the vouchers
to treasury department.
Payment Cycle:
5th Payment Cycle From 19th to 26th day of previous month.
12th Payment Cycle From 27th day of previous month to 5th day of continuing month.
19th Payment Cycle From 6th to 12th day of continuing month.
26th Payment Cycle From 13th to 19th day of continuing month.
Table 1: Payment Cycle
In each payment cycle, bills are paid in that day of the month. For example, if a bill is
received in between 19th to 26th day of the month, it will be paid on the 5 th day of the next
month.
Then the invoices are created in the ERP. It is same like writing in general journal. In
here, GL (General Ledger), RC (Responsibility Center) no. and Tax Codes are entered
carefully. GL no. is same like account no. They are just serial no. of many types costs
associated with GrameenPhone Ltd. RC no. is the serial no. of different departments.
They are used to link the costs with related departments.
GrameenPhone Ltd. always withholds the VAT and TDS (Tax deducted at Source) portion
of the payment amount from the suppliers and pays the VAT and TDS on behalf of the
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suppliers. So Tax codes are entered carefully in ERP system to deduct the correct amount
of TDS and VAT.
Error Checking
After creation of invoice the vouchers are sent to Financial Control Department. There
the invoices are checked in the ERP to see whether any mistake is done or not. After the
checking each invoices are approved in the ERP.
System Payment
After the invoices are approved by the FCD, the payment is made in the system. This
means the liabilities that were created while in invoice creation step is now all paid in the
system. However in real terms, the payment is not yet made to the suppliers.
Upload Entry
After payment entry upload entry is made in the MS Excel. In this entry supplier or
beneficiary name and taka amount is written. Other information regarding TDS, VAT and
bill no. are also written. All these information are printed in the check.
Compare
Then the MS Excel entry is compared against the bills. If there are any mistake in the
excel sheet, the entry is corrected. This comparison is done by the Financial Control
Department. This prevents wrong payment to suppliers.
Upload
Then the excel entry is uploaded to the Citi NA Server using the Upload Manager
software.
Approval
Then all the entry is approved first by the manager of Treasury Department and then by
the Director, Finance Division.
Check Issuance
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Then managers checks are issued from the Citi NA Bank. These checks are distributed to
suppliers. Normally it takes 7 to 8 hours to print the checks from the Citi NA Bank.
Suppliers Queries
After getting the check suppliers come to do some queries about the payment. Most of the
queries are about the bill no. and deducted TDS and VAT. Some make queries about next
payment cycles.
Voucher Receiving
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Here vouchers are received from the user department.
Invoice Creation
Then invoices are created in the ERP. Then GL, RC and Tax codes are given.
System Payment
Then payment is made in the ERP system.
Cash Payment
Then cash is paid to the suppliers excluding the VAT and TDS.
Reporting
At the end of the day, the unit has to send a report to the Manager of Treasury
Department and to the Director of Finance.
5. Reporting
49
BTS towers, cost of setting up and servicing of generators etc. This unit has to work with
Site Acquisition Department side by side. Except rent other costs of Base Stations are
paid just as Non PO and PO type payment system.
Selection of Site
Site Acquisition Department chooses sites that are best suitable for the BTS tower.
Agreement Signing
Site Acquisition Department signs contract with the owner of the site and agrees to pay a
yearly amount as rent of the site.
Agreement Verification
Then the agreement is sent to the finance division for verification. Employees of finance
division verify whether the rent agreed for payment is justified or not.
Invoice Creation
Invoice is created in the ERP. Here no TDS and VAT are deducted. It is just like creating
a liability.
System Payment
Then payment is made in the ERP system. The liability that is created in the previous step
is fulfilled in this step.
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Hand over of checks
Officers of Site Acquisition Department then collect the checks from the Treasury
Department and hand the checks over to the beneficiaries.
Voucher Receiving
The unit receives utility and rental bills from the Administration Department. Then they
carefully sorts out the bills according to the urgency. This helps not to make any rent or
utility bill arrear.
Invoice Creation
Then invoices are created in ERP. Proper GL and RC codes are carefully selected. No Tax
codes are necessary in here because in utility and rental bills no tax deduction is
necessary.
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Error Checking
Then the vouchers are sent to the Financial Control Department. There the vouchers are
checked. If no errors are found then the vouchers are approved and then again sent bank
to the Treasury Department.
System Payment
After the error checking system payment is made. Thus the liability once created by
invoice creation is fulfilled by system payment.
Upload and Check Issuance
After system payment the beneficiaries names and amount is uploaded to the Citi NA
server. Then the manager of Treasury Department and Director of Finance Division
approves the upload. After some times managers checks are issued from the bank.
Check Conveying
Then the checks are conveyed to the proper authority.
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Chapter: 07
53
7.0. Base Station Unit
This unit is responsible for payments of any type that are related to base stations of
GrameenPhone. This include rent of roofs and fields where the BTS Towers are erected,
cost of constructing and servicing of BTS Tower, cost of setting up and setting of
generators for BTS Towers etc. Normally the rent of roofs and fields for the erection of
BTS Tower are paid in a yearly basis.
54
Figure 11: Area of function of BTS management unit
7.1. BTS Electricity bills: BTS electricity bill is one of the areas of BTS
management unit.
7.1.1. Mode of Payment: There are three types of mode of payment of BTS
electricity bills. These are given in the below:
Automation Payment
Bill payment through SCB
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Manual Checks
Preparation of DD & Pay orders in the name of respective House
(Through Citi Directory)
Cash Payment
Only for first bill of new site.
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Figure 13: Process flow of Electricity Payments (PDB/REB)
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7.1.2. Steps followed for ERP Entry
7.1.4. BR Payments
BR electricity bills & licensing fees are paid in the form of Cheque
periodically.
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7.2. BTS Rental Payment: BTS rental payment is another one of the areas of BTS
management unit.
7.2.1. Mode of Rent Payment: Modes of BTS rent payment are given in the
following:
Automation Payment
Transfer rent directly to the respective AC of HO.
Manual Checks
Step-1:
Receive agreement from SA.
Step-2:
Check signature based on authority level.
Step-3:
Maintain excel sheet by putting detail information.
Step-4:
Process payment including invoice creation into ERP.
Step-5:
Get approval from Financial Control.
Step-6:
Give payment entry and send it to Banks.
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Figure 15: Process flow of BTS Rental Payments
7.3. BTS Repair & Maintenance: BTS repair & maintenance is another one of the
areas of BTS management unit.
7.3.1. Description of Function:
Ensure process and payment of BTS Repair & Maintenance invoices (BTS
Ensure accounting and compliance checking, data Entry of Invoices into ERP
Ensure control checking of Payment summary report and process for payment
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Providing Data for monthly BTS Cost Report Analysis at the end of the
month.
Chapter: 08
Analysis
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8.1. Frequency of transaction of suppliers and service providers
Frequency Percentage
Once a month 32 34.78%
2 times a month 39 42.39%
3 times a month 13 14.13%
4 times a month 8 8.70%
Total 92 100.00%
Table 2: Frequency of transaction
From the survey it was found that most of the suppliers and service providers transacted 2
times in a month. Around 42.39% of the suppliers and service providers transacted 2
times in a month. 34.78% of the suppliers and service providers transacted only once a
month. 14.13% of the suppliers and service providers transacted 3 times a month. 8.70%
of the suppliers and service providers transacted 4 times a month.
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8.2. Continuation of operation with GrameenPhone Ltd.
Frequency Percentage
Less than 1 year 12 13.04%
1-2 year 34 36.96%
3-4 year 27 29.35%
Over 5 years 19 20.65%
Total 92 100.00%
Table 3: Continuing operation with GrameenPhone Ltd.
From the table we see that 36.96% suppliers and service providers were doing business
with GrameenPhone for 1-2 years. 29.35% of the suppliers and service providers were
continuing their business for 3-4 years. 20.65% of them were doing business for more
than 5 years and only 13.04% of the suppliers and service providers were doing business
with GrameenPhone for less than 1 year.
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8.3. Suppliers and service providers knowing the reason for holding bills
Frequency Percentage
Yes 19 63.33%
No 11 36.67%
Total 30 100.00%
Table 4: Suppliers and service providers knowledge about reason for
holding bills.
It is seen that among 30 suppliers and service providers 36.67% do not know the reason
why their bills are on hold.
Figure 18: Suppliers and service providers knowledge about reason for holding bills.
Frequency Percentage
Yes 50 54.35%
No 42 45.65%
Total 92 100.00%
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Though in the check payment information such as bill no., cost description, TDS and
VAT information are provided, suppliers and service providers frequently come for
additional information. It seems that the information provided in the check is not
adequate enough. From the study it is found that 54.35% of the suppliers and service
providers came to GrameenPhone office for collection of additional information about the
bills that are paid.
Frequency Percentage
Cost description 20 40.00%
Bill no. 28 56.00%
Other bills that are not paid yet 19 38.00%
TDS/VAT Information 17 34.00%
Table 6: Information queried by suppliers and service providers
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56% of the queries done by suppliers and service providers were for bill no. 40% of the
queries were for cost description. 38% of the queries were for other bills that are not paid
yet and 34% of the queries were for TDS and VAT information. From the survey it
became clear that most of the queries of suppliers were for bill no. So the information
that was attached with the checks must be lacking information about bill no. The total
percentage of the information queried was more than 100%. This is because of many
suppliers and service providers queried multiple information.
Other bills
that are
Cost not paid TDS/VAT
description Bill no. yet information Total
Logistics 13.33% 26.67% 33.33% 26.67% 100.00%
TVC 0.00% 50.00% 50.00% 0.00% 100.00%
Projects 30.00% 0.00% 20.00% 50.00% 100.00%
Newspaper 0.00% 63.64% 27.27% 9.09% 100.00%
Restaurant 25.00% 50.00% 25.00% 0.00% 100.00%
Procurement 20.00% 20.00% 0.00% 60.00% 100.00%
Rent a Car 53.85% 15.38% 0.00% 30.77% 100.00%
Security 100.00% 0.00% 0.00% 0.00% 100.00%
Courier 27.27% 45.45% 27.27% 0.00% 100.00%
Table 7: Information queried by different types of suppliers and service providers
Figure 21: Information query by different types of suppliers and service providers
From the table it is seen that 33.33% of the logistical service providers queried about
other bills that were not paid yet then 26.67% of them also searched for bill no. and TDS
and VAT information. 50% each of the television companies searched for other bills and
bill no. 50% and 30% of the project related suppliers and service providers searched for
TDS and VAT information and cost description respectively. 63.64% of the newspaper
publishers searched for bill no. 45.45% of the courier companies searched for bill no.
53.85% of the rent a car service providers searched for cost description which includes
the car registration no. It is seen that most of the suppliers and service providers were
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seeking one or two particular information. So the GrameenPhone staffs must provide
them with that information in the checks which will be useful for them. This way the
suppliers and service providers queries can be met. This will minimize the suppliers and
service providers frequent meeting with the GrameenPhone staffs and thus reduce the
hassle for both parties.
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In the table it is seen that 28 minutes 29 seconds of suppliers and service providers times
were spent while querying about bill no. 23minutes 52 seconds was spent while querying
about other bills. Query about TDS and VAT information took least time and that was 12
minutes 03 seconds.
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8.10. Relationship of satisfaction level and error
Error identified
Extremely satisfied 2.50%
Moderately satisfied 17.50%
Neither satisfied nor dissatisfied 17.50%
Moderately dissatisfied 35.00%
Extremely dissatisfied 27.50%
Total 100.00%
Table 11: Relationship with satisfaction level and
error
From the survey it was seen that those suppliers and service providers who have
identified error on their checks 2.5% were extremely satisfied, 17.5% were moderately
satisfied and another 17.5% were neither satisfied nor dissatisfied. 35% of the suppliers
and service providers were moderately dissatisfied. 27.5% of the suppliers and service
providers were extremely dissatisfied.
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and service providers. Around 51% of the suppliers and service providers thought that
TDS/VAT calculation had normal priority. To around 47% of the suppliers and service
providers bill no. was unnecessary factor.
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Figure 25: Grading of information according to high priority
From the survey it was found that 60% of the logistics service providers said that bill no.
is the information that had high priority to them. 75% of the TV companies said that bill
no. is very important to them. 77.78% of the project related suppliers and service
providers said that
payment details are very important to them. 70% of the security service providers
emphasized on payment details. Previously the information written in all checks only
contained payment details. As a result the suppliers and service providers had to come to
the GrameenPhone staffs for additional information.
Frequency Percentage
Yes 26 28.26%
No 66 71.74%
Total 92 100.00%
Table 14: Personal relationship with the
From the study it employees of GP was seen that
around 28% of the suppliers and service providers had personal relationship with
employees of GrameenPhone Ltd.
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Figure 26: Personal relationship with the employees of GP
8.14. Personal relationships help in quick transaction
Frequency Percentage
Yes 36 39.13%
No 56 60.87%
Total 92 100.00%
Table 15: Personal relationship helps in quick payment
From the table it is seen that 39.13% of the suppliers and service providers thought that
personal relationship help in quick transaction. 60.87% of the suppliers and service
providers thought that personal relationship do not help in quick transction.
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Chapter: 09
Observations, Respondents
suggestions & findings
9.1. Observations
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Some of the observations regarding the payment procedure and attitude of
GrameenPhone staffs, suppliers and service providers are as follows:
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A large number of suppliers and service providers have made suggestions about how to
improve the payment procedure in GrameenPhone. Some of the suggestions are randomly
selected and listed, as under, to help make the payment procedure more comfortable.
1. Suppliers and service providers must be notified through e-mail and phone when
checks come from the bank.
2. Suppliers and service providers must have easy access to GrameenPhones staffs
of treasury and user department.
3. Suppliers and service providers should be notified immediately why their
payment is on hold.
4. Their queries about bill no., amount, check no., TDS/VAT information and bill
description should be answered as soon as possible.
5. GrameenPhone should develop a system where checks can be directly sent to
beneficiaries.
6. Check distribution time (10:00 AM to 4:00 PM) should be made more flexible
before festivals like Eid, Christmas etc.
This research tried to find out the authentic information about the quality of payment
procedure of GrameenPhone Ltd. This research may also identify the faults in the
payment procedure. It is desired that this research may influence the tactics to make the
payment procedure more efficient and less time consuming. The major implications of
the findings are given below:
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service providers always come to staffs to make query about payment information.
Their continuous querying hampers the regular work of the GrameenPhone staffs. It is
seen that only payment details is not enough for suppliers and service providers. They
also demand some additional information which varies from suppliers to suppliers. So
which supplier and service provider need which information should be identified and
provided accordingly with the checks.
2. It is seen that the average check collection time is very much high. Suppliers and
service providers come to every months 5th, 12th, 19th and 26th day to collect the
checks. But they have to wait for long time as the checks arrive late from the banks.
So banks systems should be more developed and GrameenPhone should make a close
contact with the banks so that the check arrival time can be minimized to the shortest
time possible.
3. Some of the suppliers and service providers do have personal relationship with the
suppliers and service providers. But most of them think that it do not help them in
quick payment. GrameenPhone employees may keep personal relationship as long as
it do not harm in any way to the payment procedure.
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Chapter: 10
10.1. Conclusion
GrameenPhones suppliers and service providers are an integral part of the road to its
success. GrameenPhone can not deny the role that they play for it. Moreover 70,000
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people directly or indirectly depend on GrameenPhone for their livelihood working as
vendors, contractors, suppliers and others. Every week GrameenPhone pay more than 50
million taka to more than 200 suppliers and service providers. So there is no room for
delay or error.
Every month the number of local suppliers and service providers are increasing in a rapid
rate. Delay and inaccurate payment to suppliers are always discouraging to them for
continuing business with GrameenPhone. Moreover it increases the chance of suppliers
claiming penalty and compensation. It also hurts the goodwill of the company. In an
industry where so fierce fighting for market share is going on, nobody can afford to do
so.
GrameenPhone had a good reputation of making quick payments to its suppliers and
service providers. Therefore regular research should be performed to check if the
payment system is lacking anything or not. The payment procedure should be kept ready
enough to run the operation flawlessly. This research was intended to do that.
It is always welcomed that this research should help others to be inspired and do more
related research to find out most efficient and accurate payment procedure for
GrameenPhone.
10.2. Recommendation
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2. A close link with the suppliers and service providers should be maintained to let them
know the reason behind holding any payment for long time
3. Suppliers come to collect their checks on 5th, 12th, 19th and 26th day of the month.
There should be a system by which suppliers and service providers can be notified
after their checks have been issued from banks. Also the banks systems and
procedures should be upgraded so that the checks can reach in time. GrameenPhone
may consider sending the checks directly to the suppliers rather suppliers come and
collect the checks.
4. A system is needed to be developed where the information that suppliers and service
providers may reach to them via e-mail. This will save a huge amount of their own
and GP staffs time. It should be remembered that GP staffs spend huge amount of
time providing necessary information about payment to suppliers and service
providers.
5. The information that GrameenPhone staffs provide to the suppliers are not always
important. Instead of payment details; bill no. and TDS/VAT information can be more
important to them.
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ANNEXURE
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ERP : Enterprise Resource Planning
DFF : Data Flexi Field
BTS : Base Trans Services
GF : Green Field
RT : Roof Top
PO : Procurement
Non PO: Non Procurement
FC : Finance Control
FT : Foreign Treasury
LT : Local Treasury
GPC : Grameen Phone Center
GPDC : Grameen Phone Distribution Center
RMS : Regular Maintenance Services
EMS : Emergency Spares
BR : Bangladesh Railway
DD : Demand Draft
REB : Rural Electricity Board
PDB : Power Distribution Board
OPEX : Operating Expenditure
CAPEX: Capital Expenditure
DESA : Dhaka Electric Supply Authority
DESCO: Dhaka Electric Supply Company
DPDC : Dhaka Power Distribution Company
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