1. Introducing the Company
1.1
The Company
Pacific
Bangladesh Telecom Limited (PBTL) is the first mobile phone service provider in
the Indian subcontinent. The address of the Head office is: “Pacific Centre”
14, Mohakhali C/A Dhaka 1212. PBTL was founded by Pacific Group Limited and
Hutchison Whampoa Limited. CityCell
is the brand name under which Pacific Bangladesh Telecom provides wireless
telecom or mobile phone service and products to the general and other
customers.
1.2 Pacific Group Ltd.
The
Pacific Group is a group of companies under common ownership. The group has
interests in automobile service (Pacific Motors Ltd.), consumer electronics
(Pacific Industries Ltd.), fisheries (Bengal Fisheries Ltd.), tea (Noyapara Tea
Company Ltd.) and telecommunications (Pacific Bangladesh Telecom Ltd.). This
group of industries was founded by renowned industrialist and current honorable
foreign minister – Mr. M. Morshed Khan.
1.3 Hutchison Whampoa Ltd.
Hutchison
Whampoa Limited (HWL) is a Hong Kong-based diversified, multinational company
with its origins dating back to the 1800s. As part of the Li Ka-Shing group of
companies, HWL's ultimate shareholder is Cheung Kong (Holdings) Limited, which
has a 49.9 % interest in the Company. In terms of market capitalization, HWL is
one of the largest companies listed on the Hong Kong
stock exchange. With over 150,000 employees worldwide, the Group operates five
core businesses in 41 countries.
1.4 The Company History
In October 1990, Hutchison Bangladesh Telecom
Limited (HBTL) was formed as a joint venture between Bangladesh Telecom Limited
(BTL) and Hutchison Whampoa Limited of Hong Kong .
In March of that year BTL had been issued a license by Bangladesh Telegraph and
Telephone Board (BTTB) for operating cellular, paging and other wireless
communication networks.
However, soon there was legal dispute between
BTTB and BTL regarding the refusal of BTTB to provide Public Switch
Telecommunication Network (PSTN) channels for connectivity to the BTTB network.
The Supreme Court then ruled in April 1993 that BTTB would have to provide PSTN
connections to HBTL, and that BTL would have to transfer the cellular portion
to the license of HBTL. BTTB gave HBTL the PSTN connections in August 1993 and
HBTL began commercial operation of the first cellular telephone service in Bangladesh Hong Kong based financial investors Far East Telecom
Limited bought the Type B shares.
On 12th February 1996 , HBTL was renamed Pacific Bangladesh
Telecom Limited. PBTL uses the brand name CityCell to market its cellular
products. In order to boost the financial and also the managerial strength of
PBTL, the shareholders of PBTL has completed the transaction under the
agreements in which Fujitsu Limited, Japan and Asian Infrastructure Development
Company (AIDEC), established in Cayman Islands, would acquire 10% and 20%
equity shares in PBTL, respectively on June 2000.
With
this acquisition of 10% shares in PBTL by Fujitsu Limited, a Global Fortune 500
company, they have further strengthened their presence in Bangladesh Bangladesh Bangladesh
1.5 History in brief
Table 1: Chronology of
CityCell's Achievements
|
Date
|
Event
|
1989
|
Bangladesh
Telecom Limited (BTL) was awarded a license to operate cellular, paging, and
other wireless communication networks.
|
Apr-90
|
Hutchison
Bangladesh Telecom Limited (HBTL) was incorporated in
|
Aug-93
|
1st
cellular operation in the South Asian sub-continent
|
Aug-93
|
HBTL
began commercial operation in
|
Dec-93
|
Pacific
Motors Limited acquired the entire 50% share holding of HBTL.
|
Feb-96
|
HBTL
was renamed as Pacific Bangladesh Telecom Limited (PBTL) and launched the
brand name “CityCell Digital” to market its cellular products.
|
Mar-97
|
1st
to extend coverage to
|
Apr-97
|
CityCell
began commercial operation in
|
Mar-99
|
1st
to adopt CDMA technology. CDMA technology was first introduced by CityCell.
|
Jan-01
|
1st
to set-up a communications backbone to
|
Apr-01
|
Dhaka-Chittagong
microwave is launched.
|
Nov-01
|
CityCell
introduced the 15-second pulse rate in the cellular industry of
|
Jan-02
|
CityCell
commences operations in the Sylhet zone.
|
Jan-02
|
Value
Added Services (VAS), such as 24 hour billing information, news, services,
sports, etc., are introduced.
|
Mar-02
|
First
operator in
|
July-02
|
First
operator in
|
Sep-02
|
CityCell
extends coverage to Rangpur, Dinajpur, & Syedpur, the northern districts
of
|
Oct-02
|
Short
Message Service (SMS) is introduced.
|
Jan-03
|
CityCell
launched its services in the major northern business city of
|
Feb-03
|
First
operator in
|
Jun-03
|
CityCell
reaches a coverage level of 40 districts out of a total of 64 (61 districts
eligible).
|
Jun-03
|
Network
capacity is increased to 240,000.
|
Aug-03
|
CityCell
introduces “Amar Phone”, a postpaid mobile-to-mobile package offering the
lowest outgoing rate per minute in
|
Sep-03
|
First
operator in
|
Oct-03
|
CityCell
reaches a coverage level of 51 districts out of a total of 64 (61 districts
eligible).
|
Nov-03
|
CityCell’s
24-hour customer call center opens. Network capacity is increased to 280,000.
|
Mar-04
|
CityCell
opens its customer service centres 7 days a week countrywide.
|
June-04
|
CityCell
launches RIM based handsets.
|
Mar-05
|
CityCell
introduces, “Alaap Call me”, a pre-paid BTTB both-way connectivity package with
the unique “Call2Cash” feature to earn (talk-time) credits upon receiving
CityCell calls.
|
June-05
|
Singtel
acquires 45% equity stake of CityCell. Has a call option to acquire another
15% by 2007.
|
2. Mission
2.1 Mission
PBTL’s
mission statement is “To be the most successful cellular, paging
and other wireless service provider in Bangladesh
2.2 Vision
The
Vision of the company is “To to be the
leader in the Telecom industry in the region and provide a complete
communication solution to the customers with a smile.” There is an emphasis
on strong customer relations. This is important to CityCell especially as,
until recently, they positioned their packages as high end packages (corporate
and business users). Such customers will require strong support for brand
loyalty to develop.
2.3 Objectives
2.3.1 Qualitative
Objectives:
·
Increasing
service offerings.
·
Expanding
the network.
·
Creating
innovative, unique, and cost-effective various products to customers.
·
Increasing loyalty by focused customer retention program.
2.3.2 Quantifiable
objectives:
·
Increase
subscriber base to 1 million by Dec 31, 2005
·
99.5%
overall network availability by the end of 2005
·
Network
coverage in 61 districts (out of eligible 61) by the end of 2005
2.4 Strategies
2.4.1 Functional Level Strategy
·
PBTL’s focus is on efficiency, quality,
innovation, and customer responsiveness.
2.4.2 Business Level Strategy
·
PBTL applies cost leadership and differentiation
strategies as its business level strategies.
2.4.3 Corporate Level Strategy
·
PBTL follows related diversification as
their corporate level strategies.
3. Organizational Structure
PBTL
has a total of about 500 employees:
Fig 2: Organogram of Pacific Bangladesh Telecom
Limited
3.1 Sales & Marketing: As the name implies, this division’s
job is to conduct marketing promotion of CityCell. The job of its employees is
to maintain relationship distribution channel, media, and corporate clients.
This division also deals with value added services, brand and product design.
In the Sales Division there are
Channel Sales, Corporate Sales and Direct Sales. In the Marketing Division,
there are Market Communications, Brand, VAS, Product Development and FWT &
Backbone Departments. The Senior Vice President is the Chief Marketing Officer
of this Sales & Marketing Division. Details about the departments have been
discussed in the following chapter.
3.2 Customer Service Operation, Billing and IT: This department
deals with customer after the sale occurs. Main activities of this department
includes maintaining data base of the customers, preparing, distributing, and collecting
the bills, activating new connections, deactivating connections, helpline service,
interchanging of the CDMA sets, collecting the faulty and repairable sets,
returning repaired sets, changing CDMA sets and so on. This department is
divided into three divisions:
a) Billing and IT b) Service Delivery
3.3 Finance and Commercial: This department is divided into two
divisions, a) LC preparation and Purchase, and b) Fund Management. Here LC is
opened for purchasing of sets and equipment, and all the funds collected are
used and controlled for the maximum benefit of the company. This department is
also responsible for the budgeting which takes place once a year for the next
three years.
Fig 5: Finance and Commercial
3.4 Engineering: This department is responsible for
the setting up and maintenance of the heavy equipment and the major telecom
channels required for providing services to customers. This department is
divided into 7 divisions. They are Switch, Central Base station, Microwave,
Radio Frequency, Base Transceiver Station, Power, Planning and development.
Fig 6: Engineering
3.5 Accounts: This department is responsible for collecting direct
cash or check or charging credit cards from the customers who are paying for
the service and equipment. This
department is also responsible to maintain the balance of store where sets and
equipments are gathered for future purpose and present operation.
Fig 7: Accounts
3.6 Administration and Human Resource: As the name
implies, this department has three major divisions. The Administration division
is responsible for Contract, Legal and Protocol & Government affairs. The
Purchase & General Maintenances is responsible for Purchase & Support
and Estate & Properties, Maintenance & general security. The Human
Resource department is responsible for procuring future employees according.
This department is also responsible for maintaining the database of all
employees, leaves, attendance, health care and related fields of employees.
Fig 8: Administration and Human Resource
4. Functions of the Sales and
Marketing Division
The major marketing goal of
this division is to capture a significant market segment that will yield
maximum revenue by means of passing on directly or indirectly high end cellular
phone service. Many clients provide telecom services to their locality by
Tellular or Fixed Wireless package (FWT). The rates of this package may be low
but this is offset by the high frequency of usage and the strong support
claimed to be provided by CityCell.
Fig 9: Sales & Marketing Division
4.1 SVP
The office of the Senior Vice President
of Sales and Marketing Division is responsible for coordination of marketing
activities across the company and to provide top level management with an
overall picture of the market situation.
4.2 VP
The Vice-President of the division
oversees the product and business development scenario of the company. He is
responsible to the SVP of the division.
4.3 Product Development
This department is responsible for
find out the innovative features that can attract the existing and potential
customers. Product development is one of the key departments in the company.
While developing new packages and talk plans this department has to keep in
mind the profit and cost issue. Under all these constraints the department has
been producing exciting and new features which ultimately attract customers.
4.4 Value Added Service (VAS)
This is another department which also
deals with product development but this department is concerned only with the
Value Added Services that the company offers. Value added services are those
other than basic voice calls. CityCell’s VAS department is one of leading VAS
providers in the country in terms of the number of wide range services that it
is providing.
4.4.1 Short Messages Service (SMS)
4.4.2 Voice Mail Service
4.4.3 Call Conferencing
4.4.4 SMS Based Information Services
·
Fun
(Jokes, quotations, etc.)
·
Financial
Services
·
Emergency
Services
·
Sports
·
SMS Banking &
others
Table 2: All of the Voice Based Information Services at a
Glance
FoodFone
(location based)
|
*101
|
FireFone
(location based)
|
*911
|
PolicePhone
(location based)
|
*999
|
MediPhone
(location based)
|
*505
|
Automobile workshop
(location based)
|
*666
|
Flower shop (location
based)
|
*404
|
NTV
NewsPhone
|
*777
|
Channel I NewsPhone
|
*444
|
ATN Bangla NewsPhone
|
*333
|
WeatherPhone
|
*122
|
EventsPhone
|
*123
|
AirPhone
|
*124
|
RailPhone
|
*125
|
Exchange RatePhone
|
*126
|
HoroscopePhone
|
*127
|
PrayerPhone
|
*786
|
4.5 Brand
The brand department of the company
deals with image o the brand to the customers. It basically helps the brand to
portray its intentioned image to the potential target group. This department
along with the Marketing Communication department deals with the promotional
activities.
4.6 Corporate Sales
There is a separate office of
assistant vice-president for corporate sales who is also responsible for
corporate customer relations. Corporate customers are given high priority in
terms of sales and also in terms of after sales service. Of course this is due
to the high usage and need for good long term goodwill with such corporate clients.
This department however deals mainly with sales to corporate customers and
maintenance of relations with both current clients as well as scouting out
potential new corporate clients, whereas the after sales service and other
issues are dealt with by the customer services operations section of the
company.
4.7 Channel Sales
The assistant vice president
responsible for channel management has the very important job of setting up
marketing channels by which packages are distributed among clients and by which
feedback is obtained from customers. This department is responsible for the
selection of new dealers and motivating them and current dealers to promote
CityCell packages to their customers in their respective areas. This department
is also responsible for seeing that there is an excellent support network for
each dealer and that they are satisfied with their monetary or otherwise
remuneration.
This department is also responsible
for checking that each dealer does not cut into the sales of another dealer in
a very proximal region.
4.8 Marketing Communications
The chief responsibility of this
department is logically, promotion and communication of new products and
product ideas to customers both directly through selection of advertising
media, then dissemination of information by means of advertisements; and
indirectly through dealers by providing them with promotional material. This
department is also responsible for public relations which do not include
corporate relations. This is handled, as we have seen, by other departments.
The responsibility of this department is immensely important especially in the
introduction stage of a package for customers. They also provide help for other
departments such as the front office and services marketing in order to promote
CityCell packages to both current and new customers. This helps very much in
handling cases of dissatisfied customers and also in case of adjusting
customers with old packages who have to be convinced to upgrade their packages
to the new ones on offer.
The company sub-contracts its
promotional materials production to local companies. A regular number of events
are held to integrate promotional activities with public relation exercises to
enhance the image of CityCell and better promote the packages on offer.
4.9 Product & Tariff design
This sub-department is under the
Product Development department and is responsible for the design of packages
and the fixing of tariff rates which are actually the rates of usage for each
package. This department is also responsible for the coordination of market
research for the whole company. They will integrate knowledge gleaned from
extensive market research into the design of new packages that fulfills the
needs of customers. This is done very frequently as the needs of even the most
stable of customer segments change and the company has to change the tariff
structure of its offered packages accordingly.
4.10 FWT and Backbone
This particular department looks
after the Fixed Wireless Terminal clients and the packages. FWT has been one of
the most profitable sectors for the company. As a result this department has a
great significance to the company. PBTL has undertaken a commercial program to
expand its business activities to selling back-bone for data transfer to
corporate clients. This network stretches from Chittagong Dhaka . It has immense potential and may generate
significant revenues for the company.
The overall structure of the sales &
marketing department and its sections of CityCell has both advantages and
disadvantages in terms of organizational structural and respective
functionality.
5. Products and Service
offered by Pacific Bangladesh Telecom Limited
5.1 Post Paid
Packages
5.1.1 ‘CityCell 1000’ (Regular): Commercial/
Business/ Personal use by high income consumers. This product can reach the
Local T&T, NWD, IDD and all Mobile service
operators across the country. It is one of the old packages of CityCell. Still
this package is being provided to many high income group consumers. Both small
and large institutions and organizations subscribe the service as their needs.
CityCell 1000 (Normal Scenario):
Monthly Subscription charge Tk. 1000
|
|||
Outgoing Rate
|
Peak (
|
Off-Peak (
|
S-O-P (
|
To
|
3.00
|
3.00
|
1.50
|
To
|
8.00
|
8.00
|
8.00
|
To T&T
|
3.00 + BTTB
|
3.00 + BTTB
|
1.50 + BTTB
|
Incoming Rate
|
|||
From T&T
|
2.00/min
|
2.00/min
|
1.00/min
|
CityCell 1000 (Roaming Scenario):
Monthly Subscription charge Tk. 1000
|
|
Outgoing Rate
|
Flat Rate
|
To
|
3.00
|
To
|
8.00
|
To T&T
|
3.00+BTTB
|
Incoming Rate
|
|
From T&T
|
3.00
|
5.1.2 ‘CityCell 500’ (Regular): Commercial/
Business/ Personal use by high income consumers. This product can reach the
Local T&T, NWD, IDD and all Mobile service
across the country. This is one of the regular packages which have the most
number of subscribers. This package is known and admired to all. The
subscription fee and the tariff are affordable than the other mobile operators
are offering. These days not only high income group but also high medium and
medium income groups also use this service because of the lowest billing rate
offered by CityCell.
CityCell 500 (Normal Scenario):
Monthly Subscription charge Tk. 500
|
|||
Outgoing Rate
|
Peak (
|
Off-Peak (
|
SOP (
|
To
|
4.00
|
3.00
|
1.50
|
To T&T, NWD, IDD
|
4.00 + BTTB
|
3.00 + BTTB
|
1.50 + BTTB
|
Incoming Rate
|
|||
From T&T
|
3.00/min
|
2.00/min
|
1.00/min
|
CityCell 500 (Roaming Scenario):
Monthly Subscription charge Tk. 500
|
|||
Outgoing Rate
|
Peak (
|
Off-Peak (
|
SOP (
|
To
|
4.00
|
3.00
|
1.50
|
To T&T, NWD, IDD
|
4.00 + BTTB
|
3.00 + BTTB
|
1.50 + BTTB
|
Incoming Rate
|
|||
From T&T
|
3.00/min
|
2.00/min
|
1.00/min
|
5.1.3 ‘Mobile 250’ (Mobile
to Mobile with BTTB Incoming and Limited Outgoing): Personal use
by middle income consumers. Significant number of customers is having this
subscription. It is very popular among students and medium salaried servicemen
and a good number people from different occupation are using this line.
Mobile 250 (Normal Scenario):
Monthly Subscription charge with CLI Tk. 250
|
|||
Outgoing Rate
|
Peak
|
Off-Peak
|
SOP
|
To
|
4.00
|
3.00
|
1.50
|
To
|
6.00
|
5.00
|
5.00
|
To T&T
|
N/A
|
3.00 + BTTB
|
1.50 + BTTB
|
Incoming Rate
|
|||
From T&T
|
3.00/min
|
2.00/min
|
1.00/min
|
Mobile 250 (Roaming Scenario):
Monthly Subscription charge with CLI Tk. 250
|
||
Outgoing Rate
|
Peak
|
Off-Peak+SOP
|
To
|
4.00
|
3.00
|
To
|
6.00
|
5.00
|
To T&T
|
N/A
|
N/A
|
Incoming Rate
|
||
From T&T
|
6.00
|
4.00
|
·
Incoming
from any mobile is free.
·
1st
minute from BTTB is free for all post paid cellular packages.
5.1.4 ‘Amaar Phone’ (Mobile Mobile
Mobile to Mobile (Nation Wide Roaming Scenario):
Monthly Subscription with CLI Tk. 200 Nation Wide Roaming
|
||
Outgoing
|
Peak (
|
Off-Peak (
|
To
|
5.00
|
4.00
|
Pulse
|
15 sec. applicable from 2nd minute
|
|
5.1.5 ‘Tellular’ (Fixed Wireless Telephone): Commercial/Business
use by commercial institutions and business organizations. This package has
been mostly used in village area, but recently we have seen that in city area
many people using this service for mobile to mobile business because of low
rate. High frequency antenna help the FWT sets to reach signals beyond the
service area.
Tellular (Fixed Wireless Telephone):
Monthly Subscription
Fee Tk. 250
|
|
Outgoing Rate Per Minute
|
|
To
|
2.50
|
To
|
5.00
|
To T&T, NWD, IDD
|
2.50 + BTTB
|
Incoming
|
|
From T&T, NWD, IDD
|
1.50/min
|
From Any
|
Free!
|
Package
|
Target market segment
|
Aamar Phone
|
Personal use by mainly medium income
consumers
|
Shabar Phone
|
Personal use by middle income
consumers
|
CityCell 500
|
Commercial/business/personal use by
middle/high income consumers
|
CityCell Premium
|
Commercial/business/personal use by
high income consumers
|
FWT (Tellular) packages
|
Commercial/business use by
commercial institutions and business organizations
|
Table 3: Current Post-paid packages:
features and target segment
5.2 Pre Paid Packages
The new-generation subscribers are very interested with this service.
It is also helpful for limited income group of people. ‘Aalap’ pre-paid card is
available everywhere and this service provides flat rate and nation wide
roaming. A very significant edge that CityCell pre-paid packages have over
other pre-paid packages from other companies is the package that features T
& T incoming and outgoing. Other
benefits for the subscriber:
- SMS
facility and other value added services
- Scratch
card in a variety of denominations (e.g. Tk. 300, Tk. 400 and Tk. 550)
- Know
the balance by dialing *811
5.2.1 ‘Aalap 24’ (Mobile to Mobile with T & T Facilities):
Aalap 24 is
mobile-to-mobile as well as mobile-to-BTTB package. This plan gives subscribers
–
- Access
to any mobile in
- 24-hour
BTTB connectivity
- 24-hour
NWD and ISD facility
- Very
attractive and simple tariff plan
- Freedom to
choose 3 CityCell numbers and make calls at 50% reduced tariff under
One2One scheme.
Aalap 24 (Also known as Aalap A)
|
||||||||||||||||||||
|
||||||||||||||||||||
5.2.2 ‘Aalap B’ (Mobile to Mobile): In this option customer will have only mobile to mobile
facility. This option is offering pre-paid mobile in a low rate. This plan
gives the subscriber –
- Access to any
mobile in
- Lower tariff
especially at peak period
- Freedom to
choose 1 CityCell number and make calls at 50% reduced tariff under
One2One scheme.
Aalap B
|
||||||||||||||||||||||||||||||
Notes:
* 20 second pulse after first minute
* For One2One calls to 1 CityCell number, talk for 50% of the above tariffs * VAT applicable |
||||||||||||||||||||||||||||||
Aalap Call Me is a full BTTB connectivity package with the unique
and innovative call2cash feature. This plan gives the subscriber –
- Access to any mobile in
- 24-hour BTTB
local/NWD/ISD connectivity
- Under the
call2cash feature Aalap Call Me subscrivers will get Tk. 0.25 added to
their account every minute when they receive calls from other CityCell
phones
- Freedom to
choose up to 3 CityCells number and make calls at 50% reduced tariff under
One2One scheme
- CityCell to
CityCell SMS at a reduced rate of Tk. 1.50
Aalap Call Me
|
||||||||||||||||||||||||||
Notes:
1 For every 30
second pulse from the first 30 second
2 BTTB charges applicable * For One2One calls to up to 3 CityCell numbers, talk for as low as Tk. 1.25/pulse * VAT applicable * CityCell to CityCell SMS @ Tk. 1.50 |
||||||||||||||||||||||||||
6. Technology Comparison:
AMPS, CDMA and GSM
6.1 AMPS: The most commonly used cellular system in North America , the Advanced Mobile Phone System (AMPS)
had also gained widespread acceptance in Asia
(specially in Korea Hong Kong , Japan Singapore
6.2 Code Division Multiple Access (CDMA): Code Division
Multiple Access is a system in which a subscriber uses the entire frequency for
the entire period that his phone is active.
Installing of segregating users by frequency (FDMA) or time (TDMA) this
technology segregates customers by coding the signals in such a manner that
each customer decrypts only one signal at any one signal at any given time. This would be similar to allowing a
large number of people into the hall room, but requiring each pair to converse
in a different language. Thus while everyone would hear everyone else, this
would just be more of background noise rather than interference. On the other
hand, each person would be able to understand this partner, because they would
be speaking the same language. One
of major differences between CDMA and the other existing technologies is in
terms of frequency reuse. Using CDMA an operator would use the entire allocated
frequency in every cell. The reuse
pattern, therefore, is in effect a ‘one cell reuse pattern’. Therefore, the operator can serve may more
customers per unit of allocated bandwidth compared to either AMPS of GSM. In
general, CDMA capacity is rated to be 10 to 20 times higher then analogue
techniques such as AMPS, and 3 to 5
times higher than other digital cellular technologies such as GSM.
6.3 GSM: GSM stands for "Global System for Mobile
Communications." It is mostly a European system and is largely unused in
the US Europe
and Asia . GSM is interesting in that it uses a
modified and far more efficient version of TDMA. GSM keeps the idea of
timeslots and frequency channels, but corrects several major shortcomings.
Since the GSM timeslots are smaller than TDMA, they hold less data but allow
for data rates starting at 300 bits per second. Thus, a call can use as many
timeslots as necessary up to a limit of 13 kilobits per second. When a call is
inactive (silence) or may be compressed more, fewer timeslots are used. To
facilitate filling in gaps left by unused timeslots, calls do "frequency
hopping" in GSM. This means that calls will jump between channels and
timeslots to maximize the system’s usage. To compare with the other systems, it
should be noted that GSM requires 1 Watt of output power from the phone.
6.4 Advantages of CDMA: There are numerous advantages of using CDMA technology, the
most important of which are:
(a) Higher Capacity: Since CDMA makes more efficient use of
the available spectrum, it can provide greatly increased capacity. CDMA
capacity is rated to be 10 to 20 times higher than other analogue techniques
such AMOPS, and 3 to 5 time higher that other digital cellular techniques such
as GSM. With higher capacity, CDMA accommodates higher demands and supports new
digital services such as data transmission and mobile fixing.
(b) Simplified Planning: CDMA allows system planning to become much easier
through the use of the same frequency in every sector of every cell. As the
entire frequency is used in each cell, operators do not have to retune base
stations, thus capacity expansion is quicker and simpler.
(c) Better Voice and Call Quality: The unique encoding scheme used foe
each different CDMA conversation virtually eliminates cross-talk and
dramatically reduces the impact of interference from other sources. Also, The
larger bandwidth of CDMA signals (the signals use the entire frequency versus
only a portion for competing technologies) means that they are less prone to
fading compared to the narrower bandwidths of AMPS and GSM.
(d) Enhanced Security and Privacy: Since the signals are coded, it is
very difficult to intercept and decode a CDMA signal. This prevents eavesdropping
and prohibits cloning and other types of fraud. Also, due to the wider
bandwidth, such phones are difficult to jam.
6.5 CDMA vs. GSM: A Technical Comparison
6.5.1 Advantages
of CDMA:
·
Increased
cellular communications security
·
Simultaneous
conversations, less call drops, stronger network
·
Increased
efficiency, meaning that the carrier can serve more subscribers
·
Low
power requirements and little cell-to-cell coordination needed by operators
·
Extended
reach – beneficial to rural users situated far from cells
·
Smaller
phone sets
6.5.2 Disadvantages
of CDMA:
·
Due
to its proprietary nature, all of CDMA's flaws are not known to the engineering
community for solving
·
CDMA
is relatively new, and the network is not as mature as GSM
·
CDMA
cannot offer international roaming, a large GSM advantage
6.5.3 Advantages
of GSM:
·
GSM
is already used worldwide with over 500 million subscribers
·
International
Roaming permits subscribers to use one phone throughout Western Europe CDMA
will work in Asia , but not popular European
destinations
·
GSM
is mature, having started in the mid-80s. This maturity means a more stable
network with robust features. CDMA is still building its network
·
The
availability of Subscriber Identity Modules, which are smart cards that provide
secure data encryption give GSM e-commerce advantages
6.5.4 Disadvantages
of GSM:
·
Lower
voice clarity
·
Less
security for subscribers
·
Frequent
call drops
·
Higher
number of carriers/base stations required
1. Introduction to the Project
The topic of my internship project is
“The prospect of discount services and
loyalty program under the customer retention scheme of CityCell”.
I have worked under the Value Added
Service (VAS) division of the Sales & Marketing Department for past three
months.
During this period I had been
assigned to create as many valued business partners as possible for the
discount services to be offered to a certain section of the subscribers in
order to retain customers of the telecom operator. My other responsibilities
included maintaining various documents including Memorandum of Understanding
(MoU) papers, creating amendments if and when necessary, regular update of
relevant data and synchronizing information within CityCell and its new
partners.
2. Significance of the Study
Though PBTL was the company which
first brought cellular service in this subcontinent, it could not be the market
leader in the telecom industry, as of now. The growth rate of the company is
slow. The subscriber base might suggest the company is already in the 4th
position among the 4 active mobile competitors. From my point of view, it is
the technology which is not popular in this part of the world. CDMA technology is
the latest technology for mobile communication but maybe too advanced for this
market. But apart from the technology if an operator provides quality service (network,
customer care, VAS), offers some attractive packages, and takes initiatives for the subscribers, it is
possible to be the market leader.
This is where the other mobile operators
have started to work effectively in a greater extent. After the entry of banglalink (Orascom Bangladesh Telecom
Ltd.), the telecom market has become volatile with existing subscribers are
migrating vigorously at the reduction of call rates and introduction of
attractive packages. Some operators have been seeing their subscriber base
increase exponentially while others are wistfully watching theirs decrease. In
view of these, CityCell has decided to launch a customer retention plan for its
loyal and dedicated subscriber base.
Therefore I have found it challenging
to be involved in a work from which the company can benefit. Through my survey
I have tried to find about the discount service acceptability among
respondents, the customer switching pattern and the
satisfaction/dissatisfaction criterions among the existing CityCell
subscribers. I have also worked on possible avenues on which CityCell can work
further to offer attractive benefits to its loyal subscribers. Through my
findings and analyses I believe it would be easier for the company to take
decisions about the areas they have to reshape or develop regarding their
customer retention plan.
3. Objectives
3.1 Broad Objective
To have an in-depth analysis into the
prospect of the Customer Retention Scheme of CityCell
3.2 Specific Objectives
- To
conduct a competitor and industry analysis of the telecom market and present
its potentials
- To
assess PBTL’s current state of operation and future direction
- To
carry out a SWOT analysis of CityCell
- To
find out the satisfaction level of the subscribers
- To trace
the specific areas where the subscribers are dissatisfied
- To identify
the customer switching pattern and ways to retain them
- To
evaluate the loyalty program offered by the operator under its customer retention
scheme
- To
look into the discrepancies of the discount service to be launched for its
loyal and high-end users
4. Hypothesis
My hypothesis is, “Although PBTL
brought ‘CityCell’ as the first mobile telecommunication service in the
subcontinent, its customers are not fully satisfied with the service. If PBTL
does not take care of these dissatisfactions, it will be difficult for PBTL to retain
its subscribers, thus maintain its position and increase its market share.”
5. Methodology
The topic of my project is ‘The
prospect of discount services and loyalty program under the customer retention
scheme of CityCell’.
5.1 Data Collection Method: In my study I have mainly depended
on primary data, which have been collected through direct and phone survey.
5.2 Questionnaire pattern: I have developed my questionnaire (enclosed in the
Appendix) mainly focusing on the discount service acceptability among
respondents, the customer switching pattern and the
satisfaction/dissatisfaction criterions among the existing CityCell
subscribers. I have also worked on possible avenues on which CityCell can work
further to offer attractive benefits to its loyal subscribers. It is a mixed
open & close-ended questionnaire that consists of 17-odd questions.
5.3 Population: Since I was trying to assess the satisfaction level of
various factors of the company, rate of acceptability of various possible
benefits and the discount service options, I have surveyed the CityCell
subscribers only.
5.4 Sample Size: The sample size has been 80.
5.5 Sampling Method: Data collection has been done based on
convenient random sampling through means of telephone and in the premises of
CityCell dealer outlets where customers visit to buy new sets and connections.
5.6 Secondary Research: I have also collected data and
necessary information from the VAS (Value Added Service) & the Customer
Care department.
5.7 Findings &
Analysis: The results of the survey have been
represented through bar and pie charts. My research findings came out through
analyzing those data.
6. Limitations of the Study
Some limiting factors were faced
while conducting the research and preparing the report. These factors are as
follows:
- No
prior research has been done on this particular issue. The loyalty project
is an experiment to retain customers which is in its initial phase; the
privilege service for high-end users has not yet been launched. So the
information presented and data collected is very raw.
- The
findings and analysis are based on the results conducted from 80
respondents only. Due to the data collection method (random sampling) and
non-availability of loyal/high-end subscribers, their opinions have not
been reflected in the survey. Therefore it is not a perfectly
representative sample.
- The sample
that used to conduct the survey is mostly from
- Moreover,
it has not been possible to get all required internal information of the
company as these are treated as confidential company information.
7. Industry Analysis by means
of the 5-forces model
Integrating the various five forces,
we get:
7.1 Bargaining power of Suppliers:
Bargaining power of suppliers is high
because:
1. Suppliers provide CDMA sets that
cannot be found easily from many suppliers
2. Suppliers do not depend solely on
CityCell for significant portion of sales
3. Products are not differentiated.
However this has little effect on over-all supplier power
4. PBTL cannot vertically integrate
backwards as it does not have the capability to produce hardware whereas the
primary suppliers may buy a majority stake in PBTL
7.2 Bargaining power of Buyers:
Bargaining power of buyers is
comparatively low under certain conditions:
1. Tellular customers have significantly
low bargaining power because of the high cost of procurement of a Tellular set.
They have to rely on PBTL for spare parts and other help.
2.
Users
of low cost packages may switch from CityCell to other packages but only at a
certain cost: that of cost of purchase. In many cases it is seen that such
customers run up bills equivalent to or above their credit limit then abandon
their CityCell number. In such cases the buyer’s bargaining power is higher.
3.
In
cases of packages like CityCell 500/1000 buyers have significantly less
purchasing power because of the high deposits paid to PBTL (Tk 2,500 for local
T&T connections, additional Tk 2,500 for NWD and Tk 10,000 for ISD
connections). This significant amount of investment means that customers cannot
shift easily from one company to another.
7.3 Potential
competitors:
Let us
look at the potential competitor’s scenario from the barriers to entry
perspective:
- Brand loyalty: Due to decreasing performance
and slow progress in expansion of network, CityCell packages inspire less
brand loyalty than before. However potential new entrants to the industry
will be deterred by the high brand loyalty to Grameen packages.
Essentially it is believed that the total potential market has been
fulfilled by as much as three fourths. Thus leaving a very small segment
of customers for new entrants to gain. High brand loyalty to Grameen and
the die-hard users of the other three companies: Orascom, CityCell &
Aktel ensures that potential entrants will be strongly discouraged by the high
brand loyalty in current markets.
- Absolute cost advantages & economies of
scale:
Current players have a more or less absolute cost advantage because they
have already invested in telecom infrastructure and have recouped their
investments. New companies will have to invest in equipment and will take
considerably greater time to cover initial equipment-purchase expenses.
Considering the size of the four companies already operating and the size
of their investments, they will not take kindly to an upstart in the
industry and may use as many competitive options as possible – price
strategy, quality – to retain an upper hand.
- Distribution channel: Another major barrier to entry
is the access to distribution channels. With four companies competing in
the current market environment, the distributors of mobile phones are
becoming very limited. Moreover, many retailers will not want to carry
more lines of mobile phone packages as they have to sell the ones they
already have. Thus any increase in the number of companies will
cannibalize into current sales.
- Governmental regulations: In
7.4 Threat of
substitute products: For CityCell the threat of substitute products is very real.
Many customers prefer to use Grameen Phone above that of CityCell primarily for
the network reach. There are also a number of other factors that make CityCell
vulnerable to this aspect of the five forces method of analysis.
However we should note that in case
of packages are used for commercial use, CityCell has a significant hold over
customers. In case of Tellular packages, the rates being so low, many clients
prefer to stick with their CityCell Tellular sets even after experiencing
technical and network problems. Moreover as the initial purchase of a CityCell
Tellular set constitutes a significant investment – around Tk 50,000 all
inclusive – an owner of a Tellular set cannot easily substitute his or her
product.
7.5 Threat of New Entrants: The entry barriers to this
industry are very high as the government
controls the licensing arrangements, and also the existing operators has made
sufficient inroads into the market. This will strongly discourage new entrants
into the market although the government has decided to give a few new licenses.
8. Competitor Analysis
The mobile telecommunications
industry in Bangladesh
As operators of mobile cellular
services, Aktel, Grameen Phone and Banglalink are direct competitors of CityCell.
The PBTL license was issued in 1989. The three other license were awarded
during November 1996, and are identical to each other, however the licenses
awarded to Aktel, Grameen and Sheba (now
Banglalink) for their mobile cellular networks differ in some aspects from the
license that PBTL holds.
The most significant differences are:
Grameen/Banglalink/AKTEL
|
PBTL
(CityCell)
|
Cellular mobile or fixed communications
|
|
Must be digital technology.
|
Can be digital or analogue technology.
|
License Duration
|
|
Licenses valid for 15 years thereafter renewable annually
based on performance.
|
License valid for 20 years.
|
Frequency
|
|
Assigned 10 MHz.
|
Assigned a total of 40 MHz.
|
Operator fee obligations
|
|
Operator pays 15% of line rental revenues to Ministry of
Post & Telecommunications and call charges at actual to BTTB.
Additionally, operators pay Tk 10 million annually as license fees.
|
PBTL has to pay 10% of line rental revenues and call
charges at accruals to BTTB. No
license fees are payable.
|
Coverage of cell sites
|
|
Coverage of each cell may not be greater than 7 km in urban
and 17.5 km in rural areas.
|
Coverage is not restricted.
|
Rollout Obligation
|
|
Operators must performance obligations or pay fines.
|
No such obligations.
|
8.1 Grameen Phone Limited:
Grameen Phone Ltd. (GP) is the
current market leader in terms of market share, which is owned by a consortium
of investors comprising of Grameen Telecom and Telenor (Norwegian state owned
telecommunication company, owning nearly 65% of total shares). GP is using the
GSM technology to provide mobile cellular services to about 3.4 million
subscribers in Bangladesh March 26, 1997 .
Grameen Phone’s basic strategy is
coverage of both urban and rural areas. In contrast to the “island” strategy
followed by some companies, which involves connecting isolated islands of urban
coverage through transmission links, the company has been building continuous
coverage, cell after cell. So far, GP has installed more than 2000 BTS’s around
the country for cell to cell coverage. Grameen Phone has the widest coverage in
Bangladesh
8.2 AKTel (TMIB):
Telecom Malaysia International (Bangladesh Malaysia Malaysia
Aktel has been distinctly ahead in
offering the “30 Seconds Pulse” from the first minute of talk time. Today, The
company boasts the widest International Roaming service in the market
connecting 315 operators across 170 countries. In addition, Aktel is the first
mobile operator to connect Tetulia and Teknaf, the northern and southern most
points of Bangladesh Bangladesh Bangladesh
8.3 Banglalink (Orascom Telecom):
Orascom Telecom Bangladesh the 10th of February 2005 . This company
is the last addition to the GSM family of the local market when on October 20th, 2004 ,
Orascom Telecom announced the purchase of Sheba Telecom with a cost of US$ 60 million.
The company’s re- branding has been under the name of Banglalink with the
leveraging promise to provide the market with quality service at the most
affordable prices fitting to their communications needs.
It is also worth mentioning that an
unprecedented success of sales results followed the commercial launch of
Banglalink in early this year. Orascom is currently serving around 400,000
subscribers.
8.4 Tele-talk
(BTTB):
State-run Bangladesh Telegraph and
Telephone Board (BTTB) operates basic telecom services, national transmission
network and overseas communication. It has a monopoly over interconnections and
the international gateway, in which all other telecommunications operators
depend on to connect to the fixed telephone lines and international calls. All
phone operators are also subjected to a monopolistic control by BTTB that
limits revenue sharing arrangements. Just two and a half months back, BTTB had launched their
much-awaited mobile phone, Tele-talk which has generated hype among the
potential subscribers. As of now, Tele-talk has a small customer base of 40,000
with only T&T connectivity. But the major feature of this package is absolutely
free incoming from BTTB which has
strongly swayed the market in favor of the new packa
Revenue
Sharing refers to sharing of revenue
collected by one company for a service co-produced by two.
9. Company and Industry
life-cycle stage
Although revenues appear to be
steady, PBTL is losing customers steadily (declining market share) and, thus is
predicted that within the next few months, revenues will also start to decline.
This has happened in an industry which may be relatively low-growth currently
but in which many believe that should prices of usage be decreased slightly and
the telecom sector further liberalized, it could grow significantly further.
Thus we may state the company to be
having ‘question mark’ or ‘problem child’ status within the BCG matrix.
If we consider the situation in terms
of the life cycle scenario, we are forced to say that, under current
conditions, CityCell of PBTL is under the decline stage.
On the other hand, the industry life-cycle stage may
be defined as a shake-out stage. The rate of growth has slowed as demand has
approached saturation level under current conditions. Much of the demand for
sets and packages are limited to replacement demand – both in terms of packages
and also in terms of sets. This explains why PBTL is losing such a major
portion of its customers many of them are leaving for more versatile and cheaper
packages from other companies
10. The Telecom Market
Potential
- Fixed
Wired lines less viable option, wireless to drive growth
- Potential
demand of cellular is estimated to be 10%-14% of population
- Potential
demand ranges from 14-20 M (Dec
2004)
- Current
subscriber number is approx 4 M
- Untapped
market is 10-16 M subscribers now
11. SWOT Analysis of CityCell
SWOT Analysis is a very important
tool for a company for a company to analyze its internal external environment.
Now, we will see a SWOT analysis of CityCell.
11.1 Strengths:
1.
Competitive tariff
structure: Price is a big competitive advantage for CityCell.
CityCell is the only organization which is selling CDMA mobile phones with both
way T&T facilities at the lowest rate. For example, the lowest package rate
of CityCell is Tk 4,999/= with T&T incoming and outgoing facilities (‘Alaap
Call Me’, pre-paid). With T&T
facilities the other competitors are no where near CityCell. This package has a
fantastic and a very innovative feature, Call2Cash, in which any subscriber of
this package can ‘earn’ or collect 0.25 takas per minute in his/her pre-paid
account upon receiving a call from any CityCell mobile.
2.
No ‘Busy Network’: Because of enormous number of
channels, excess to CityCell mobile phones is very easy. The rate of call drops
is very low. It possesses high quality voice and data transmissions.
3.
Advanced technology: CDMA
technology is the best technology for telecommunication. World class mobile
operators and world class mobile phone manufacturers are advancing to this new
technology. CityCell is one of the few mobile service providers which are using
CDMA technology. Where as other GSM mobile service provider has to make huge
invest or will need time for transformation. Current CDMA 1X platform paves the
way for easier migration to 3G technology
4.
Low Cost: CityCell
follows low cost strategies that enables greater profit margin for shareholders.
It tries to cut cost in every possible way to maximize the strengths for future
battle.
5.
Dedicated &
professional management team:
Dedicated
core staffs who are willing to provide significant labor hours to accomplish
targets.
11.2 Weakness:
1.
Fewer staff: The number of
staffs working for CityCell is not enough at all. Far fewer staff than actually
required in terms of tasks to be completed.
2.
New technology: CDMA is the
latest technology but it is not widely used. A still more popular option is
GSM. It is more difficult for CityCell to provide international roaming because
of few number of CDMA operators around the globe.
3.
Low network coverage: Though CityCell started to provide
mobile telecommunication ten years back, it is still in behind the other
operators from the point of nationwide coverage. Grameen phone was able to use
the optical fiber network of Bangladesh Railway through strong lobbying with
the past government for the next twenty five years. That’s why Grameen Phone’s
expansion has been huge, whereas CityCell has covered roughly 58 districts all over
the country with a poor infrastructure.
4.
Lack of education: The
subscribers are not educated enough to handle sophisticated CDMA mobile
handsets effectively. That’s why proper knowledge is essential to handle these
mobile sets.
11.3 Opportunities:
- Advanced technology: Since CDMA technology is the latest in the wireless
telecommunication industry, it is yet to find new potential in the short
future.
- Secured data
transfer:
Secured
data transfer means CityCell has the potential to be the leading player
once e-commerce takes off.
- Overseas expansion
plan: The
growing need for across border telecom services at lesser cost (e.g. with
neighboring
- Acquisition of
Singtel: The acquisition of 45% equity
stake of CityCell brings more opportunity for CityCell. The company now
has greater capital and more budget to invest on its network facilities.
In fact, of the $118 million investment of Singtel in PBTL, $90 million
would be spent in network expansion plans
- Leadership in
telecommunication services:
11.4
Threats:
1.
Technology factor: There is a high degree of acceptance
of GSM technology over CDMA in local market.
2.
Legal problems: Tough legislation against easy
expansion into regional and international markets bypassing the state owned
BTTB.
3.
Newly imposed tax: In the fiscal
budget proposed last week, the government has imposed a Tk. 1200 tax on each
and every SIM/RUIM card which would hurt the regional expansion plans, increase
of customer base in the lower segment and the profit motive for every operator
including CityCell.
4.
New competitors: If new,
international competitors like ‘Airtel’ of India
5.
Global companies: In India United States Eastern Asia ‘Vodaphone’ of the United Kingdom Bangladesh
6.
BTTB mobile phone: BTTB has
already entered the mobile telecommunications industry (Tele-talk). It might carry unfair Government advantages and cause
severe problems to all other mobile phone operators.
12. Assessment of CityCell’s current
state and future direction
12.1 Current
State
The primary strategic choice that has
affected them is such a manner is their choice of technology. Although CDMA
technology is far in advance from other technologies, it has yet to gain a
significant acceptability in Bangladesh
A very important aspect of current
operations is the severe effect that centralization of organization has on
operations. The regional offices are responsible for handling phones only in
that zone. There is a severe lack of coordination between the various regional
offices which has a detrimental effect on customer satisfaction. Worse, the
entries for each zone are done all on one floor in the head office at the vast
majority of customers buying their sets directly from PBTL, it means that they
are also dependent on PBTL for repairs and spare part needs. Thus the current
staffs who work at repairs and servicing are severely overworked. This affects
morale and employee satisfaction, reducing the efficiency of set-servicing
process and thus has results in dissatisfied customers. In all PBTL is a
company with immense potential, but it remains to be seen whether management
can fully harness this potential. The potential is present in all the factors
of operations:
1) The technology is very advanced
and has immense potential
2) The labor factor is strong with
some very capable staff
3) PBTL has sufficient capital to
undertake infrastructure investments
4) There is still a significant
portion of goodwill towards the company from its stakeholders
What PBTL needs to do now is to
harness all these positive factors, negate the detrimental ones and move
forward.
12.2 Future Direction of the Company:
CityCell appears to be moving towards
a more customer oriented approach to its overall customer policy. Gone are the
days when PBTL could dictate terms to its clients. These days PBTL has to spend
an increasing amount of time covering its shortfalls and persuading customers
to stay with them. This is especially worrying after what is perceived to be by
many industry insiders a concerted effort by Grameen Phone to make headway into
the corporate market – a domain that was once almost exclusively under PBTL.
What PBTL is really looking for is a way by which it can seriously bounce back
into dominant position. The primary reason for choosing CDMA is that they hope
to be able to implement the next generation
(3G or CDMA 1x) mobile phone features such as voice conferencing, Internet,
sending visual data, etc into their services. It remains to be seen how
successful they are in harnessing the full power of CDMA technology.
There is also a proposal to decentralize
their organization in order to be able to better serve their customers in the
far reaching regions of the country. This means that many major functions will
be spread out throughout the country divided according to customer regions. It
is yet to be seen how much decentralization may occur, but it is a major issue
under consideration. Then there is the sale of data link to corporate clients.
This will gather significant revenue for the company as well as solidify its
position with its corporate clients as their primary information transfer and
telecom provider. The incongruities between the various tariff plans of the
various packages are to be removed both to make it much easier for customers to
budget usage and also to increase the value for money of each package.
12.2.1 Upcoming features of CityCell:
- UTK
(User Tool Kit)
- International
Roaming/ SMS
- MMS
(Multimedia Message Service)
- MCRBT
(Multimedia Color Ring Back Tone)
- Infotainment
- Internet
Access@144 kbps
- PTT
(Push to Talk)
- Electronic
Top Up
12.2.2 Acquisition of SingTel: Singapore Telecommunications Limited
(SingTel) recently announced that it has invested US$118 million for a 45 per
cent equity stake in Pacific Bangladesh Telecom Limited (PBTL). In addition, SingTel has a call option to
increase its equity interest in PBTL to 60 per cent for an additional US$65
million. The option can be exercised
between 1 April and 30 June
2007 .
The recent investment made by SingTel
has created a lot of options for the company. Everyone is expecting that network
expansion and technology up gradation will occur at a fast pace. This is
especially important if we consider the fact that slowly boundaries are opening
and technologies are improving. GSM will give way to more advanced technologies
like CDMA and there will soon be no national boundaries as defined in the
telecom industry. If that happens and the telecom sector is further
liberalized, then PBTL can look forward to increased growth and revenue.
Figure 17: SingTel: Group Structure
Shareholder
|
Present
|
Phase 1
|
Phase 2
|
%
|
%
|
%
|
|
Pacific Motors
|
40
|
31
|
31
|
FETL
|
30
|
24
|
9
|
AIDEC
|
20
|
-
|
-
|
Fujitsu Ltd
|
10
|
-
|
-
|
SingTel
|
-
|
45
|
60
|
Total
|
100
|
100
|
100
|
Figure 18: ShareHolding of PBTL:
Present & Future
12.2.3 Strengths & Opportunities from SingTel:
1. Equity injection of $90M (in phase 1)
will give necessary thrust in aggressive expansion strategy of PBTL.
2. A multinational corporate like
SingTel as a major stakeholder will give enhanced access to funding.
3. SingTel, as an international player,
will provide incremental leverage over vendors (handsets, equipment).
4. SingTel brings in 120 years of
expertise – innovation, quality, efficiency, and corporate governance.
5. PBTL with SingTel is better poised to
capture the market potential & become the market leader.
6. Benefit from seamless coverage across
SingTel network in Asia and international
access across the world for international roaming through its submarine &
satellite network.
13. Presenting the Survey
Results
13.1 About the Respondents
This bar chart represents more-or-less
a normal distribution curve. Nearly 70% of the sample is between 21-40 years of
age. Respondents are largely in service (as represented in the pie chart) or
students. This means a good 30% of the sample fall into the youth segment.
13.2 Regarding CityCell subscribers
Q
|
Which
is your first mobile phone –
|
CityCell
|
47
|
||
Grameen
|
25
|
||||
Aktel
|
6
|
||||
2
|
|||||
Results show that 42% of the
respondents have switched from other operators to CityCell in the past 8 years
or so. This question has tried to find out the level of dissatisfaction among
the users of mobile phone in the market at present. About a half of the
respondents have found other operators as not upto ‘standard’ or upto
expectation. The next few questions aims at finding out about their (42% of the
respondents’) switching pattern and why they’ve chosen CityCell or why the
other 58% are still using CityCell.
Q
|
How
long have you been using –
|
a. A mobile
|
||
b. CityCell
|
||||
Ans
|
a. 1 m – 1 yr
|
12
|
b. 1 m – 1 yr
|
23
|
|
a. 1 – 3 yrs
|
21
|
|
b. 1 – 3 yrs
|
31
|
|
a. 3 – 5 yrs
|
16
|
|
b. 3 – 5 yrs
|
18
|
|
a. 5 – 8 yrs
|
23
|
|
b. 5 – 8 yrs
|
8
|
|
a. More than 8 yrs
|
8
|
|
b. More than 8 yrs
|
0
|
This graph reveals an interesting
picture. The light-colored bars represent number of mobile-users while the
corresponding dark-colored bars represent number of CityCell users. There are
fewer mobile users from 1 month to 5 years, while more are using the mobile
(other operators) for more than 5 years. On the contrary, more people are CityCell
users from 1 month to 5 years while less people have been with CityCell for
more than 5 years. Interestingly, there are no CityCell subscribers using this
operator for more than 8 years! [Grammen Phone has been in the market for a little more than 8
years, while oddly enough CityCell has been operating for 12 years! So, even
though a sample, where are the long-time users? ].
This trend may represent that
CityCell users for more than 6-7 years have started to switch to other operators
and/or that brand loyalty is low among users of this operator. Its about time
that CityCell should be looking into its customer retention plans and loyalty
programs in an effective manner.
Q
|
Why do you like/still use CityCell? OR, why have you switched
to this operator?
|
This question has been put forward to
the 42% of respondents who have switched to CityCell in the past 8 years or so
and to that 58% of the sample who are still using CityCell. It is to be noted, out
of this 58%, about 38% are CityCell users from 1 month to 3 years only. So, basically this pie-chart represents a good opinion of the 42%
switchers and of 20% of the CityCell ‘loyalists’, who have been using the brand
for more than 5 years.
The sample has clearly mentioned as
lower call rates being the most important reason (33%) of switching to [and
also still using] CityCell. According to the data and trend, these switchings
have taken place predominantly between the last 3 years or so. At that time,
CityCell rates were the cheapest in
the market, as suggested by the press advertisements. As of the present, the
scenario would be revealed and discussed later on.
The second most important reason (28%)
has been [good] connectivity to BTTB. Again, years back, CityCell has been the
pioneer operator to offer both-way BTTB connectivity. This factor is still
considered as a major feature of CityCell mobiles.
All the other reasons of this
question go unheeded as below 7% of the sample have responded to them.
Q
|
Do you
use any other connection besides CityCell?
|
||||
No
|
47
|
||||
Yes
|
33
|
||||
This is quite alarming for any
operator whose sample subscribers reveal that they are using another connection
besides CityCell. Why is that? In which way is CityCell not being able to
provide it all for its valued customers? What is it that other operators are
providing more for which CityCell’s profits are being divided up? The following
question may give an idea –
Q
|
If yes, which connection do you use and why?
|
Reasons
|
|||||
Grameen
|
19
|
Network
|
16
|
||||
Aktel
|
7
|
Network
|
6
|
||||
Sheba/Banglalink
|
5
|
Free SMS
|
5
|
||||
Tele-talk
|
2
|
T&T i/c free
|
2
|
||||
Among the 33 of the 80 respondents
who say they use another connection, 19 use GP for the single most important
reason being strong/available network. The same features for Aktel, the second
largest mobile operator now in the country. In other words, 67% of the
respondents who use another connection besides CityCell do so because of the
network.
Although findings later on will show
that CityCell has satisfied its customers with access to BTTB and arguably the
lowest billing rate, the previous findings has demonstrated that it has not
been performing well to retain its subscribers in terms of providing a strong
network solution.
13.3 Customer Retention Scheme: Loyalty
Program
These are some of the benefits that
may be offered to loyal/high-end users of CityCell. This is a feedback from the
respondents who opine that discount call rate/line rent and exclusive customer
care are three of the most elusive benefits that can be enjoyed. The privilege
service to be introduced to the loyal/high-end users under the customer
retention scheme, includes – exclusive customer care, an elite privilege card
and special discounts to be enjoyed from various stores/shops/eating places,
etc. All these benefits have received good appreciation from the respondents
scoring above average for every case.
Q
|
Do you plan to stay with CityCell in the next 6 months to 1
year despite the presence
of other operators?
|
Another alarming data which says 45%
of the CityCell subscribers may not continue with the operator and has a good
possibility of switching. Again, this calls for rigorous customer retention
plans.
Reasons
|
|||
Yes
|
44
|
Image/Loyalty
|
19
|
Lower call rates
|
14
|
||
BTTB connectivity or i/c
facilities
|
7
|
||
Hassle to change
|
4
|
||
No/I might not stay with
CityCell
|
36
|
Network
|
24
|
Handset flexibility
|
9
|
||
Attractive package/benefits
|
6
|
A good point in this may be that about
45% of the respondents who say that they are going to stay with CityCell (58%) for
the next 1 year or so, state the reason of image/being loyal with the operator.
CityCell can certainly cash in on this customer behavior towards the operator
and try its best to retain the other 45%. Once again the issue of network boils
in as a good 65% of this 45% complains of this as the primary reason of not
staying on with CityCell.
Q
|
If No/might
not stay, would the mentioned benefits make you think not to switch to other operators?
|
|||||
Yes
|
21
|
|||||
No
|
13
|
|||||
Maybe
|
2
|
|||||
This question is
in view of the benefits
discussed one question earlier. In a surprise reaction, 60% of the respondents decided
to change their minds to switch in the next 1 year or so if the mentioned
benefits were to take effect. In reality, these benefits would not be for the
general subscribers but for those who are CityCell’s long-term or high-end
customers. But this response may suggest that the same may be applicable for
those target subscribers. But 42% replied they would still switch to other
operators. The next question is targeted towards these 15 respondents:
Q
|
If No/maybe, what would make you refrain from switching to
other operators?
|
|||||
Network
|
10
|
|||||
Connectivity to mobile
|
2
|
|||||
Extent of discounts in outlets
|
1
|
|||||
Nothing would*
|
2
|
|||||
80% of these 15 respondents cite the problems of network/connectivity
as the factor of switching.13.4
Customer Retention Scheme: Discount services for subscribers
If one follows each of the colors carefully,
one would notice quite some disparities among the expected and actual figures.
For instance, shopping mall is the highest expected type of outlet to be
enjoyed discount from, whereas, there has been only 4 of them covered under the
discount scheme which is placed at no. 5 in the second table. The same goes for
music & movie store (light blue), and gift/flower shops (dark brown) and
hospitals (placed at no. 2 in the first table, but last in the second table!). Restaurants & fast food shops have
well been taken care of.
13.5 Concerning CityCell
Respondents have cited good
connectivity to BTTB (31%) and lower call rates (24%) as two of the major
strengths of the company. On the other hand, worse network (26%), not standard
handsets (20%) and bad connectivity to other mobiles (19%, which is again a
representation of a weak network infrastructure), have been suggested as the
three major weaknesses of CityCell. There is a mixed opinion regarding Customer
care as 9% think of it as strength, while 11% terms it as a weakness for the
company. Same goes for Value Added Services (VAS). A good 22 persons of 80
respondents have complained higher call rates as a weakness factor. This is a
point to be concerned, as all along, call rates have been a strong case for the
company.
This is another way of looking at the
strengths/weaknesses of CityCell. Respondents here have been asked to rate the
various factors of the company. 5.82 is the average score for these factors. VAS
falls just above this score, meaning
respondents do not think there are enough/useful value added services in store
for them. Quite far below this score is the factor, ‘Initiatives taken by the
operator for the valued subscribers’.
Keeping exactly this in mind, the Customer
Care & VAS department of CityCell has planned to launch a privilege service
for a certain portion of its valued customers for the Customer Retention Plan
of CityCell.
14. The Customer Retention
Scheme for CityCell Subscribers
14.1 Prologue
CityCell has planned to
introduce “Trump Card” – a Privilege Service for its valued customers. This
service would allow CityCell subscribers to avail different products and
services at a reasonable discounted price from various renowned outlets [shops,
restaurants, department stores, and other kind of service providers] all around
the major cities of Bangladesh
• Platinum Card
• Gold Card
• Yo' Card
• Virtual Discount Card (SMS Coupon)
14.2 Objectives
of the Privilege Service
The Privilege Service is aimed to
have a profound effect on the company and its subscribers. The main objectives
of this service are –
§ To retain customers and create loyalty
§ To create high-end users among existing
subscribers
§ To give recognition to high revenue-generating
& loyal users of CityCell
§ To increase revenue & ARPU through
possible increased bills and SMS activities
§ To provide an extra value to CityCell’s
premium users built on the “Because We Care” theme.
14.3 Target
Audience
Between post-paid and pre-paid packages CityCell has
segregated its customers into two major categories according to their time period and billing status:
§ Long-term Customer
§ High-end Customer
Long-term
Customer: These
are loyal post-paid subscribers who have been active with CityCell for a period
of 5 years and above.
• Active Since 1993 = 302 subscribers
• Active Since 1994 = 241 subscribers
• Active Since 1995 = 399 subscribers
• Active Since 1996 = 706 subscribers
• Active Since 1997 = 1,963 subscribers
• Active Since 1998 = 1,035 subscribers
• Active Since 1999 = 2,454 subscribers
§ Subscribers who have never been deactivated
since 1995 or before that, have completed a decade or more (10-12 years) with
CityCell. In view with this, these customers would be enjoying the Platinum
privilege. This card is entitled to get the highest amount of discount among
the tier. [Approx.
950
subscribers entitled according to data]
§ Active subscribers with CityCell since
1996-99, shall be enjoying the Gold privilege. Upon completion of their 10th
year, subscribers in every tier shall be rewarded with Gold Card. For example,
active subscribers since 1997 shall be completing their 10th year
with CityCell on 2007. [Approx . 6,200 subscribers to be entitled from 2006
upto 2009]
High-end
Customer:
§ Post-paid subscribers paying a monthly bill of
over 5,000 Taka would be enjoying the Platinum privilege.
§ Post-paid subscribers paying a monthly bill
between 2,500 and 5,000 Taka would be enjoying Gold privilege.
§ Post-paid/pre-paid subscribers who are among
the youth segment of the population would be provided with the Yo card, coming
free with a new package called ‘Aalap Call Me’. [This package is a full
BTTB connectivity package with the unique and innovative ‘Call2Cash’ feature,
where subscribers will get Tk. 0.25 added to their account every minute when
they receive calls from other CityCell phones]
§ Post-paid/pre-paid subscribers paying a
monthly bill of less than 2,500 and not among the youth segment, can avail the
pioneering SMS Discount Coupon service. The Virtual Discount Card is a completely new discount idea
through “SMS Discount Coupon”. This ‘virtual’ discount coupon can be
availed by the subscriber upon typing the name of the shop/restaurant/hospital
and sending the SMS to a designated number of CityCell. Upon receiving this, an
SMS Coupon will be sent to the sender (both Post-paid and Pre-paid subscribers)
through SMS with a text containing the validity period of the coupon. The
‘Coupon’ may have the following message to the sender and the participating
outlet:
‘Welcome to … [name of oulet], you can enjoy …% discount.
This is valid for today […date] only. Thank you.’
14.4 Competition
There are similar privilege
discount cards like, Djuice Xtra Khatir Card by Grameen Phone and another
discount card by Aktel (Not yet launched).
14.5 IMC
(Integrated Marketing Communications) Options
The main role of the
Trump card advertising would be to give the customer a feeling of being
exclusive. Various promotional activities would be undertaken a few days/weeks
from the date of launch (date of launching yet to be decided).
§ Personalized letters mailed to the
targeted subscribers along with the Trump Card.
§ Newspaper advertisements in major dailies
would be a medium to aware the possibilities of the Trump Card as well as to promote the
partners.
§ A booklet-styled or a 3/4-fold brochure would
also be distributed to the target market.
§ Various Branding/Promotional materials would be
placed in different outlets for maximum visibility and clarification to
subscribers-cum-shoppers.
14.6 Branding/Promotional
Materials
§ Cards
§ Flyers
§ Stands
§ Posters
§ Stickers
§ Danglers
§ Brochures
§ Catalogues
§ Display Items
14.7 Design
Theme
§ The Platinum card will get the
highest amount of discount from the merchants. The card would reflect the idea
of being the most exclusive and precious.
§ The Gold card will get slightly less
discount than the platinum card, but it should not give the customer the
impression of being less important.
§ The Yo card would have a funky look
with lot of colors to appeal to the youth generation.
14.8 Benefits
14.8.1 Benefit to
Customer/Cardholder:
§ Feeling of being honored and privileged
§ Discounts from various outlets: reduced
expenses in purchasing goods and services
§ Participation in different activities/events
organized by CityCell
§ Exclusive service at CityCell Front Desk &
Customer Care (For Platinum & Gold Card-holders only)
14.8.2 Benefit to
outlets/valued business partners:
Such introduction of discount cards
would have a direct positive impact on the sales of CityCell’s participating
product and service partners. The decision of the amount of discount provided rests
solely on the outlets. The attractive discount offers are sure to increase
visit frequency of the subscribers to the participant’s outlets. An obvious
point to mention is that CityCell has a rich portfolio of 4,50,000 eligible
subscribers to be registered for these privilege card/coupon services. This is
also an opportunity to enhance the participant’s business revenue by ensuring a
higher sales volume through participating in the Privilege Card Services of
CityCell.
§ Direct Promotion
§ Increased Customer Flow
§ Higher Sales Volume
§ Affiliation effect with a larger and a more
widely-branded organization
Activities from
CityCell’s end for the outlets:
·
Press
campaign
·
Press
advertisements in leading national dailies
· Separate promotional brochure to be
delivered to all the CityCell subscribers
·
Supply
of Branding/Promotional materials to the participant’s outlet(s)
·
Display
of outlets’ logo in the SMS coupon
14.8.3 Benefit to
CityCell
§ Retention of customers
§ Lower ‘Customer Discontinuation Rate’
§ Increased loyalty among existing customers
§ Improved customer relationship & corporate
image
§ Increased Brand-visibility through
POS materials at outlets
§ High self exposure through CityCell’s high-end
& loyal users
§ Increased revenue through possible increased
bills and SMS activities
§ Relation of Trump Card with
Customer Retention & Loyalty:
§ Existing customers would prefer to continue
their subscription for the added benefits
§ Discontinued customers can be pushed to
restore their subscription
§ Customer Retention Team can use the Card as an
added tool
§ Cardholders will be able to participate in
various programs/events using their cards
§ Increased revenue with
Trump Card:
§ Cardholders will try to keep up their
usage to maintain eligibility
§ Subscribers who lack eligibility for
a nominal amount (minimum Taka 2,500 per
month) will try to increase usage to achieve eligibility of holding a card,
resulting an increase in revenue
§ New
subscribers will be tempted to achieve eligibility of holding a card, resulting
another increase in revenue
§ Non-card holders shall be availing
the Virtual Discount Coupon through SMS usage thus increasing revenue
collection through VAS (Value Added Service)
§ Issues with Strategic
Partners:
Complementary Trump Cards
can be distributed to strengthen relationship with key strategic partners of
CityCell.
§ Benefit to employees of
CityCell:
Employees of CityCell
shall be provided with a Trump Card (Platinum or Gold, depends on management
hierarchy), through which they would be able to enjoy similar benefits as the
high-end subscribers. This would also add to their job satisfaction and
motivation.
14.9 Extent of
Coverage of Trump Card Business Partners
§ Dhaka :
·
Restaurant 39
·
Fast
Food Shop 24
·
Clothes/Fashion
House 15
·
Hotels
& Rest House 11
·
Gift/Flower
Shop 5
·
Shopping
Mall 4
·
Saree
& Gold House 4
·
Beauty
Care Centre 4
·
Billiard
& Pool Centre 3
·
Sports
Store 2
·
Furniture House 2
·
Book
Stores & Music 2
·
Digital
Security 1
·
Education
[Coaching] 1
·
Manufacturing 1
·
Dry
Cleaner 1
·
Bakery 1
·
Cyber
Café 1
·
Sweetmeat
Shop 1
·
Hospital & Clinic 1
Total 123
§ Chittagong
·
Restaurant 15
·
Hotel 7
·
Fashion
& Music 3
·
Furniture
House 2
·
Fitness
& Swimming 2
·
Cyber
Café 1
·
Diagnostic Center
·
Super Shop 1
Total 32
§ Sylhet:
·
Hotel,
Restaurant & Fast Food 7
·
Dress,
Handicraft & Saree 7
·
Sport 3
·
Electronics,
Cyber Café & Computer 2
·
Departmental
& Super Store 2
·
Jewelry
& Gift Shop 2
·
Travel
Agency 1
·
Others 1
Total 25
§ Khulna
·
Hotel,
Restaurant & Fast Food 7
·
Fashion 3
·
Shopping Mall 1
Total 11
§ Rajshahi:
·
Hotel,
Restaurant & Fast Food 4
·
Hospital
& Clinic 1
·
Shopping
Mall 1
·
Beauty Care 1
Total 7
Grand
Total 198
14.10 SWOT Analysis of the Privilege Services of
CityCell
§ Strengths
§ Previously launched in July 2002 so
the brand name is well-established
§ Only loyalty card in the industry
that covers all classes of customers
§ Launching with 198 Signed Merchants
o GP has launched XTRA Card with 15
merchants only
§ Merchants in 5 major cities
§ 4 Tier Discount Cards
§ Exclusive Cards for Post-paid
Subscribers
§ Continuous Effort to increase
Merchants
§ Weaknesses
§ Less than 35,000 (lowest subscriber
base) eligible Post-paid Privilege card holders in launching phase
§ No full-time dedicated employee to
maintain and run the program
§ Opportunities:
§ Introduction of “Points” System on
card usage
§ Introduction of Branding Activity
through the signed Merchants/participants
§ Other merchants may and will be
interested in carrying the card once they see how it attracts traffic
§ Nationwide coverage (future)
§ Threats
§ Introduction of Competitor’s
Privilege Card
o
GP already launched XTRA Card through
“djuice”, may go for increasing merchants and merchant loyalty by offering
extra-privileges to them.
o
AKTEL is actively working on
launching Privilege Cards which would be launched any time soon.
§ Merchants’ non-cooperation in entertaining
the discount cards can result in a bad impact on the brand and organization
15. Recommendations
I have designed my recommendations concerning
the ‘Customer Retention Scheme’, aiming to help improve CityCell in retaining
its customers. I have also tried to present recommendations about current
weaknesses of the company and about various factors of dissatisfaction among
the existing subscribers. My recommendations are:
È The Privilege Services of the
Customer Retention Scheme of CityCell should be launched as soon as possible as
‘djuice’ of Grameen Phone has already started to saturate a certain segment of
the market through its ‘X-tra Khatir Card’. As first-movers advantage, GP has
already secured a confident berth ahead of CityCell.
È The types and numbers of discount outlets
brought under the Discount Service scheme should seriously be reconsidered and
restructured following a more extensive survey. My research clearly shows a gap
between customers’ expectations and outlets already brought under the discount
service.
È There are a few benefits mentioned in
the questionnaire, such as discount call rates, discount line rents, etc. which
have received quite an applause from the respondents. A few more creative and
worthy benefits [appreciated by the loyal subscribers and cost-effective for CityCell]
can be brought into the pipeline and introduced as benefits for the loyal
customer faction.
È Privilege Services for the
subscribers is not the only means by which CityCell can afford to retain its
loyal customers. Immediate and effective solutions should be taken in terms of
its weak areas as pointed out by the respondents.
È CityCell needs quick expansion in
network development all over Bangladesh
È Although CityCell has ‘lower call
rates’ associated with its brand name, other operators have already come up
with various attractive packages and options such as, My Time, My Choice, [GrameenPhone],
10 second pulse and BTTB incoming free for the 1st minute for all
pre-paid subscribers [Aktel], double talk-time for a single prepaid card
[Banglalink]. So there should be more initiatives and striking benefits for
their subscribers a la its loyal
& high-end users.
È The Value Added Service (VAS)
department should be coming up with more ideas to entertain its customers. This
department has its potential but should be using it to the fullest to provide
even more useful services to cater to customers’ needs and wants.
È Customer Care has turned out to be
one of the most focused points in the telecom industry. Survey results show
subscribers expect a lot out of it and would appreciate special care
facilities. Therefore the ‘Call
Center
È Availability of quality handsets is a
major and growing concern among CityCell subscribers. may go for strategic
alliance with Mobile phone manufacturer like LG Electronics, Motorola, Nokia,
Samsung, Audiovox Corporation or Hyundai or other CDMA phone manufacturer to
have technical support and for availability of various CDMA sets.
[
16. Conclusion
I would like to start the conclusion
part by restating the hypothesis of my study. My hypothesis was “Although PBTL
brought ‘CityCell’ as the first mobile telecommunication service in the
subcontinent but its customers are not fully satisfied with the service. If
PBTL does not take care of these dissatisfactions and another company enters
the market with similar offers, it will be difficult for PBTL to retain its
subscribers, thus maintain its position and increase its market share”.
From the analysis of the survey
results, it is clear that CityCell’s subscribers are dissatisfied about
different services of the company. Moreover, the analysis indicated that the
subscribers are not quite loyal to the company. Some of the respondents have clearly
pointed that if CityCell does not work on its weaknesses, they will not
hesitate to switch. So, my hypothesis proves to be a valid one. I firmly
believe that if CityCell follows my recommendations, it will be able to achieve
a sustainable distinctive competitive advantage and to run smoothly with loyal
subscribers & market leadership.
Thank you for your comment
ReplyDelete