Report on Telenor
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A Report on telenor Report on Telenor
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Acknowledgement
At first, I would like to thank Allah Almighty most Beneficiary the merciful enable us to complete this project report. Then thankful to our Marketing Professor Ms Raheela who teach us marketing concepts that we apply in this report. Many thanks also to my group members who shared time with together and also share their knowledge and ideas to complete c omplete this project. One of our senior Waqas Butt who guides us to complete this project. Our college teacher Mr. Mahboob Asim Bloch who provide us reference at Telenor. Thanks to all class fallows who had shared ideas on different topics and had really nice time with them. And in last thanks Ch. Ali Abbas the manager telenor Cantt franchises who provide us data about telenor.
20 April, 2008 Muhammad USMAN Group Leader
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Our Group Name
Sr. #
Muhammad USMAN
18
Muhammad Bilal
24
Usman Younis
26
Ahmad Arslan Butt
31
Sohail Ashraf
41
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Table of o f Content Con tent •
•
•
History…………………………………………………………………6 o
Major Shareholders…………………… Shareholders……………………………………………7 ………………………7
o
World wide Coverage……………………………… Coverage…………………………………………8 …………8
o
Telenor in Pakistan…………………… Pakistan……………………………………………9 ………………………9
Telenor at Glance……………………………………………………..11 Portfolio…………………………………………… Portfolio……………… ……………………………………………….12 ………………….12 o
Mobile Phone Services………………… Services……………………………………..…12 …………………..…12
o
TV and Broadcast……………………… Broadcast…………………………………………..…12 …………………..…12
o
The Internet…………………… Internet……………………………………………… ………………………………12 ……12
•
Vision………………………………………………………………….13
•
Values………………………………………………………………….13 o
Be Respectful…………………… Respectful……………………………………………… …………………………….13 ….13
o
Be Inspiring……………… Inspiring…………………………………………… …………………………………....13 ……....13
o
Keep Promises……………………………………… Promises………………………………………………....13 ………....13
o
Make it Easy………………………………………………..…13 Easy………………………………………………..…13
•
Mission………………………………………………………………..14
•
Objectives……………………………………………………………..14
•
CEO’s ………………………….……………………………………..15
•
Directors……………………………………………….………………16
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Products & Services…………………… Services……………………………………...…………… ………………...……………19 19 o
Mobile Fun………………………… Fun……………………………………….……………19 …………….……………19
o
Mobile Interaction……………………… Interaction…………………………….………………20 …….………………20
o
Mobile Commerce……………………… Commerce…………………………….………………22 …….………………22
•
Research - the Future is now………………………….………………23 now………………………….………………23
•
Segments………………………………………………………………24
•
SWOT Analysis……………………………………….………………25
•
•
o
Strengths………………………………………………………25
o
Weakness………………………………………………………25
o
Opportunities………………………………………………….25
o
Threats…………………………………………………..…….25
Marketing Strategies………………………………………… Strategies………………………………………….……….26 .……….26 o
Deliver increased profitable growth………………….…… growth………………….………..26 …..26
o
Strengthen our performance culture across the Group……..…26
o
Make responsible business a competitive advantage……….…26
o
Provide a superior customer experience……………………….27 ex perience……………………….27
o
Ensure best practice benchmarking across the Group…………27
o
Drive change and constant renewal……………………………27
o
Improving our performance management……………………..27
o
Challenges ahead……………………………… ahead………………………………..…………….28 ..…………….28
Marketing Mix……………………… Mix………………………………………..………… ………………..……………….29 …….29 o
Product………………………………………………….……..29
o
Price………………………………….………………………..30
o
Place……………………………………..…………………….31
o
Promotion………………..…………………………………….31
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Major Competitors………………… Competitors…………………………….………………… ………….……………………....33 …....33 o
Major competitor……………………… competitor………………………………………………33 ………………………33
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Conclusion…………………………………………………………….34
•
References……………………………………………………………..35
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History of Telenor Telenor is the leading telecommunication company in Norway, which is one of the most advanced advanced telecom telecommun munica icatio tion n markets markets in the world. world. Norway Norway has one of the world’ world’ss highest penetration rates for mobile, fixed line digital telephony, personal computer and internet usages. The history of Telenor goes back a long way in 1885, when telegraphic service was established under the name of “Telegrafverket- a government institution”. The Norwegian Telegrafverket has had several names throughout the time of existence. In 1968, the organization of Televerket has been changed. The central administration was removed from the Ministry of Post and Transport and converted into an independent state enter enterpr pris isee with with its its own own boar board. d. The The rese resear arch ch inst instit itut utee of Telev elever erket ket,, Televe eleverk rket etss Forsknings institute (TF) was established at that time. Previously, Televerket did not conduct any in house R&D activities. In 1971-77, the regional division of Televerket was reorganized. Before it consisted of 12 districts and 150 local administrative units, which then had been turned into a new structure of 7 tele-regions and 27 tele-areas. A new reorganization took place, when Norwegian National Parliament in 1985 decided to alter the the organ organiz izat atio ion n of Telev elever erke ket. t. But But it was was not until until 1988, 1988, the the deci decisi sion on had had been been implemented. In reality, Televerkets monopoly has been eradicated through these reforms and it paved the way for more competition in, amongst others, user equipment and cable TV. From 1989, Televerket was also allowed to compete in the market for value added services. In 1994, the Parliament again decided to convert Televerket into a state-owned public limi limite ted d compan company y. This This took took plac placee in Novem November ber in the the same same year year.. In earl early y 1995, 1995, Telever eleverket ket AS changed changed its name name to Telenor elenor AS, with with a new and busine business ss orient oriented ed organization structure (Hauknes, & Smith, 2003).
Key Figures The table below contains pro forma key figures (including Kyivstar) for the fourth quarter and the full year of 2008, compared to the previous year:
NOK in Millions Expect Earning Per Share
Fourth Quarter 2008 2007
Full Year 2008 2007
Report on Telenor
7 105,021
Revenues
29,925
NOK in Millions Expect Earning Per Share
26,914
Fourth Quarter 2008 2007
111,015
2008
Full Year 2007 34.6
EBITDA EBITDA margin margin before before other other income income and expenses (%)
33.2
3 2 .8
34.7
Adjusted operating profit/revenue (%)
18.1
1 7 .7
20.4
2,205
5,869
13,307
1.33
3.49
7.97
10.72
Capex
7,223
7,084
22,699
22,079
Capex excl. licenses and spectrum
6,738
6,672
20,664
21,635
169
447
1,866
6,041
Profi rofitt afte afterr interests
taxe taxess
and and
nonnon-co cont ntro roll llin ing g
Earnin Earnings gs per share share from from total total operat operation ions, s, basic, in NOK
Investments in businesses Net interest-bearing liabilities
39,289
19.7
18,016
36,464
Major Shareholdings As of 1 March 2009 Sr. #
Shareholder
No of Shares
Country
% of Total
1
The Government, by the Ministry of Trade a nd Industry
894,683,140
NOR
53.97%
2
Folketrygdfondet
75,036,061
GBR
4.53%
3
JP MORGAN chase bank Nordea Treaty
75,036,061
NO R
4.28%
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Account* 1.67% 4
State Street Bank and Client Omnibus *
Sr. #
27,734,631 No of Shares
Shareholder
USA Country
% of Total
5
State Street Bank and A/C Client Fund *
25,181,586
USA
1.52%
6
J.P. Morgan Chase Bank 1449 Euro Pac *
23,488,830
USA
1.42%
7
Bank of New York S/A Mellon Nominee*
23,485,267
USA
1.42%
8
Clearstream Banking CID Dept., Frankfurt*
21,765,966
LUX
1.31%
9
J.P. Morgan Omnibus Lending Account *
17,254,486
GBR
1.04%
10
J.P. Morgan Capital World*
17,049,600
USA
1.03%
11
HSBC Bank PLC S/A RE Gulf
13,392,246
ARE
0.81%
12
USB (Luxembourg) Account*
12,074,830
LUX
0.73%
13
J.P Morgan Chase Bank Depositary*
11,437,512
USA
0.69%
14
RBC Dexia Account *
10,790,630
GBR
0.65%
15
Rasmussen Gruppen AS
9,800,000
NO R
0.59%
9,236,998
GBR
0.56%
6,885,203
SWE
0.42%
6,879,461
NO R
0.41%
6,634,263
SWE
0.40%
6,553,350
NO R
0.40%
16 17 18 19 20
Inve nvestors
S.A.
Ordinary
Client
The Norther hern Thru hrust C USL Account* Skand kandin inav avis iska ka Ensk Enskiilda lda A/C A/C Account* DNB NOR Norge (IV) VPF Svenska Handelsbanken Handelsbanken AS
Treaty aty
Treaty aty Treaty eaty
C/O
DNB NOR Bank ASA Egenhandelskonto Total 20 largest
1,290,248,1 23
77.82%
Others
367,640,723
22.18%
Report on Telenor
Total shares Total number of shareholders:
9 1,657,888,8 46
100.00%
41,916
* Nominees
Worldwide Coverage The Telenor Telenor Group is committed committed to engage in the local communities where we operate. operate. Take a look at our latest initiatives in our operations worldwide. • • • • • • • • • • • •
Bangladesh Denmark Hungary Malaysia Montenegro Norway Pakistan Russia Serbia Sweden Thailand Ukraine
Telenor in Pakistan Telenor Pakistan is 100% owned by Telenor ASA and adds on to its operations in Asia together with Thailand, Malaysia and Bangladesh. Telenor elenor Pakist Pakistan an launche launched d its operat operation ionss in March March 2005 as the single single larges largestt direct direct European investment in Pakistan, setting precedence for further foreign investments in the telecom sector. The company has crossed many milestones and grown in a number of directions, making Telenor Pakistan a leading telecom operator of the country c ountry.. They are the fastest growing mobile network in the country, with coverage reaching deep into many of the remotest areas of Pakistan. In the most difficult terrains of the country, from the hilly northern areas to the sprawling deserts in the south, at times we are the only operator connecting the previously unconnected.
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They are keeping ahead by investing heavily in infrastructure expansion. With USD2 billion already invested, they have extended agreements with our vendors for network expansion and services until 2009. The agreements, with a potential to result in USD750 million worth of orders from Telenor Pakistan, are some of the biggest of their kind in the industry. They They are are spre spread ad acro across ss Paki Pakist stan an,, creat creatin ing g 2,50 2,500 0 dire direct ct and and 25,00 25,0000-pl plus us indi indire rect ct employment opportunities. They have a network of 23 company-owned sales and service centers, more than 200 franchisees and some 100,000 retail outlets.
Telenor ASA is an international provider of high quality telecommunications, data and media communication services. It ranks as world’s 7th largest mobile operator with a total of 164 million subscribers in its mobile operations. Telenor Pakistan is 100% owned by Telenor Telenor ASA and adds on to its operations operations in Asia together with Thailand, Malaysia Malaysia and Bangladesh.
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Telenor at a Glance The Telenor Group is a leading provider of telecommunications services worldwide. The company has a strong footprint in Central Eastern Europe and Asia and a leading Nordic position in mobile, broadband and TV services. The Telenor Telenor Group is listed listed on the Oslo Stock Exchange, Exchange, with headquarters headquarters in Oslo, Oslo, Norway. Telenor started out as a public company in 1855 and builds on more than 150 years of telecom telecom experience. experience. The company was ranked top performer by the Dow Jones Sustainability Indexes in 2007 and 2008. Did you know that...? •
• • •
the Telenor elenor Group Group is curren currently tly ranked ranked as the world’ world’ss sevent seventh h larges largestt mobile mobile operator (in terms of subscriptions) the revenues were NOK 111 billion in 2008 the Telenor Telenor Group has 164 million mobile subscriptions worldwide (2008) we have telecom operations in 13 countries
In one day at Telenor... elenor... • •
38,800 employees go to work in 13 countries an average of 75,000 new customers join us
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Te l e n o r ’ s P o r t f o l i o Following are the main business of Telenor. Telenor. The Internet
UMTS and Turbo 3G are both relatively new products available in the markets. These services make it simple, fast and inexpensive for customers to use their mobile phones or PCs to surf the Internet when they are away from home. 3G brought valuable access to new fields fields in densely densely popula populated ted areas areas with with less less develop developed ed infras infrastru tructur cturee – such such as Bangladesh. TV and Broadcast At present, the Telenor satellites broadcast around 200 TV channels throughout the Nordic Region, Central and Eastern Europe. Satellite broadcasting has shaped events over the last two decades and looks set to continue to have a secure position in the Nordic countries, Central Europe and the Middle East.
Mobile Phone Services By the year 2000, the mobile telephone service had become a prominent business area for Telenor Telenor and a basis for the international growth strategy. This strong position was the result of more than 30 years
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of evolution. Cooperation between the Nordic countries to create a common standard resulted in the Nordi Nordicc Mobil Mobilee Telepho elephone ne (NMT) (NMT) in 1969. 1969. This This becam becamee the start start of prolon prolonged ged inter internat nation ional al collaboration to set the future standards for mobile networks.
Our Vision Our Vision is Simple: We’re here to Help We Exist to help our customers get the full benefit of communication services in there daily lives. The key to achieving this vision is a mindset where every one of us works together: Making it easy to buy and use our services. Delivering on our promises. Being respectful of differences. Inspiring people to find new ways.
Values We believe in our values which are as following:
Make it Easy We're practical. We don't complicate things. Everything we produce should be easy to understand and use. Because we never forget we're trying to make customers' lives easier.
Keep Promises
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Everything we set out to do should work, or if it doesn't, we're here to help. We're about delivery, delivery, not over ov er promising, actions not words.
Be Inspiring We are creative. We strive to bring energy to the things we do. Everything we produce shoul should d look look good good,, mode modern rn and and fres fresh. h. We are are pass passio ionat natee about about our our busi busines nesss and and customers.
Be Respectful We acknowledge and respect local cultures. We We do not impose one formula worldwide. wo rldwide. We want to be a part pa rt of local communities co mmunities wherever we operate. We believe loyalty has to be earned.
Mission Statement Telenor is a customer customer focused focused business business mobile service operator/te operator/telecomm lecommunicat unications ions Company that seeks competitive advantage in quality and valued added service in both prepaid and postpaid categories through state of the art technology. Telenor relies on building trusting relationships with customers, owners, employees and society in general.
Objectives Following are the major objectives of Telenor: Objectives
2006-07
2015
$4
$6- $8
10%
40%
Market Penetration
9%
30%
Market Share in terms of Revenue
7%
30%
ARPU(Average Revenue Per User) Market Share in terms of Subscribers
Report on Telenor EBITA(Earning EBITA(Earning before Interest, Interest, Tax and amortization) Unprompted Brand Awareness
15 5% – 6%
10%
20%
90%
CEO and Group Executive Management The Chief Executive Officer (CEO) is in charge of the day-to-day management of the Telenor Group. The Group Executive Management consists of heads of key business areas and functions at Telenor. Telenor.
Jon Fredrik Baksaas President and CEO •
Appointed: 21 June 2002
•
Stocks: 77 156 as of 18 March 2009
•
Options: 330 000 as of 4 August 2008
Sigve Brekke Executive Vice President and Head of the Telenor Asia operations •
Appointed: 1 September 2008
•
Stocks: 10 862 as of 17 February 2009
•
Options: 40 000 as of 10 November 2008
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Morten Karlsen Sørby Executive Vice President and head of the Nordic mobile and fixed network operations of Telenor •
Appointed: January 2003
•
Stocks: 25 345 as of 17 February 2009
•
Options: 55 000 as of 4 August 2008
Jan Edvard Thygesen Executive Vice President President and Head of the Central/Eastern European •
Appointed: 1999
•
Stocks: 66 403 as of 17 February 2009
•
Options: 205 000 as of 4 August 2008
Trond O. Westlie Executive Vice President and Chief Financial Officer (CFO) •
Appointed: 2006
•
Stocks: 28 530 as of 17 February 2009
•
Options: 55 000 as of 4 August 2008
Bjorn Magnus Kopperud Executive Vice President President and Head of Group Human Resources •
Appointed: January 2006. Since 2003 he has served as Head of Group Human
Resources. •
Stocks: 13 014 as of 17 February 2009
•
Options: 90 000 as of 4 August 2008
Ragnar H. Korsæth Executive Vice President President and Head of Global Coordination •
Appointed: January 2006
•
Stocks: 8 349 as of 17 February 2009
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Options: 83 333 as of 4 August 2008
Hilde M. Tonne Tonne Executive Vice President President and Head of Communications & Corporate Responsibility •
Appointed: 1 September 2007
•
Stocks: 8 007 as of 17 February 2009
•
Options: 0 as of 20 February 2009
Board of Directors The Board is responsible for the management of the Telenor Group and the proper organization of its operations.
Harald Norvik Chairman •
Appointed: 31 May 2007
•
Stocks: 16 520 as of 10 November 2008
Bjørg Ven Vice-Chairman •
Appointed: 1 October 2001
•
Stocks: 10 000 as of 31 December 2007
Burckhard Bergmann Board member •
Appointed: 29 May 2008
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Stocks: 0 as of 20 February 2009
John Giverholt Board member •
Appointed: 8 May 2003
•
Stocks: 0 as of 20 February 2009
.
Kjersti Kleven Board member •
Appointed: 31 May 2007
•
Stocks: 0 as of 20 February 2009
Olav Volldal Board member •
Appointed: 31 May 2007
•
Stocks: 0 as of 20 February 2009
Liselott Kilaas Board member •
Appointed: 8 May 2003
•
Stocks: 0 as of 20 February 2009
Paul Bergqvist Board member •
Appointed: 7 April 2005
•
Stocks: 1 000 as of 15 February 2008
Harald Stavn Board member, employee representative •
Appointed: 20 June 2000
•
Stocks: 4 970 as of 10 November 2008
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May Krosby Board member, employee representative •
Appointed: 23 August 2007
•
Stocks: 0 as of 20 February 2009
Bjorn Andre Anderssen Board member, employee representative •
Appointed: 23 August 2007
•
Stocks: 1 324 as of 17 February 2009
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Products and Services The Telenor Group provides a wide range of innovative services that are available throughout the world. Here is a selection.
Mobile Fun Following are the mobile fun service of Telenor. Telenor. Mobile Sports
And he scores!!! You just got a text message alerting you about a sportive highlight. Luckily you don’t have to wait until you get home to watch that winning moment – you can watch it directly on your mobile. Available in: Norway, Norway, Sweden, Pakistan, Thailand, Bangladesh, and Malaysia Mobile Music
Right now there are 1 million songs ready to download to your mobile. You can share these digital rights management-free songs with with your your friend friendss and family family or transf transfer er them them to your your mobile mobile phone, mp3 player and PC. Share that funky music! Available in : Norway, Norway, Sweden, Serbia Pakistan, and Malaysia Mobile TV
Keep your favorite TV shows available in your pocket and watch them anytime, anywhere. You can easily access live TV channels on the move so you don’t have to miss out on any of the action. Keep yourself updated on news, sports, entertainment and more, directly on your own mobile phone. Available in: Norway, Norway, Sweden, Pakistan, and Malaysia Mobile Communities
Get out and about, and stay connected and in touch with your friend friends. s. With Telenor elenor you you can access access commun communiti ities es such such as
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Windows Live MSN and Facebook on your mobile and keep your friends close anytime, anywhere. Available in: Norway, Sweden
Mobile Interaction Following are mobile interaction services providing by Telenor. Telenor. Community Information Centers
500 Community Information Centers (CICs) offer high speed Internet access to rural areas in Bangladesh, where the nearest Internet facilities would otherwise be at least 20-30 miles away. The service was set up by Telenor's Bangladeshi mobile operator Grameenphone. Available in: Bangladesh Health Line
Health Line provides 24/7 access to medical services for mobile users in remote areas, several miles from the nearest doctor. All Grame Grameenp enpho hone ne subs subscr crib iber erss in Bangl Banglade adesh sh can get medic medical al assistance directly over the phone. Available in : Bangladesh ApnaPCO - Share a Mobile
Can you imagine life without a phone – at all? That is the case for many peop people le livi living ng in some some of the the most most rura rurall commu communi niti ties es in Paki Pakist stan an.. ApnaPCO ApnaPCO is a busine business ss-in -in-a-a-box box soluti solution, on, which which allows allows people people in remo remote te area areass to shar sharee a mobi mobile le phon phonee wher wheree ther theree are are no othe other r alternatives – making life a little easier. Can you imagine life without a phone – at all? That is the case for many peop people le livi living ng in some some of the the most most rura rurall commu communi niti ties es in Paki Pakist stan an.. ApnaPCO is a business-in-a-box solution, which allows people in remote areas to share a mobile phone where there are no other alternatives – making life a little easier. Available in: Pakistan
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TeleDoctors
Are you a Telenor Pakistan subscriber and in need of expert medical advice? Simply dial 1911 to get in touch with experienced doctors who can help you with your problems – wherever you are in the country. Available in: Pakistan Mobile in Flight
By using AeroMobile secure mobile communication technology you can now call your colleagues, customers, friends and family whilst in flight from your own mobile phone. Available in: Worldwide Mobile at Sea
Most Most peopl peoplee have have expe experi rien enced ced litt little le or no conne connect ctiv ivit ity y at sea. sea. Maritime Communications Partner enables mobile phone coverage by installing and operating the ship borne radio networks, linking the vessels with public networks via satellite. Available in: Worldwide Mobile Marketing
Register your phone number with your favorite shops and services, and receive sms’s with up to the minute information on the latest events and offers. Don’t get first in line, avoid the queue altogether! Available in: Norway, Sweden Child Internet Protection
The Security Shield technology offered by Telenor protects children from accessing sites that have not previously been approved or from
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coming into contact with unsuitable people on the Internet. Children have their own login with a protected desktop controlled con trolled by parents. Available in: Norway, Sweden
Mobile Commerce Mobile commerce services of o f Telenor Telenor are as follow: Child Sexual Abuse Filter
In area areass with with limi limite ted d acce access ss to regu regula larr banki banking ng serv servic ices es and and the the Intern Internet, et, people can use use their their mobile mobile phones to transf transfer er money money – anywhere, anytime. The easy accessibility of the service will bring new opportu opportunit nities ies to DiGi DiGi subscr subscribe ibers rs with with insuf insuffic ficien ientt access access to regular banking services. Available in: Malaysia
CellBazaar - Marketplace in Your Pocket
Using CellBazaar, buyers and sellers in Bangladesh can trade basic goods from their mobile phones, bringing the benefits of information exchang exchange, e, communi community ty networ networkin king g and one-toone-to-many many tradin trading g to a previously unwired rural population. Available in: Bangladesh BillPay - Pay by Phone
BillPay is an innovative service, the first of its kind in Bangladesh. It provides an electronic bill payment pa yment service for utilities services and for other companies. Customers can pay their utility bills and other bills thro throug ugh h this this serv servic icee regar regardl dles esss of whet whether her they they own own a mobi mobile le connection or not. Available in: Bangladesh
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Research - the Future is Now Working orking with with academi academicc and indust industria riall partner partnerss worldw worldwide ide,, Telenor elenor is constan constantly tly developing, testing and demonstrating new mobile services and technology solutions. The Telenor Research & Innovation unit is an innovation hub h ub for the Telenor Group. With three locations in Norway and a satellite in Kuala Lumpur, Malaysia, Telenor R&I employ 236 people from 23 countries. Our main research areas are:
Wireless Broadband
Connected Objects
FutureSIM
Content and Services
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Profitability in Emerging
Market Segmentation and Positioning Segmentation is the process of dividing the total market for a good or service into several smaller, internally homogenous groups. Since Telenor is a customer oriented and quality driven company, it segments its market on the basis of various different dimensions. • • • • • •
Market dominated by low-end, low-ARPU customers (largely Untapped) Relatively large emerging middle class segment (Basic in Telenor Telenor Terminology) Terminology) Strong youth culture with needs similar to other markets. Private postpaid almost non-existent. Small but profitable (high ARPU) Corporate/SME segment. Women a largely untapped segment.
Market Segmentation & Product Positioning
Market Segment Youth/ Students
Today
Feature Year Estimate
25%
27%
Exis Existi tin ng Pr Produ oduct Djuice, TalkShawk
Profita fitab bilit ility y 29%
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Women
10%
20%
TalkShawk
21%
Financially Constraint
40%
23%
TalkShawk, Telenor Azadi
20%
Corporate/ SME
25%
30%
Postpaid Packages
30%
SWOT Analysis An overall evaluation of Telenor’s Strengths (S) Weakness (W) Opportunities (O) and Threats (T) are as follow: Strengths • • • • • • • • •
Network quality & design Superior customer care Financial Strength Excellent Coverage & Distribution. Commercial Launch of LDI & mobile services Contract with Siemens & Nokia Brand image of Quality PTA initiatives E-commerce usage.
Weaknesses
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27
Relatively low market share Low profit margins Negative cash flows in the initial years
Opportunities • • • • • •
Favorable Macroeconomic indicators low cellular market penetration Inefficiency & poor performance of other mobile networks Co branding e.g. Ufone with ABN AMRO AMRO Strategic Alliances & Infrastructure Sharing Facilities International Mobile Equipment Identity System
Threats • • • • • • •
Rolling Customers Privatizations & deregulations- increased competitions. Grey Traffic MNP mobile number portability Wireless Wireless technology at boom Public pay phones & calling cards usage where network is not available Propagandas attacking brand image
Telenor Group Strategy The Telenor Group has a strong track record of delivering on ambitious goals. By 2011, we aim to be one of the fastest growing mobile operators in the world, with a strong broadband position in all markets, successfully developing new services and adopting new and responsible business models. The Telenor Group has defined six strategic ambitions which it aims to achieve by 2011. These are:
To deliver increased profitable growth
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The Telenor Telenor Group aims to achieve a substantial substantial revenue increase increase in the years to come. This growth will mainly come from existing bu sinesses. We We will seek to increase our ou r core mobile and fixed voice revenues and explore broadband opportunities in our emerging markets. The Telenor Group is also investing in adjacent markets, such as basic financial services and machine-to-machine (M2M) communication worldwide.
To strengthen our performance culture across the Group In all our operating companies, we will continue the successful practice of combining a local approach with global expertise. This means that the local management teams will build a unique performance culture based on their own initiatives and in line with the Telenor governance model, Codes of Conduct, vision and values, our people policy and the way we work across borders. In terms of Health, Safety and Environment (HSE), our objective is to improve working conditions and environmental management by having clearly defined standards across our operating companies and supply chains.
To make responsible business a competitive advantage Corporate responsibility at Telenor will be part of managing risk and linked to our core business. For example, the measures we have taken to fight climate change are motivated both by our commitment to corporate responsibility and by an enlightened view of associated business benefits and opportunities: what is good for the environment is also good for business. Telenor now has clearly defined targets on CO2 emissions from its operations - not just to help save our planet, but to save energy and money. Telenor has a strong track record when it comes to sustainable business: it was ranked top performer by the Dow Jones Sustainability Indexes (DJSI) in 2007 and 2008.
To provide a superior customer experience Faced with an increasingly competitive environment, Telenor needs to differentiate itself by providing a superior customer experience. In our vision – we’re here to help – and core values (make it easy, keep promises, be inspiring, be respectful), we put customer experience at the top of the agenda throughout the Telenor Group. One of our ambitions is to reach a situation where end-users’ en d-users’ brand preference is higher than the Telenor market share for all operating companies.
To ensure best practice benchmarking across the Group
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Telenor will undertake benchmarking and best practice sharing across the Group. A global objective is to achieve a higher reduction in the average operational cost per minute than the expected decline in average price per minute. The Telenor Group aims to achieve considerable continued growth in operating cash flow from all of its operations.
To drive change and constant renewal To secure a strong industry position, we need to innovate in everything we do. To get the most out of our efforts, we have prioritized five group-wide innova tion areas: •
•
•
•
•
Broadband outside the Nordic countries. Our long-term ambition is to achieve the same position in broadband (mobile and fixed) as we have in mobile voice today. today. Connect Connected ed object objectss / M2M. M2M. The “Inte “Interne rnett of things things.” .” The Telenor elenor Group Group is working to establish itself as a global player within this rapidly growing and potentially huge market. Financial Financial services. services. The Telenor Telenor Group aims to establish establish itself as a significan significantt player in parts of the financial services industry in select under-serviced markets, establishing a platform for long-term growth. Partner innovation. The Telenor Group controls many valuable assets that can be further developed together with partners. Partner-driven innovation is a costeffective way to create many new revenue-generating services. Climat Climatee change. change. Our number number one priori priority ty is to reduce reduce CO2 emissi emissions ons.. The Telenor Group aims to be part of the climate solution by de-carbonizing business processes and reducing physical travel and transport.
Improving our performance management
The Telenor Group aims to create a stronger link between the strategy process and performance monitoring. All operating companies will implement a new and improved management model where strategic objectives and ambitions are monitored closely at both the company level and the lower department level. Challenges ahead
The global telecom industry is still growing and generating large profits. Looking ahead, we expect expect usage usage of mobile mobile and fixed fixed voice voice commun communicat ication ionss to grow grow signif significa icantl ntly y. Broadband also represents a huge growth opportunity. However, there are challenging trends, e.g. maturing markets, financial instability, pricing pressures as well as regulatory issues. issues. Still, Still, well-posi well-positioned tioned players will benefit benefit from market growth growth and increased increased efficiency, efficiency, enabling significant cash flows in the future.
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S t ra t e gi c Pl an ni n g Pr oc es s (M (Marketing Mix) According to Bearden (2001), Strategic planning requires a nice combination of strategies with products and other corporate resources. It requires the involvement of fair execution
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of strate strategic gicall ally y plan plan from from differ different ent functi functions ons like like market marketing ing,, produc productio tion, n, finance finance,, distribution and others. For strategy formulation, there is a variety of decisions which should be there before its implementation. Where right entry mode strategy is necessary, there is also a need of appropriate product-market combination. Then other marketing mix elements should be given importance because these elements can be the backbone for the business success
Telenor’s product Strategy To get the real fruits of more open market at regional level requires the satisfaction of the demands of the target market and this satisfaction can only be achieved if the product or service offered in the market is suitable and acceptable for its purpose and this can be obtained by adopting a regional product strategy suitable for company and the market as well. Telenor’s study indicates that it is acting quite on this concept that, in order to be more competitive in the world market, firms should shift their emphasis from local customized products to globally standardized products that are advanced, functional, reliable and low priced. But here low priced strategy be to compromise and later on due to its quality, Telenor’s low price strategy takes shift from low to high but competitive. Buzzel (1968) argued that product standardization has different benefits (a) economies of scale, (b) faster accumulation of learning experience and (c) reduced costs of design modification. In the regional open market, Telenor is taking the fruit of this by adopting the product standardization but the situation can be different in other markets. The company used a multi domestic strategy to gain competitive advantage in its target markets. A key factor in the strategy is the encouragement of senior managers to be entrepreneurial in responding to local customer needs, product quality and customer services. Telenor’s decision to standardize or adapt its products is based on cost/benefit analysis of what they believe the implications of adaptation and standardization are for profitability and market share. According to Doole (2000) in normal circumstances, the cost of adaptation would be expected to be greater than the cost of successful standardization. Telenor believes in long term advantages and not in satisfaction of immediate demand, that’s why they continue the exposure to the standardized products and services which leads them to greater market share in the longer term. Our research shows that there are three factors which enforced the company towards more standardized strategy and these are illustrated in figure below. •
Homogeneity of markets
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Increase in number of regionalizing firms Identifiable international consumer segments
Summar Summarizi izing ng it, region regionali alizat zation ion forced forced the company company to rethin rethink k about about its strateg strategies ies towards product, to be more competitive in the open market.
Telenor’s Price Strategy Pricing across the borders is comparatively difficult from other decisions though it is believ believed ed that that pricin pricing g is the most most flexib flexible le and contro controlla llable ble market marketing ing mix element element.. Companies operating in different markets experience extraordinarily difference across the borders. This can be due to the exchange rate difference and other barriers. But in our study, study, this matter is not much sensitive because of psychic psychic distance distance factor factor. Cultural Cultural environment and a geographical neighborhood influence the pricing policy of Telenor. Telenor. On the other hand, being a non member of European Union, it can be totally opposite of the general strategies adopted by the companies located in European Union. Telenor’s pricing policy is influenced by different factors among them five are much important and they are indicated below: • • • • •
Market survival Sales growth Market position Maximization of Profits Maintenance of product’s quality
Though lower price is considered a suitable policy but in case of Telenor, it is affected due to regi regiona onali lizat zatio ion n but not not so much much but but compe competi titi tion on fact factor or is given given spec specia iall consideration before development of price strategy. That’s why Telenor has high price strategy due to high quality products and services but at certain level penetration price strategy is adopted to stimulate sales growth. Here, at this aspect if we talk about the standardization or adaptation strategy of pricing, Telenor follows adaptation policy as well because it allows each local subsidiary or partner to set a price which is considered to be the most suitable for local conditions. On the other hand, lack of control can be the weakness of this strategy and it may require some cost for management.
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Telenor’s Place Strategy To manage the foreign channels of distribution is a key area in a company’s efforts to be more competitive in the market. According to (Doole, 2001), as products become more standardized across the world, the ability to compete on customer becomes more vital. Channels of distributions developed by Telenor follow the cultural traditions of the target market because it is important to understand and manage cultural differences amongst different markets and Telenor has deep analysis of the markets before developing its positioning strategy because cultural differences add to control difficulties. In regional marketing, Telenor is taking advantages of his heavy infrastructural products and its financial worth. In our study, we found that company is adopting those strategies which are not used by the others commonly. To make a huge as well as direct investment in the form of acquisitions and wholly owned subsidiaries is high risky but more profitable decision for Telenor. Open borders give a number of alternatives for position the products and Telenor is using different distribution channels which vary from market to market and country to country. As Telenor is involved in telecommunication business so usually it doesn’t involve in physical distribution but it has the partnership strategy and on the local level, shops and customer care centers are used as place strategy. strategy.
Telenor’s Promotional Strategy It is quite obvious from the business environment, that there is a rapid increase in competition competition and markets markets became mature at the regional level. These factors demand the companies to offer high quality products and services at competitive price level through suitable distribution channel. In addition to its traditional role of promoting products and services, international marketing communications is increasingly used to facilitate the company with an important way of differentiation in open internal market. According to our findings, there are a variety of promotional tools which are used by Telenor to inform and motivate its valuable consumers in the regional market. The company developed a standardized promotional package which is sufficiently flexible with the different ways in different cultures and norms. Besides it, that package is also flexible in such a way, in which subsidiaries can develop their own marketing positioning and related promotional strategy. strategy. During our study of Telenor as a regional company, we found that the company builds up its promotional strategies with two basic issues. First, the company should have the clear
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picture picture of the objectives objectives for regional regional marketing communication communication strategy and, second is, how the company can combine the different promotional tools and activities for the higher higher level level of cost cost effect effective ivenes ness. s. On the other other hand Telenor’ elenor’ss regiona regionall market marketing ing communication strategy can be adapted because the market structures and distribution channels can be different from market to market and country to country coun try.. However, mostly these factors are not those, which can said to be crucial for the company like Telenor. Telenor. Summarizing Summarizing it, regionaliza regionalization tion factor has influenced influenced the Telenor’s elenor’s promotional promotional part of marketing mix but in all the way it has positive edge for the company and its business throughout the region.
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Competition As at 30 June 2008, Telenor Pakistan had a market share of approximately 20%. In addition to Telenor Pakistan, there are five other mobile operators in Pakistan: Mobilink, Ufone, Warid, Zong (formerly Paktel) and Instaphone. According to data provided by the Pakistan Telecommunication Authority (the PTA), as at 30 June 2008 Mobilink was the largest cellular mobile operator in Pakistan with a market share of approximately 37%, Ufon Ufonee had had a mark market et shar sharee of appr approx oxim imat ately ely 20%, 20%, Warid arid had a mark market et shar sharee of approximately 17%, Zong had a market share of approximately 4%, and Instaphone had a market share of approximately 0.4%.
Major Competitor Parameters
Mobilink
Telenor
Product Life Cycle
Maturity
Growth
Market share %
37%
20%
Coverage
900 cities 1100 cities Jazz Octane, Mobilink TalkShawk, Telenor
Product Portfolio Indigo, First,
LadiesAzadi, Djuice
Customer Base
17.2 million
3.6 million
Marketing Operations
Excellent
Good
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Conclusion Telenor elenor is the leadin leading g telecom telecommuni municat cation ion company company,, which which are the most most advanced advanced telecommunica telecommunication tion markets in the world. The Telenor Group is committed committed to engage in the local communities where it operates. In Pakistan telenor launched its operations in March 2005 as the single largest direct European investment in Pakistan. The company has crossed many milestones and grown in a number of directions, making Telenor Pakistan a leading telecom operator of the country. They are providing a service in almost 2500 cites of Pakistan and it is most growing telecom industry in this country. country. In short it start its business when there is a very high competition in market and take very little time to grow in the market and now it has almost 20% market share in Pakistan and standing at second place along with Ufone who also has 20%. They are now providing different services to its customers at a high quality which helps them to progress rapidly in country and in features their objectives shows that in next few years the will become the market leaders in Pakistan.
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Suggestion: Key Issues: •
Issue 1: Maintain network quality
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Issue 2: Low market penetration
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Issue 3: Rolling Customers
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Issue 4: Untapped market segments- Women Women
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Issue 5: Mobile number portability
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Issue 6: Documentation to avoid mischievous
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Issue 7: Should be low price
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Issue 8: Maintain Customer Relationship Management
Strategic Direction •
Building an organization with competency, competency, capabilities and resource strengths
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Developing Technical Know How in Employees
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Developing budgets to steer ample resources into critical value chain activities
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Creating strategy supportive policies and procedures
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•
Instituting best practices and a commitment to continuous improvement
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Installing support systems and Value added Services
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Maintain low cost
References: Principles of Marketing
by
Philip Kotler, Kotler,
Telenor Broadcas Broadcastt Report - 2008-09 2008-09 as on 11th 11th of February 2009 Interim Report January–December 2008 Corporate Responsibility Report 2008 Telenor Cantt Franchises www. Telenor.com.pk www.researchandmarkets.com/reports www.telenor.com.pk
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