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ZONG BACKGROUND:

Zong is China Mobile's brand in Pakistan. China Mobile Pakistan (CMPak) is a 100%

subsidiary of China Mobile. China Mobile's first overseas operation came about when it

acquired a license from Millicom to operate a GSM network in Pakistan.

Paktel was the first ever company granted license to carry out cellular phone services in

Pakistan. However after the launch and rapid success of its competition in 1998, it lost

market share. In 2003, Millicom Corporation bought Paktel. In January 2007 Millicom

sold Paktel to China Mobile.

Paktel was re-launched in April 2008 with the brand name Zong. Zong is the first

International brand of China Mobile. It is meant to empower and liberate the people of

Pakistan in every nook and corner of the country. CMPak's edge comes from the

experience and expertise of running the world's largest telecom service and the

commitment they make to setting quality and customer relations standard

PARENT COMPANY: CHINA MOBILE COMMUNICATIONS

CORPORATION:

China Mobile is the world's largest telecom operator. Having a customer base of over 300

million customers, its network routes 700 million text messages every day and handles

250 million calls every hour.

China Mobile is perhaps the only cellular network that provides uninterrupted, reliable

coverage through tunnels, on highways, inside sky scrapper elevators as well on top of

Mount Everest.

One of the unique features of China Mobile servicing excellence is to customize its

products, services and tariffs to suit the individual needs of its huge subscriber base.

There are hundreds of payment/tariff options to choose from according to one's usage

pattern, budgetary limitations and nature of use.

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China Mobile's first overseas subsidiary, China Mobile Pakistan has the license to offer

and operate voice, data and all value added services in the entire country. One of the

fastest growing cellular markets in the world, Pakistan is a key region that is likely to

offer expansion opportunities as well the chance to make a difference in the lives of a

growing clientele that is demanding and understands and appreciates better quality and

service standards.

China Mobile has been playing a leading role in the development of the mobile

communications industry in China and holds an important position in the international

arena as well. After over ten years of efforts, China Mobile has established a

comprehensive network with large coverage, high quality, rich variety of businesses and

first-class customer services. It ranks the first in the world in terms of the network scale

and the customer base. The total number of customers had exceeded 240 million.

China Mobile has provided GSM roaming services with over 271 operators in 206

countries and regions and GPRS roaming services with 93 operators in 101 countries and

regions in the world. Its mobile short messages can be sent to 214 operators in 106

countries and regions and multimedia messages to 21 operators in 6 countries and

regions.

China Mobile has successfully attracted investment from the international capital market

with its sound performance and great development potential. Being included in the

Fortune Top 500 for 5 consecutive yeas, China Mobile's latest ranking is No.224.It also

ranks the 4th and 2nd in the Top 500 Chinese Enterprises in terms of its overall strength

and service provision respectively by the China Enterprise Confederation and China

Enterprise Directors Association in 2005.The listed company of China Mobile has been

the only Chinese company among the Forbes Top 400 World's Best Big Companies for 3

consecutive years.

China Mobile is not only a profitable company with robust financial performance and

stable cash flow, but also the one with growing potentials and prospects. Looking

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forward, China Mobile defines its strategic goal of "becoming a worldwide leader in the

telecommunications world and achieving leapfrog evolution from excellence to

preeminence". To this end, China Mobile will adhere to its core value proposition of

"Responsibility Makes Perfection" and spare no effort to improve its competitiveness by

implementing the concept of scientific development. with its well-built operation system,

outstanding organization structure and fully-trained personnel, China Mobile aims at

building a framework of "One CM" featuring mobile and information expertise and best

service quality.

ZONG -CM PAK

China Mobile Pakistan (CMPak) is a 100% subsidiary of China Mobile. The pioneering

overseas set up of China Mobile came through acquisition of a license from Millicom to

operate a GSM network in Pakistan.

So far CMPak has invested a huge dollar amount in the telecom sector in Pakistan .With

ambitious plans to cater to the fastest growing Pakistani market and to win over the ever

demanding Pakistani customer, it aim to offer unprecedented coverage, voice and data

services as well as a wide range of tariff options to choose from.

CMPak's edge comes from the experience and expertise of running the world's largest

telecom service and the commitment they make to setting quality and customer relations

standards.

CMPak is geared to offer neatly packaged VAS products that will benefit the individuals,

corporate as well as small businesses. Led by a team of professionals from the field of

cellular communication, CMPak is determined to make its mark in the Pakistani market

and to change the way people communicate.

ZONG is the first International brand of China Mobile being launched in Pakistan. It is

meant to empower and liberate the people of Pakistan in every nook and corner of the

country. It aims to become a part of their hearts, their minds and bring about a change in

their lives that every one desired but few thought would be possible.

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The core essence of ZONG is to allow people to communicate at will. Without worrying

about tariffs, network coverage, capacity issues or congestion. ZONG will be supported

by ground breaking communications, trend setting customer service and an unmatched

product offering which will redefine rules of the game and establish ZONG as a serious

contender for the number one spot.

ZONG offers its customers with entertaining & innovative value added services and will

empower them by giving a wide variety of products, services & content to choose from.

MISSION STATEMENT:

“To be the leading mobile operator of Pakistan by continuously innovating

and offering exceptional quality services; to be a good corporate citizen

and envoy of friendship between China and Pakistan.”

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ZONG VISION:

Zong’s vision is to make communication exciting and become the leading

mobile operator in Pakistan.

Vision components:

Conduct with integrity and live company principles.

Deliver continuous innovation and exceptional quality services

Foster an internal environment of innovation, collaboration and trust.

In doing so, CMPak aims to become customer’s partner of choice, industry’s employer of

choice, and shareholders investment of choice.

ZONG VALUES:

Core Value:

Responsibility makes Perfection

Five Key Values:

Trust Worthiness

Respect

Responsibility

Communicate Openly

Team Work

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Guiding principles of Zongerz

The Employees (Zongerz) of CMPak are guided by the following principles. They

describe the company as they want it to be. They believe that their decisions and actions

should to demonstrate these values. Zongerz believe that putting the values into practice

creates long term benefits for shareholders, customers, employees, suppliers and the

communities they serve.

Employees take responsibility for quality of a product.

Employees deliver customer satisfaction.

Employees act with integrity in all we do.

Employees value each other.

With responsibility comes perfection.

Employees regard our suppliers as essential team members.

Zong environment:

CMPak is a dynamic organization with an equally empowering culture that allows people

to make the most of their skills, personality and career. As a company it delivers

solutions that drive business value, create social value and improve the lives of every

customer (internal & external).

CMPak is a special place to work. Employees at CMPak gain help in developing their

capabilities and are recognized and competitively rewarded for their performance.

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All employees at CMPak have a right to offer input and be involved in helping their team

grow. Creating a work environment in which employees can improve their minds,

continuously learn, gain professional growth and feel inspired by similarly motivated

individuals is fundamental at CMPak. In turn, we expect that employees share CMPak's

vision for company, team and individual growth and that employees will strive to make a

difference every day. This exemplifies CMPak's commitment to people.

BUSINESS PHILOSOPHY:

Business Philosophy is based on:

Solid commitment to growth.

Consumer convenience.

No compromise on quality.

Connectivity with reliability.

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BRAND IDENTITY:

ZonG is similar to the “Zhong” of Zhongguo (China) in pronunciation, “Z” descends

from the initials of “正德厚生” (“Zheng De Hou Sheng” means correcting morality and

nourishing people) and “臻于至善 ” (“Zhen Yu Zhi Shan” means always pursuing

perfection) in the values of the master brand China Mobile. At the same time ZonG

inherits the brand color of China Mobile: Blue, it symbolizes ZonG has adopted the

essences of the master brand.

The hieroglyph “O” illustrates that when we part our lips into the sharp of “O”, we can

scatter our voice into every corner of the world. “O” represents the gesture or the

movement of lips when people are saying “OK” meaning that this brand is accepted and

approved by customers as well. The color of salmon pink implies the accessible and

energetic international image of China Mobile.

The lowercase “n” shows the new brand is in close proximity with customers. The “n” is

the initial of the Chinese greeting “您好！/你好！” (Nin Hao/Ni Hao, that means hello)

The “n” is more representative of “need”, Zong is conscious of people’s needs and

regard satisfying them as responsibility

The capitalized “G” proclaims China Mobile’s ambition and determination towards

globalization.

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Product Markets:

Product types, varieties, and brands:

Zong offer the following type of packages: Prepaid Packages: ZONG 45, Break Time Offer [Friday Noon to 4 pm], Free Package, ZONG 65, 12 Aanay Package, 50 Paisa/Call (8 Aanay), ZONG Super Free Number, Aik Second Package, Late Night Offer.Postpaid packages: SMS Bundle, Gprs packages, MNP.Zong is versatile in a sense that is targeting almost each and each and every class of the customers.Zong mobile: Zong is the first company who introduced mobile with the brand name of ZONG. It is available at very cheap price. Anyone can get it paying Rs. 1900 with Rs 1900 balance. Large number of people appreciates and gets the mobile immediately.Zong USB:

Sales volume and trends:

As per latest stats issued by Pakistan Telecommunication Authority, cellular subscribers in Pakistan are about to hit 92 million mark. There are total of 91,978,760 were reported as of April 2009.Month of April showed an upward trend with 0.6 percent growth – that’s second highest since November 2008.Zong stood first by capturing most customers in April 2009, while all cellular companies collectively added 536,419 customers.

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Marketing Programs

As the customers are spread all over the country, the broadcast medium is used to

communicate the value of the product. Local medium like sign boards, billboards, posters

and wall choking is used to communicate the value. Local area franchise work in

different areas and have the people who can communicate in local language.

STRATEGIC MANAGEMENT AT ZONG

After CMCC purchased Paktel, the corporation planned to increase investment in the

local telecommunications infrastructure, promote local telecommunications, and improve

employment levels, bringing Pakistani people real benefits. This acquisition has achieved

a win-win situation between the two countries, and contributed to enhancing the

Pakistani-Chinese friendship, and deepening their strategic partnership.

The management process at Zong is strategic because it involves preparing the best way

to respond to the circumstances of the organization's environment, whether or not its

circumstances are known in advance; response to dynamic and even hostile

environments.. 

Industry experts believe that acquisition in Pakistan is a significant breakthrough for

CMCC of its “Going Global” strategy. Strategic orientation guides the company’s

overall direction.

Zong believes that decisions have a long lasting impact and implications. Decisions

directly impact mission of the organization. The decision moves the Organization into a

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New Domain or Direction. It Involves Commitment of Key Resources. Most important of

all it involves and affects people. Its effect however may not be visible in short run.

At Zong strategic management is directly linked with the core decision making

Parent company – CMCC after extensive coordination with chiefs identifies and

defines the broad targets to be achieved by Zong CM Pak.

Zong Senior management which includes all the chiefs then further defines the

targets as per the vision to their respective departments.

Each department follows its own methodology to achieve defined targets and

employee personal inputs are always valued.

The formulated strategy is communicated by Department Heads in the form of

department objectives.

Each department defines its own mission with senior management’s involvement

and work accordingly to achieve its goals.

To reinforce implementation of strategy weekly sessions are held in which senior

management meets and shares their updates on key targets to be achieved.

Strategy Focus ON:

Cost Leadership

Expansion of network.

Acquisition of other Telecom Businesses in Pakistan.

SEGMENTTATION

HUMAN RESOURCES DEPARTMENT

Mission:

To facilitate Organizational growth through innovative & effective HR and people

practices.

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Functions:

Organizational Development

Recruitment

Compensation and Benefits

Operations

ENGINEERING DEPARTMENT

Mission

To operate and maintain the GSM network, in minimum cost, maximum availability and

up to the defined quality levels. Building quality network nationwide insight with

existing & future capacity prospectus nationwide with minimum cost and accomplished

in the targeted time.

Functions:

O&M

Rollout

NP&S

FINANCE DEPARTMENT

ZONG has strong financial position since its inception. China has been invested $1500

million in Pakistan for Zong and wants to invest more. The improvement in net earnings

resulting from strong internal sales growth from both postpaid, prepaid segments.

Functions:

Payable

Treasury

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Financial Accounting

Taxation

Fixed Assets

Project Accounting

Sun System (Accounting Software) Administration

ADMINISTRATION DEPARTMENT

Mission

To anticipate the needs of all departments and their employees, to address their demands

for creating better safe and secure friendly working environment, to accept challenges,

achieving goals thus portraying an outstanding  image of the company and ultimately to

be the No. 1 Admin. operation within CMCC by any measure.

REGULATORY & CORPORATE AFFAIRS DEPARTMENT

Mission

Maintain the most affable relations with the government to ensure support and facilitation

in the technical installations and the commercial activities of the organization

LEGAL DEPARTMENT

Mission

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To pre-empt, identify and assess potential legal matters, to ensure smooth sailing of the

company, thus provide legal service to safeguard the interest(s) of the organization, and

welfare of its stakeholders.

INFORMATION TECHNOLOGY DEPARTMENT

Mission

To provide lowest cost and highest speed systems through Automation, centralization and

out-sourcing.

Functions

IT Projects & Planning

IT Infrastructure

IT Systems & Database Management

IT Operations

MARKETING DEPARTMENT

Mission

ZONG Marketing Department will become the best Marketing Department of the

industry in terms of adding value to their brand name, improving the image of the

organization, increase in sales, with quality of people and team spirit to lead the

organizations towards the achievement of short term and long term goals.

SALES & DISTRIBUTION DEPARTMENT

Mission

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To maximize the number of revenue-generating subscribers by efficiently planning &

executing the policies & operations related to product visibility & availability.

DISTRIBUTION

Zong purchases equipment from four companies ZTE, Ericson, Alcetle, and Hawaii. These are the venders and operator of Zong. Zong distributors are franchises, customer care service centers and different outlets. Zong has 22 CCSC and 100000 different outlets in Pakistan.

CUSTOMER SERVICES DEPARTMENT

Mission

To realize the perceived value of the customers and build higher expectations through

excellence in service.

Customer service centers“The beacon of ZONG’s impression and torch bearers of a new era in customer

interaction, taking customer service into a portal of customer excitement. These are the

doors to ZONG’s first and foremost realization of its promise to excite customers with a

new trend in service. Setting the tone and ambiance which is second only to your home,

these are ZONG’s arms across the country to welcome everyone to experience the

comfort when a true promise is fulfilled.”

REGIONAL BUSINESS UNITS:

North

South

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Central I

Central II

SWOT ANALYSIS OF ZONG:

Internal analysis:

Strengths

Lowest rates Nation Wide

Zong provide lowest rates as compare to other telecom industry it’s a great thing

which is only provided by zong.

Strong image of Parent Company

Zong have a strong image of their parent company china mobile. That is a plus point

for zong.

Network portability

Over 500,000 people have been switched to Zong from other networks.

Zong mobile

Zong has come up with another interesting promotion…. you get a phone, almost free

but with a year’s payment in advance.

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Resources, Assets and People

Being a multinational company Zong has huge resources in terms of capital. It

has billions of capital to invest in various projects. Its offices are luxuriously

equipped with every facility.

Zong while choosing people for jobs follow the strategy of “choosing the best

among all” therefore majority of its staff people are highly qualified from

renowned universities of Pakistan. A certain persons are foreign qualified.

So far CMPak has invested more than US$ 700 million in the telecom sector

in Pakistan and an additional US$ 800 million will be invested till the end of

year 2008.

Location and Geographical Coverage

Zong is also covering the all cities of Pakistan and in 2008 Zong completed its

record sites 1000 in Pakistan its great achievement.

Zong is covering the northern areas of Pakistan rapidly.

Weaknesses

Bad image

Bad image of associate with Paktel. And still now having old staff of Paktel.

Brand standing

Zong have Week brand standing as compared to other telecom companies because

they are new in the market.

Bad MIS

Zong does not have the proper lists of its customers. It has the list but this list is not

authentic which is increasing the unauthorized use of its sim specially pre pay. Zong

have to take serious steps to properly list its customers to ensure that there is no

misuse.

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External analysis:

Opportunities

Expand Globally

ZONG can expand the globally and can develop it strategy in other countries.

Acquire / merger

As warid is going in loss and in the condition of liquidation its big opportunity for

Zong to acquire warid telecom.

New product development:

Zong can introduce new products such as dish TV.

Opportunity in northern areas

Zong can have a clear edge over the competition in the Northern Areas especially, as

China Mobile has huge experience of network operation in similar high mountainous

areas in China itself.

Pak China Border

Zong can cover the border of China, with the Karakoram highway (old Silk Route)

and can play a vital role in freight transportation.

Threats:Threat of new entrance.

Bargaining power of buyers.

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Bargaining power of suppliers.

Threat of substitute product

Threat of New Entry

As government of Pakistan is showing liberalism in case of

telecommunication sector and opened its policies to award new licensees to

new mobile service providers so threat of new entry is high.

As for this business companies need a well established distributions and

franchises network so threat of new entrant is high in this case.

Bargaining Power of Buyers

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Power of buyer is high in telecommunication sector. There are six market

players and players are offering different packages at different prices and a

situation of price war is running. Buyers have a power to buy any package

which is suited to them.

Cost of switching from one company package to other company package is

low. Hence, power of buyers is high.

Bargaining Power of Suppliers

The power of suppliers is low in case of telecommunication sector.

But the fact is that numbers of suppliers are few in the market but they are

competing in the market to make agreements with mobile service providers.

Threat of Substitute Products

Government also gave so many land lines and wireless local loop licenses to

different companies like PTCL wireless local loop, GO CDMA, WORLD

CALL etc. these services in future will be like mobile phone services like

they are planning to offer services a lot but currently they are offering SMS

and CLI services to their customers.

PEST ANALYSIS:In order to survive and remain profitable in

today’s competitive marketplace, Zong need to

be able to react and adapt to changes in the

external environment and ideally be proactive

in impacting these forces. External

environment factors can be classified into five

general categories: competitive, social/cultural,

economic, political, and technological.

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POLITICAL FACTORS

Political Instability:

Pakistan is facing political instability causing danger for the telecom industry. But the

political factor does not effect on Zong so high because Zong related from china and

relationship of china and Pakistan is very strong.

Deregulation:

The telecom sector of Pakistan has successfully liberalized in an efficient, transparent and

fastest deregulation of telecom in the region. The Government of Pakistan gave the status

of Industry to Pakistan Telecommunication Sector.

Changes in Tax Laws:

Tax rates have been increased day by day government tax rate of call is 15% and

recently government increased it by 6 % more.

ECONOMIC FACTORS:

Gross Domestic Product:

Telecom sector of Pakistan has a share of almost 2 percent in National GDP.

Average Revenue per User (ARPU):

The average revenue per user is falling. It does not affect value able on Zong. Because

Zong started in same condition.

Decline in Money Value:

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The decline in Rupee value against the US Dollar, the decrease in the interconnect

charges and lower priced tariffs have resulted in an overall decrease of ARPU in US

Dollar terms.

Outflow of Capital:

The ongoing economic turmoil along with the worsening of security conditions in

Pakistan has caused an increased outflow of capital from the country.

TECHNOLOGICAL FACTORS:

Technological Development:

Companies are investing in their infrastructure to not only expand but also to upgrade

their existing structure. As the competition is strong Zong is focusing on its value added

services.

Technological Advancement:

Currently all companies are providing Multi-media Messaging Services (MMS), General

Packet Radio Service (GPRS), Virtual Private Network (VPN), Pocket Stocks,

Conference Calling, Wallpapers Animated pictures Polyphonic ring tones (WAP), and

Voice Mail at low price.

Technological Trends:

The well-recognized technology trends that are influencing the evolution of the network

indicate that:

The cost of a call is becoming even more insensitive to the distance;

The modularity of the network is increasing;

The networking is shifting from circuit-switched to packet-routing;

The voice communication is now independent of the network;

The geographic boundaries are irrelevant for emerging technology;

The intelligence and function are moving away from the central office.

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In these conditions competition is very strong among competitors. Zong is improving

itself in technology.

COMPETITIVE FACTORS

Major competitors of ZONG include

Mobilink

Ufone

Telenor

Warid

COMPETITORS

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Cellular Service Provider

Market Share

Mobilink 31.6%Ufone 21.5%Telenor 21.6%Warid 18.8%Zong 6.1%

Zong customers

Zong launched its service all over Pakistan in April 2008. Earlier on, we assumed that they inherited ordinary network which was under consistent up gradation since China Mobile acquired Paktel, but even after 15 months quality of Zong’s network has not reached up to the standard.

We know that Paktel’s GSM network was rolled out by ZTE, however, latter contracts were granted to Ericsson and Alcatel-Lucent. So when we talk about technologies, Zong has the benefit of experiencing both European and Chinese vendors.

It is said that complaints, largely coming from central and south regions are more of maintenance flaws instead of network equipment constraints. It is believed (by network

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experts) that network engineers (from RF) are responsible for significant number of downtime of cell sites, lack of statistical data keeping, planning, and optimization of network and its utilization.

Voice quality, network congestion, signals issues or not signals at all, and similar concerns are what bothering Zong customers despite the best tariff available.

FUTURE STRATEGY:

More transparency and increased flow of information b/w CMCC and Zong

Acquisition of other cellular companies in Pakistan.

Market leadership by utilizing strengths of acquired companies

CONCLUSION:

Since CMCC takeover i.e. within one year only, Zong has achieved great milestones. Some of the achievements are as follows:

Growth in the subscriber base from 2 million to 6 million.

Many products like BYN Franchise, Super Free Number, BYN Home Delivery, BTO Media Campaign, Yaari Load, Unlimited Free Numbers, 12 Aana package, 8 Aana Package, SMS bundle, Handset offer etc were launched.

The industry record was broken by setting up over 3000 BTS Towers in a year as Phase one regime.

Many mini exchanges were installed for capacity building; network has a capacity to now support 2 crore users

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Recommendation

Zong Telecom should be increasing their network coverage and foot prints in

every corner of the country to capture the market.

Zong should adopt the strategies of market penetration market development and related diversification, but the most effective strategy would be market penetration.

In the SBU of Zong mobile Zong should use the strategy of hold and maintain.

Zong should hire the skilled management.

Zong should not waste their opportunities and get more help as possible.

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