Etisalat New market entry & Analysis of Pakistan Industry by Ehab Abusabha

Executive Summary..................................................................................................................1

Company Analysis................................................................................................................... 3

a.      Defining the business................................................................................................... 3

i. Who are the customers?................................................................................................ 3

ii. What needs are being satisfied by the company’s goods or services?........................ 3

iii. What are the company’s core competencies?............................................................. 4

b.      Identifying the company’s competitive advantages.................................................... 5

i. What are the company’s competitive advantages built upon?...................................... 5

c.      Size and locations currently operating......................................................................... 6

d.      Competitive strengths and weaknesses...................................................................... 6

e.      Need for global expansion at this time......................................................................... 8

Industry Analysis...................................................................................................................... 9

a.      Analysis of Pakistan Industry.........................................................................................

i. Globalization drivers for the industry................................................................................

Target Country Environment Analysis................................................................................... 11

a.      Demographic characteristics..................................................................................... 11

b.      Target location description......................................................................................... 12

c.      Cultural characteristics.............................................................................................. 13

d.      Workforce characteristics.......................................................................................... 13

e.      Relevant trade and investment policies and laws...................................................... 15

f.       Politics and laws that may affect entry...................................................................... 15

g.      Market transition and financial market issues........................................................... 15

Target market analysis.......................................................................................................... 16

a.      Description of customers and characteristics........................................................... 16

b.      Estimation of market size.......................................................................................... 17

c.      Local competition analysis......................................................................................... 18

d.      Estimated market share and sales expected............................................................ 20

Strategic alternatives............................................................................................................. 25

a.      Market entry Alternatives...............................................................................................

b.      Marketing Alternatives...................................................................................................

c.      Human Resource Alternatives.......................................................................................

Implementation of strategic plan............................................................................................ 28

Appendices............................................................................................................................ 30

Bibliography........................................................................................................................... 31

I.          Executive summery

This report was commissioned to examine the international strategic plan of Emirates Telecommunication Corporation, Etisalat, for entering the Pakistani telecom market.

The research draws attention on the fact that after about thirty years of efficient monopoly of the sole telecommunication service provider in the local market, Etisalat decides to go internationally mainly because of saturation in the local market and fear of upcoming competition- which does not exist until this moment. The international expansion of Etisalat had started shortly before its monopoly came to an end in mid-2004. Currently, it is operating in Saudi Arabia and Sudan.

Etisalat provides more than 4.0 million subscribers of the UAE total population of about 4.0 million with state-of-the-art technology through all its services, which basically consist of fixed-line, mobile-line, internet and cable and satellite services.

To evaluate Etisalat’s performance and business strategies, a SWOT analysis was conducted here. It indicates that Etisalat possesses a healthy position and a substantial strength to balance its weaknesses and expand further.

The report also discusses the general globalisation drivers for the telecom industry.

A thorough analysis of the target country, Pakistan, environment shows growing macro and microeconomic indicators; a very big telecom market potential with total teledensity at only 10.2 percent of the total population (152.53 million);  a very strategic geographic location for further  regional expansion for Etisalat; well trained and cost effective human resources; comprehensive trade and investment policies. Pakistani telecom market had been dominated by the monopoly of the state-owned Pakistan Telecommunication Company Ltd. (PTCL) until it was de-regulated in 2003-04 and opened up for Foreign Direct Investment (FDI) which is expected to reach $ 5-8 billion in five years. PTCL is currently1 owned up to 88 percent by the government, and is offering 26 percent equity stake to foreign investors.

To further analyse the Pakistani telecom market, Porter’s Five Forces Analysis was conducted. It indicates a high growth potential assisted by high domestic demand and increasing competition which first started less than two years ago. Although, Pakistan’s international political situation is showing impressive improvement, the internal violence is still threatening the economy.

After studying all the different aspects associated with international strategic planning, it is recommended that:

·         Etisalat enter the telecom market through Equity Alliance with PTCL since PTCL is offering 26% stake of its shares to foreign investors,

·         Etisalat‘s management, operation and control are structured by region depending on the large size and provincial structure of the Pakistan territories.

·         The company goes for the Niche market and place itself as one of the best in the Industry.

·         Etisalat try to be the market leader in Pakistan market considering the huge capital investment and Long-term objectives.

·         Etisalat invest heavily on the infrastructure, human resources and marketing 

·         Etisalat increase demand but decrease costs and offer competitive prices

·         Etisalat adapt a multi-domestic strategy due to the multitude of culture of Pakistan

II. Company Analysis

In 1976, five years after the Trucial States became the United Arab Emirates - a Federation of seven emirates - Emirates Telecommunication Corporation came into being.

Emirates Telecommunication Corporation- Etisalat has been the official telecommunication service provider of the United Arab Emirates (UAE) for about 30 years. It had been a monopoly until med-2004, when the government decided to open the market up for local and foreign competition. At that time, Etisalat was already tapping the international market for expansion.

The Corporation has succeeded in transforming the UAE into one of the most advanced countries in the world, in the field of telecommunications by providing advanced, efficient and reliable services.

At the end of 2003, Etisala’s paid up capital stood at AED 4,000 million, market capital at 48,676 million and total revenues about 9,226 million.

Etisalat currently has 9,400 employees distributed in about 56 branches all over the UAE, according to Etisalat Company Profile at Zawya.com Company Profile, available: (http://www.zawya.com/cm/profile.cfm?companyid=334652&ric=ETEL.AD), accessed, June 2005.

a.         Defining the business

i. Who are the customers?

Etisalat is targeting Business users, Corporate & home users in the telecommunication and IT sectors.

ii. What needs are being satisfied by the company’s goods or services?

As Etisalat provide Telecommunications Services to UAE and other regions, it fulfils the telecommunication needs of the local market, by providing services in below sectors:

·         Cable & Satellite Services

o    Cable TV System Operators

o    Direct Broadcast Services Providers

o    Satellite System Operators

·         Data Services

o    Data Network Operators

o    Internet & Online Services Providers

o    Managed Network Services

·         Fixed-line Voice Services Providers

o    Local Exchange Carriers

o    Long-distance Carriers

o    Telecommunications Resellers

·         Messaging Services Providers

·         Telecommunications Infrastructure Development

·         Teleconferencing Services Providers

·         Telemetry & Telematics Services Providers

·         Wireless Communications Services

o    Wireless Network Operators

o    Wireless Telecommunications Resellers

iii. What are the company’s core competencies?

The Etisalat had a monopoly on the UAE market until a federal decree was passed allowing for competition and is 60% owned by the UAE government and 40% by the UAE nationals. As per the "Zawya" company profile, the company had 1.16 million fixed-line subscribers and 3.31 million mobile users at the end of June 2004 compared to 33,000 fixed telephone lines and 1,600 telex lines back in 1976.  This is in relation to about 4.0 million total population of the UAE (Economist Intelligence Unit, 2004, p. 3) UAE Country Profile)

Etisalat network of Satellite, Earth and Coastal stations; landlines covering the length and breadth of the UAE; submarine cable systems, cable ships, optic fibre cables and international projects are all utilized to service the communication needs of its local and international customers.

The group had a monopoly on the UAE market until a federal decree was passed allowing for competition and is 60% owned by the UAE government and 40% by the UAE nationals.

Etisalat had by far invested towards the best telecommunication infrastructure in the region.

Cooperate are widely geographically speeded in the region, which allow a good access to its services and customers broadcasting.

b.         Identifying the company’s competitive advantages

 

i. What are the company’s competitive advantages built upon?

Businesses use a wide range of state-of-the art services offered by Etisalat divided into nine businesses divisions (eCompany, Ebtikar, Emirates Data Clearing House, Emirates Internet Exchange, Etisalat Academy, Etisalat college of Engineering, The Contact Centre, UAE LAB, and UAE Network Information Centre).

As Etisalat was the only service provider for the following services: Telephone, Mobile, Paging, Internet, eCommerce, Ebtikar, Data Services. However there is no competitive advantage with other competitors of producing such services.

However, Etisalat kept the high level of standards and quality provided to customers domestically and promising to give it internationally.

Besides a comprehensive range of readily available standard telephones and feature phones, Etisalat offers businesses sophisticated key phone and PABX systems incorporating the very best in telecommunications technology to meet their communication needs. They also offer several other products and services:

Etisalat’s Calling (ECC) and Prepaid Cards (PPC) enable customers not only to call from the UAE to a host of countries worldwide but also make calls from these countries to the UAE while travelling. ECC Cardholders can make their calls and have the call charges billed to their designated business, mobile or home phone while PPC cards, available in a variety of denominations, enable users to budget their telephone expenditure and offer ease of use and call mobility.

The GSM Service incorporates advanced digital communication technology with full roaming facilities in countries where there exists a reciprocal arrangement. The unique feature of the GSM cellular service is the subscriber’s identity module (SIM) card which is used to activate GSM handsets and provides unprecedented levels of security and privacy combined with high quality transmission. A prepaid GSM SIM card called ‘Speak Easy’ is also offered.

The advanced Voice Mail Service - Al Zajel - is ideal when a similar message is to be sent to a group of people. The facility takes all the subscriber’s messages, whether he has a standard or a mobile telephone, and forwards these automatically to any phone number he chooses. Access to voice mail is controlled by a personal identification number.

A range of advanced Star Services provide added convenience to our customers - Call Waiting, Do Not Disturb, Call Barring, Hot Line Dial, Call Forwarding, Conference Calls, Incoming Call Transfer, Call Transfer on No Reply, Call Transfer on Busy are a few of these services.

Many Etisalat departments and subsidiaries had certified against the ISO 9001. The certification represents the leadership values and focus toward Quality of product and service that Etisalat is dedicated toward.

“The Etisalat division - Emirates Internet and Multimedia was recognized as the best regional Internet service provider (ISP) at the Middle East Information Technology Awards 2001 held on January 19, 2002.”(www.emiratees.net.ae/isp/awards.html)

Etisalat always come up with new ideas and strategies.

According to Senior Manager, eCompany, “ With the help of Business one promotions innovative offer, SME ‘s in the UAE can now truly benefit from the same high-speed access to the Internet previously available only to large companies. They will be able to do more in less time by engaging in a wide range of online activities and make better use of the opportunities provided by the Internet. Business One will offer these businesses the opportunity to incorporate the Internet into their day-to-day business processes and gain competitive advantage and increased productivity.”

c.         Size and locations currently operating

The former telecom monopoly offers traditional fixed-line services (1.16 million customers), GSM-based wireless network service (3.31 million subscribers), Internet service (more than 400,000 users), and data communication. Etisalat's E-vision unit provides digital cable TV, and its E-marine division installs and maintains submarine cable in the Persian Gulf region. Founded in 1976, Etisalat also operates call centers and provides research and education in the telecom field.

Locally, Etisalat has about 56 business and service centres distributed all aver the seven Emirates, and employing 9.400 worker.

Whereas externally, Etisalat succeeded last year in gaining the second GSM license in the Saudi Kingdom, Etihad-Etisalat Co., which was followed first by the license to operate Sudan’s second nation-wide, fixed-line phone service, Sudan Telecommunications Co., and second by that of Zanzibar Telecom of Tanzania.

These major steps are just the beginning stage of Etisalat’s ambitious plan to expand into regional and international markets and boost the value of shareholders investments, according to Etisalat Company Profile at Zawya.com Company Profile, available at: (http://www.zawya.com/cm/profile.cfm?companyid=334652&ric=ETEL.AD), accessed, June 2005

d.            Competitive strengths and weaknesses

The following are the Strengths, weaknesses, opportunities and threats analyses (SWOT) pertaining to the Etisalat’s overall performance, business formulations and strategies.

Etisalat’s Telecommunications maintain a healthy position. Etisalat has  substantial strengths to balance out weaknesses. Market opportunities in internet and services are fast growing. Competitive threats are becoming more of an issue as key competitor’s ramp up for new opportunities and other new competitors are entering the industry.

Strengths:
Following is a Strengths, Weaknesses, Opportunities and Threaths Analysis (SWOT) conducted to evaluate the status of Etisalat in the telecom industry in the UAE:

1- A sole service provider that controls all aspects of telecommunication services. This would limit foreign and local investment in telecommunications and Internet gateways;

2- Small population and country - making investments in the latest Telecommunications infrastructure and technologies are possible and cost effective;

3- Overwhelming government support on their heavy investment on telecommunications industry and infrastructure. Policies aimed at inviting foreign technology firms into free trade zones such as Dubai Internet City and Jebel Ali Free Trade Zone will allow the UAE to continue its diversification efforts;

4 - Etisalat generally doesn't provide training to customers which could cause more expenses. However as systems become more complicated, especially with LAN and Internet practice the company had managed to formulate to have their systems equipped with friendly environment that could train the users while utilizing the said services,

5 -  Ability of the company to attract, train, and retain qualified technical, sales, marketing, financial, and management personnel to meet the challenges of growth.

6 – A product road map which leads to the development of new functionalities and the enhancement of existing system modules which are in-line with customer expectations.

Weaknesses:

As many other telecommunication companies-Etisalat has currently experiencing the following weaknesses:

1- The cost of Internet access for end users is soaring high.  Although many of the people in the modernized administrative emirates (Abu Dhabi, Sharjah, and Dubai) are able to afford modern technologies, other regions are left behind. Until the gap between these emirates and the remaining four (Ras Al-Khaimah, Ajman, Al Fujayrah, and Umm al Qaywayn) is sealed the UAE will never be a fully modernized country.

Opportunities for Etisalat to go internationally:

1-    The sound reputation of Etisalat’s efficiency in its  services and technology not only regionally but also internationally

2-    The generous financial support that banks and financial institutions are ready to provide Etisalat with for its regional as well as international expansion strategy

Threats:

Based on collective opinions we suggest that Etisalat in general are prone to harmful business treats.

1- Up Coming competition in the market of telecommunications, and customer care systems are highly competitive and the company expects this competition to increase. Not only does the company compete with other independent Service providers, it competes with system integrators and with internal billing departments of many telecommunications carriers.

2 - It is expected that continued growth and competition in the telecommunications industry, and the entrance of new competitors into the market is expected.

3 - An integral factor in the company's growth strategy is the development of third party relationships with a number of consulting and systems integrator firms to enhance its marketing, sales, and customer support efforts. The benefits are in respect to installation and support of its product and lead generation and assistance in the joint marketing and sales efforts in order to generate new business opportunities. Failure to generate these relationships will have a negative impact on the company's ability to meet its targeted growth in sales.

4 - Market is total excoriated as the population is limited in the region comparing to the infrastructure invested.

e.         Need for global expansion at this time

Telecommunications is now an integral part of the social, economic and political tissue of the world.

Major advances in communications technology have substantially widened the range of services carried by the network. Satellites, microwave radio, optical cable links, digital switching and transmission, offer a potential for the improvement of quality and for the extension of access to the most remote areas. The world is now a fully integrated information network.

The pace of technological change is increasing. The magnitude domestically and globally of demands the future will make on our creativity and capacity to adapt is great. Customers will demand more than just state-of-the-art technology. They will want convenience and increased control over their lives that easy and affordable information access can provide. Businesses will look for total telecommunications solutions that will not only enable them to remain productive and compete globally but will also give them a competitive edge and a return on their investment.

Etisalat is well-placed to meet these challenges head on. “We will continue to be there - contributing - in guiding, assisting and developing cost-effective technologically advanced services that will meet the varied needs of our local and international customers and pave the way for the region's new dynamism in the telecommunications industry well into the 21st Century.”(Public relation press, Etisalat, 2004, p2)

New services are constantly being introduced with existing ones regularly being upgraded - these are all designed with the aim of helping customers to streamline and improve their communication needs, stay productive and compete globally.

The Loss of local market with upcoming competition is being compensated by expanding in the internal markets.

 

III. Industry Analysis

Since the telecommunication industry in the UAE was dominated by the monopoly of Etisalat until a presidential decree was announced in med-2004 –as mentioned before- to end it, there has been no competition in this sector. Therefore, the telecommunication industry as well as its globalization drivers will be discussed in general.

Communications and data service networks were built on proprietary platforms to ensure availability, reliability, performance, and service response time. This required highly purposed hardware, operating system, middleware, proprietary technologies and interfaces.  Presently the Industry must move away from specialized proprietary technologies etc and towards commercial-off-the-shelf approaches to ensure the following:

 

• Faster time to market.
• Reduce design and operation costs by using commercial-off-the-shelf hardware and software components.
• Communication platforms need to maintain carrier grade characteristics in terms of availability, reliability, security, and faster service response time.
• Service providers and carriers need to be able to deliver new services based on common standardized platforms.

The telecom industry is moving away from specialized proprietary systems toward open platforms that are based on industry-established standards and common practices (http://www.linuxplanet.com/linuxplanet/reports/5906/1/).

i.          Globalization drivers for the industry

Common Customer Needs - The need and tastes of the telecom industry are more or less similar from one country to another thou they may be some different preferences as per the local taste but the core service will remain same. Accordingly Telecom Industry will offer more potential for globalization.

Global Customers - Global management of telecommunications is provided by the "Concert" service offered by British Telecom and its American partner MCI, allowing a multinational company to outsource all responsibility for management of its purchase and use of telecommunications." (Lovelock, Christopher, Goerge, 1996)

Global Channels - The World Wide Web now offers global outreach to even the smallest of companies. The Web can help sell any type of core product through information-based supplementary services and can actually deliver many information-based services directly to customers.

Global Economies of Scale - Global scale economies apply when single-country markets are not large enough to allow competitors to achieve optimum scale. Scale can then be increased through participation in multiple markets, combined with product standardization and/or concentration of selected value activities.

Favorable Logistics - Logistics is seldom a barrier to globalization for information-based services. Using electronic channels to deliver such services allows providers to concentrate production in locations that have specific expertise and to offer cost savings or other meaningful advantages.

Information Technology - For information-based services, the growing availability of broadband telecommunication channels, capable of moving vast amounts of data at great speed, is playing a major role in opening up new markets. Access to the Internet or World Wide Web is accelerating around the world. But there may be no need to duplicate all informational elements in each new location. Significant economies may be gained by centralizing "information hubs" on a global basis.

The use of information technology may allow companies to benefit from favorable labor costs or exchange rates by consolidating back office functions (such as accounting) in just one or a few countries.

Government Policies and Regulations - Host governments affect globalization potential through local content requirements, currency and capital flow restrictions, technical and other standards, ownership restrictions and requirements on technology transfer.

Nations may perceive both an economic and a cultural threat in unrestricted imports of information-based services through electronic channels. Government regulations range from controls on private ownership of satellite dishes

For information-based services, special policies on education, censorship, public ownership of communications, and infrastructure quality may apply; technical standards may vary; and government policies may affect pricing.

Transferable Competitive Advantage - The single most important competitive globalization driver arises from transferability of competitive advantage. If one industry participant can leverage its competitive position in one country to build an advantage in other countries, all its competitors need to develop a global strategy too.

Services and Global Market Participation - A global strategy approach to market participation involves building significant share in globally strategic markets. Such countries are important beyond their stand-alone attractiveness and may be a source of volume to meet economies of scale, the home or significant market of global customers or global competitors, or a major source of industry innovation (Lovelock, Christopher H. Yip, George S., 1996).

 

Target Country Environment Analysis of

The Islamic Republic of Pakistan

The Islamic Republic of Pakistan is a very huge market by any standard. Its economy is one of the fast growing economies in south Asia. According to the latest Yearly Economic Survey 04-05 of Pakistan, the Gross Domestic Product (GDP) registered the highest growth rate in two decades. It increased from 6.4 percent in fiscal year 2003-04 to 8.4 percent in 2004-05 that boosted Pakistan’s economy to rank second after China. Additionally, this fiscal year has also witnessed the highest per capita income at $ 736 in dollar term. It has been performing very well over the last three years with an average growth of 13.5 percent yearly.

a.         Demographic characteristics

Pakistan has one of the largest populations world-wide. It constitutes of 152.53 million which is the seventh largest one in the world. It has been growing by 2.0 percent since 2000-2001. Although, the per capita income has been rising over the last three years, many Pakistanis still live with very limited income or even under poverty line struggling with the rising living costs despite governmental effort to curb the rocketing inflation rates which registered its highest in eight years at 9.3% (Economic Survey, 2004-05, chap.13, p.141)

Viewed from another perspective, this very high population figure shows a large potential for the telecom sector, taking alone that 56.6 percent of total population is aged between 15 to 64 years which represents student and working-age that depend heavily on communication methods on their daily-bases transactions. In addition, 39.6 percent is aged from zero to 14 percent which represent the future generation of the population whose demand for the fast growing technology of telecommunication will be much more apparent (CIA-The World Factbook).

Although the latest teledensity stands at only 10.2 percent of total population, Pakistan telecom sector has been witnessing an upturn and a remarkable growth since 2003-04 when the deregulation policies were introduced by the government (which will be discussed later in this study). It is expected to grow further over the coming years. According to a forecast done by “Business Monitor International”, a leading firm, the Access Lines in Service (ALIS) are expected to reach 10 million in year 2007 from only 4.6 million in 2004. It is also expected that the Fixed Line teledensity will grow from 2.9% in 2004 to 7.1% in 2007, and cellular subscribers would reach 33 million in 2007 with a cellular penetration of 21% Economic Survey, 2004-05), (PTA Industry Analysis Report, 2004, p. 13)

b.         Target location description

The Islamic Republic of Pakistan is a Southern Asian country whose borders are shared with Iran and Afghanistan on the west, China on the North, India on the East and Arabian Sea on the South, with total area of 803,940 sq km. It possesses a very strategic location not only because it is the main route to the untapped market of Afghanistan but also because it is an essential gateway to the whole regional market which would be in deed a very strategic and essential location for Etisilat Intl. to further itself into other regional countries and territories (PTA, 2004, Industry Analysis Report).

Before Pakistan became independent from UK in 1947, it was part of India. Therefore, tension over some territories like the Kashmir region has been erupting ever since between the two neighbours. However, the political situation between Pakistan and India has witnessed some relieve recently.

Pakistan is a federation of four provinces: Punjab, Sindh, North-West Frontier and Baluchistan; and one Federal Capital territory of Islamabad. Main economic cities are Karatchi, Lahore and Gwadar (CIA-The World Factbook).

Despite the enormous efforts over the last decades by the (by then) monopolistic state-owned, fixed-line Pakistan Telecom Company Limited (PTCL) to introduce telecom infrastructure and technology throughout the whole country, many parts (especially rural) are still out of coverage. In terms of provincial teledensity, Punjab recorded the highest of 3.4% in 2003-04, while Baluchistan stood at 1.5% representing the lowest of total teledensity. Compared with other neighbouring and regional countries, Pakistan still far behind with its telecommunication industry. This pinpoints the huge untapped potential for investment and development.

PTCL which is currently owned up to 88 percent by the government is operating all over Pakistan. It offered a 26 percent manage-and-control equity stake of the company to foreign developers last fiscal year. PTCL, which is the backbone of the fixed-line networks, would further play a very important role with the new winner to provide infrastructure and coverage for all the remaining parts all over Pakistan territory and further develop existing networks (PTA, 2004, Industry Analysis Report).

 

c.         Cultural characteristics

Pakistan is a mixture of different ethnic groups and languages with a multitude of cultures. There are the Punjabi, Sindhi, Pashtun, Baloch and Muhajir. Almost each one of these groups speaks its own language. However, Urdu and English are the official languages in whole country. Therefore, the language can never be an obstacle for foreign investors in Pakistan as long as they speak English, the world’s communication language (Statistics Division Government of Pakistan, 2003).

Generally, there are no major cultural restrictions for foreigners in Pakistan, except the traditional dress code, Shalwar-Qamiz, “- a long, loose, non-revealing garment worn by both men and women”. This is a very important cultural characteristic that Pakistanis are proud of and expect all foreigners living in Pakistan to comply with (http://www.lonelyplanet.com/destinations/indian_subcontinent/pakistan/culture.htm).

For Etisalat Company to operate in Pakistan there should be no major obstacles regarding culture and tradition for many Pakistanis have been living and working in the UAE for years, hence Pakistani culture is well known by Emaratis. Not only this, but since the large number of Pakistanis living in the UAE have been registering very heavy call traffic between the two countries over the years using the monopoly services, Etisalat is already well-known by many Pakistanis even before entering their local market.

Another important factor is the religion. In Pakistan, almost all Pakistanis are Muslim. This again makes it easier for Etisalat to operate in Pakistan because sharing the same believes can help in understanding general ethical issues of the business environment especially in sectors like media and telecom. Furthermore, sharing the same religion assists further integration of the employees in general.

Taking in account other major minorities like Christians, Hindus and Parsees, Etisalat would not have problems dealing with them hence about 80% of the total population in the UAE is expatriate of which more than 60% come from the Indian Subcontinent.

d.         Workforce characteristics

The English speaking Pakistani workforce has gained a reputation for being one of the hardest working world-wide. It is also one of the cost-effective in the world and supports very high return on investment. Whereas a large number of the workforce is domestically well skilled through a network of training institutes provided by the government, many of the Pakistani labour force gain their skills from studying in developed countries and employment in the Middle East (especially Gulf countries) (Board of Investment, 2001, pp.1,6)

Although literacy still stands at only 53 percent of total population, Pakistan is a land with enormous human and intellectual potential. In this regard, the government has established many kinds of institutions and training centres in different parts of Pakistan in order to support and further develop this potential. According to the same survey, the increasing population is consequently leading to an increase in workforce. This is evident from Pakistan’s workforce figure of 45.76 million in 2004 as compared to 40.49 million in 2000. The growing rate of workforce has registered a nearly constant growth of around 2.0 percent over the years.

In addition to the increase in workforce, total employment grew by 2.87 million (7.4 percent) from 2001-02 to 2004-05, whereas unemployment registered an increase of just 0.3 million. This again is an indication of the successful effort taken by the government to generate job vacancies and reduce unemployment (Economic Survey 2004-05, chap. 13, p. 146).

A very successful policy of GoP reduce unemployment is to export skilled as well as unskilled Pakistani labour force to work abroad which does not only reduce unemployment and population domestically but also creates an important source of foreign exchange inflow into the Pakistani economy. The fiscal year 2004-05, Pakistani living abroad sent home about $ 4billion remittances. This was the second largest income from foreign exchange earnings after exports (2004-05, p. 142).

Telecom sector has been declared as a priority area for employment and poverty reduction by GoP in year 2004. By issuing new licenses in the telecom sector, approximately 370,000 direct and indirect employment opportunities have been created. Indirect employment would be provided through franchises, vendors and distributors of the telecom companies entered in the telecom market of Pakistan. PTCL alone is currently employing more than 60.000 employees in different parts of the country.

The table bellow shows direct and indirect employment in the different services of the telecom sector:

Employment in Telecom Sector
		Current Status
Service Direct	Employment in 2004	Indirect Employment
Cellular Mobile	3,309	18,289
Long distance International	313	6,780
Wireless Local Loop	628	4,032
Local Loop	69	70
Payphones	144,720	144,720
Manufacturing	1,133	2,820
ISPs	312	624
Sets & Accessories Sellers	6,000	120
Grand Total	156,484	177,455

Source: Pakistan Telecom Authority (PTA), Islamabad

e.         Relevant trade and investment policies and laws

Most of the economic sectors in Pakistan are open to foreign direct investment. The government has been working on improving the investment policy regime, "offering fiscal and tariff relief and providing comprehensive facilitation services" in order "to create an investment friendly environment, with a focus on further opening up the economy and marketing the potential for direct foreign investment" (BOI, 2001, p.5).

Pakistan telecom sector is governed and regulated by Pakistan Telecom Authority (PTA), a government body that was established early 1997. Since then, PTA has been responsible for all rules, regulations or de-regulations and policies concerning the telecommunication industry (PTA website).

In fiscal year 2003-04, the government of Pakistan announced telecom deregulation policies for both the fixed-line and mobile sector to liberalise the market and open it up for foreign direct investment. The monopoly of the decade-long state-owned fixed-line PTCL came to an end, and two international mobile companies, Telenor of Norway and Warid of UAE, were granted licenses (PTA Industry Report, 2004).

PTA has introduced a number of general and financial incentives such as reduction and exemption of tariff and taxes (other than the 15% Sales Tax) to encourage local and international telecom investors and developers. For example, a minimum foreign equity is no longer required for foreigners to start up business in the telecom sector since 2004.

Furthermore, foreign investors are now allowed to hold 100% of equity with full repatriation of profit.

f.          Politics and laws that may affect entry

Pakistan’s political instability internally as well externally had costly affected and delayed the economic growth over decades. Despite the fact that some domestic violence still erupting in some places, however, the external political situation has been showing major improvement over the last three to four years, especially after the strategic assistance Pakistan has provided during the US-led war on terror in Afghanistan in 2001. This ease in international political situation has reflected positively on the overall economy of Pakistan and helped the Pakistani government take confident and successful economic decisions.

Pakistan's major Trading Partners are US, Japan, Germany, UK, Saudi Arabia and UAE. It is a member in regional and international forums such as the World Trade Organization (WTO) which it joined in 1995, South Asian Association for Regional Cooperation (SAARC), the Economic Cooperation Organization (ECO) and the Organization of Islamic Conference (OIC).

g.         Market transition and financial market issues

Pakistan’s economy is no longer fragile and its balance of payments is no more vulnerable to external shocks for it has been showing a tremendous growth over the consecutive three years. This growth can be mainly attributed to some important internal as well as external factors, such as:

·         the wide ranging structural reforms,

·         prudent macroeconomic policies including privatisation and FDI policies

·         financial discipline most importantly the very successful issuance of Euro and Islamic Bond (Sukuk) that have attracted a large FDI

·         growing domestic demand

·         confidence of private sector

·         reduction of tariff and taxes in many sector especially telecom

·         very high exports and imports,

·         high workers‘ remittance  about $4billion

·         competitive exchange rates  

·         rising oil prices

·         remarkable decline in countries public and external debts

·         exemption of foreign debts as well as poverty reduction by the International Monetary Fund (IMF),

·         large amounts of loans and lending by international organisations and banks such as The World Bank and the Asian Development Bank

·         and last but not least the continuous financial support by the world’s leading economy, USA’s as reward for the Pakistani support during the US-led war on terror in Afghanistan (Economic Survey 2004-05), (Economist Intelligence Unit, February 2005, pp. 16-20 Country Report).

Provided with all the above factors, especially high exports ($14.0 billion last year), four fold increase in workers’ remittances, increasing FDI (expected to exceed $1.0 billion at year end), successful performance of Euro and Sukuk Bonds, and the appreciating Pakistani Rupee (RP), Pakistan foreign reserves has been touching new levels to reach all time high at $13.0 billion towards end 2004-05 from $ 12.5 billion a year before. This was reflected on Karachi Stock Exchange (KSE) which has witnessed extra-ordinary volatility during this fiscal year (Pakistan Economic Survey, 2004-05, Overview of the Economy).

To conclude all the above, it is expected that after the very significant market transition that took place in the Pakistani telecom sector after de-regulation and privatisation 2003-04, the telecom industry would witness further growth in the future

Depending on the large sized population, per-capita income, growth rates, and a very high local telecom demand (Merrill Lynch, 9 March 2004, Pakistan Strategy, p. 27).

 

IV. Target market analysis

a.         Description of customers and characteristics

Pakistan telecom markets has unique characteristics of cost and Customers demand structures, Telecom services are offered to two distinct groups of customers with quite different patterns of demand, residential customers & business “Public & Private “with Note of Private sector owns more than 80% of the market share and .the residential sector is most important in countries with a high penetration of telephones.

If we examine the money spent on telecom, the business sector becomes much more significant in Pakistan which has near universal service with the great majority of lines supplied to residential customers, calculations based on other countries account data indicate that two thirds of the communication revenue originates from business customers.

An important point in relation to the need for regulation is that the demand profiles of these groups are quite different. A few decades ago all customers were demanding the same service – namely telephony. Business customers were generating more traffic but the service demand was basically the same. Today many business customers are demanding a wide range of communication services, which only a few residential customers consider to be relevant for them. On the other hand cable TV is only of limited use for business customers and other infotainment services primarily directed toward residential customers are being developed. Therefore, there is a growing segmentation between different user groups in terms of markets, services and interests, the following major market segments exist in Pakistan:

1. Government departments 

2. Banks & Insurance companies.

3. Trading companies

4. Small and medium sized companies

5. Courier companies

6. Professionals

7. MNC’s and Corporate users

8. Students

9. Home / Recreational users

b.         Estimation of market size

Over Years, slow grew in Pakistan telecom sector noticed but its rate of growth remained fluctuating. at 2004 the competition has been introduced in the telecom sector which has shown positive impact on the growth of the sector in short span of time. It is also expected that sector will grow further when new operators will roll out their network in the 2005. An account of the size & growth in telecom sector is given below figure 1.

      Source: http://www.pta.gov.pk//media/industryanalysisreport

c.         Local competition analysis

The mobile sector is characterized by robust competition – by four operators, expanding to six by the end of 2005. The competition in the telecom sector which has been introduced by PTA has been passing on to the consumer in terms of reduction in tariffs and extension in coverage. On the eve of Independence Day, Ufone offered free connections and added approximately   3, 48,000 customers in just one month. Mobilink, the leading mobile company in Pakistan, is also offering various packages to attract more customers. Recently, Mobilink offered free connection with RP. 300 scratch card before it was offered bundle package and offered free hand set with connection.

At the end of year 2003 the mobile subscribers were almost 2.4 million which has increased to 6.5 millions till the end of September 2004. In the year 2003-04 sector grew by 173% (Figure -1). This unprecedented growth can be attributed to series of events that have taken place during the year. This includes award of license to two new mobile companies thus creating competitive environment for existing operators. These operators have started acquiring market share as much as possible by brining down the prices of new connections to zero. Similarly, PTA initiates to reduce activation tax from   RP 2000/ to RP. 1000/-  [1] on new mobile connection have played an important role in increasing the subscriber base as the benefit was completely transferred to the consumers. The potential for future growth of this sector remains high, as there is pent-up demand. This is evidenced by the fact that PTCL has over 200,000 pending orders for new connections at this time. Networks and billing systems cannot really be used for much else, and their swift obsolescence makes liquidation pretty difficult.

Porter's 5 Forces Analysis

1          Threat of New Entrants - No surprise, in the capital-intensive telecom industry the biggest barrier-to-entry is access to finance. To cover high fixed costs, serious [2]contenders typically require a lot of cash. When capital markets are generous, the threat of competitive entrants escalates. When financing opportunities are less readily available, the pace of entry slows. Meanwhile, ownership of a telecom license can represent a huge barrier to entry. In Pakistan still there is also a finite amount of "good" radio spectrum that lends itself to mobile voice and data applications. In addition, it is important to remember that solid operating skills and management experience is fairly scarce, making entry even more difficult.

2          Power of Suppliers - At first glance, it might look like telecom equipment suppliers have considerable bargaining power over telecom operators. Indeed, without high-tech broadband switching equipment, fibre-optic cables, mobile handsets and billing software, telecom operators would not be able to do the job of transmitting voice and data from place to place. But there are actually a large number of large equipment makers around. Nortel, Lucent, Cisco, Nokia, Alcatel, Ericsson, Tellabs are just a few of the supplier names. There are enough vendors, arguably, to dilute bargaining power. The limited pool of talented managers and engineers, especially those well versed in the latest technologies, places companies in a weak position in terms of hiring and salaries.

3          Power of Buyers - With increased choice of telecom products and services, the bargaining power of buyers is rising. Let's face it; telephone and data services do not much vary regardless of which companies are selling them. For the most part, basic services are treated as a commodity. This translates into customers seeking low prices from companies that offer reliable service. At the same time, buyer power can vary somewhat among market segments. switching costs are relatively low for residential telecom customers, they can get higher for larger business customers, especially those that rely more on customized products and services.

4          Availability of Substitutes - Products and services from non-traditional telecom industries pose serious substitution threats. Cable TV and satellite operators now compete for buyers. The cable guys, with their own direct lines into homes, offer broadband Internet services, and satellite links can substitute for high-speed business networking needs. Railways and energy utility companies are laying miles of high-capacity telecom network alongside their own track and pipeline assets. Just as worrying for telecom operators is the Internet: it is becoming a viable vehicle for cut-rate voice calls. Delivered by ISPs - not telecom operators - "Internet telephony" could take a big bite out of telecom companies' core voice revenues.

5          Competitive Rivalry - Competition is "cut throat". The wave of industry de-regulation together with the receptive capital markets of the late 2000s paved the way for a rush of new entrants. New technology is prompting a raft of substitute services. Nearly everybody already pays for phone services, so all competitors now must lure customers with lower prices and more exciting services. This tends to drive industry profitability down. In addition to low profits, the telecom industry suffers from high exit barriers, mainly due to its specialized equipment.

d.         Estimated market share and sales expected

Cellular Sector

      Source: http://www.pta.gov.pk//media/industryanalysisreport

Figure-2 depicts the market share of four existing mobile operators in Pakistan mobile market. Mobilink being the market leader owns about 62% market share in terms of cellular subscribers. Ufone the competitor of Mobilink in GSM has share of about 21% in total subscribers of the mobiles in Pakistan. Instaphne and Paktel have market share of about 17%. Recently, Paktel has started GSM service and it is expected it would be able to add more customers in future.  It is also expected that a healthy competition among 4 existing and two new entrants would encourage growth by many fold.

Fixed Line Sector

Fixed line Services in Pakistan have also shown magnificent growth patterns over the years. This has been evident from the increased teledensity over the years. At 2004 the teledensity has reach to 2.9% which was just 2.2% in year 2000.

PTA has been working towards increasing teledensity; in this regard PTCL tariffs have been reduced drastically not only for local but also for nation wide and international calls. PTCL has been forced to bring in schemes for provision of fixed line connection on easy terms (Industry Analysis Report 2004)

  Source: http://www.pta.gov.pk//media/industryanalysisreport

Geographically, Punjab is the region which is largely connected with telecom services and has teledensity 3.4% in the year 2004. Teledensity in the province of Punjab was 2.8% in the previous year. Baluchistan has the lowest teledensity in Pakistan which is only 1.5% in the year 2004. This is due to the fact that deployment of network in the areas in Punjab is more cost effective than that of Baluchistan (Table – 1).

Table-1 Teledensity by Provinces

Year	Punjab	Sindh	N.W.F.P	Balochistan
2001	2.4	3.0	2.0	1.3
2002	2.6	3.2	2.2	1.3
2003	2.7	3.3	2.4	1.4
2004	3.4	3.5	2.7	1.5

Recently, PTA has issued licenses for LL and LDI and it is expected that teledensity will increase as soon as new operators start their services. Similarly 108 licenses are expected to be given out for WLL services which will be a corner stone in increasing teledensity in rural areas of Pakistan which is currently very low.

Card Payphones

Card Payphone sector has also shown a tremendous growth over the years.  In the year 2000-2001 there were only 10,400 card payphones in the country and the number has reached to 184,669 in July 2004 shown in the Figure -4.

  Source: http://www.pta.gov.pk//media/industryanalysisreport

The growth in this sector is basically due to liberalized policy, competition, reduction in regulatory charges and reduction in tariffs of telecom services.

Broad Band/Internet

At 2004 over 1900 cities have access of internet in Pakistan and strategy in Pakistan is to spread access to as many cities, towns and villages as possible and as soon as possible. For the purpose, the Internet bandwidth rates have been reduced drastically, for specific purposes, receive only, satellite communication has been facilitated without license requirement.

           Source: http://www.pta.gov.pk//media/industryanalysisreport

As evident in Figure 5 there were only 19 Internet service providers in the year 1997-98 which has reached to 126 in the year 2004.To encourage the growth of the internet in the country, PTA has decided that in future only two types of license, PTCL region wise and Nationwide, license will be issued. PTA has set RP. 100,000 license fee for Region wise license and RP. 300,0002 for nationwide license. Existing licenses of District/Provincial level will also me upgraded to regional and national level. PTA has also requested Central Board of Revenue that internet operators who are using VSAT may be exempted from Central Excise Duty (CED). One could hope this measure would help to increase the internet users by many fold.

Sales Expected

The revenues in terms of central excise duty (CED) and general sales tax (GST) have also increased significantly. Central Board of Revenue (CBR) collected over RP 2 billion from fixed line and cellular sector during July-August 2004 (in just two months). Total collections from telecom sector in terms of GST/CED increased by 5% in fiscal year 2004 compare to the previous year as in Figure 6 (http://www.pta.gov.pk)

Following the end of monopoly structure in basic telephony and introduction of more competition in cellular market of Pakistan, it is expected that both of sectors will grow considerably in the next few years. A number of WLL, LL and LDI operators will start to roll out their networks shortly. A leading firm “Business Monitor International” has forecasted that Access Lines in Service (ALIS) in Pakistan will surpass the 10 million mark in year 2007  (Figure 6 ) which are only over 4.6 million in the year 2004. It is expected that Fixed Line teledensity will reach to 7.1% in the year 2007 which is only 2.9% in the year 2004. Competition in the sector will help to reduce tariffs and improve the affordability for common man. Mobile sector will also grow considerably with the entry of two new cellular operators and expansion of networks by existing operators. It is expected that cellular subscriber's base would reach to 33 million in the year 2007 and cellular penetration would reach to 21% in the same year.   

 

VI. Strategic alternatives

a.         Market entry Alternatives

            Before we discuss market entry alternatives, we have to recall some events that will have impact on Etisalat alternatives. Since 2000 Pakistan government has taken steps to develop Pakistan’s small IT sector. The promulgation of the Telecom (Re-organisation) Act in 1996 laid the foundation for the rapid development of the telecommunications sector. The act permitted private investors to participate in the provision of new telecoms services. More recently, the government announced fixed- and mobile phone deregulation and established a quasi-independent regulator, the Pakistan Telecom Authority (PTA) to keep an eye on the sector.

            The government has already deregulated and privatised selected telecoms services. There were four mobile phone operators in the country by end-2002. In addition, there was one radio-paging company, 70 telex, facsimile and private automatic branch exchange (PABX) service providers, two manufacturers of large digital exchanges, 60 Internet service providers (ISPs), and more than 20 data network operators in the private sector, according to the US Foreign Commercial Service.     

            Pakistan expects to receive between US$2bn and US$2.5bn in local and foreign investment in the information technology (IT) and telecoms sectors during the next two years. (http://www.ebusinessforum.com/index.asp?layout=newdebi&country_id=PK&country=Pakistan&channelid=6&title=Doing+e-business+in+Pakistan, June 2005)

So since July 2003 the government took the following steps for telecommunication liberalization.

·         Both local loop and long-distance international dialling are granted for 20 years with no restriction on the total number of licenses.

·         Licensing for new mobile phone operators through competitive auction bidding. The license terms are currently 15 years and policy will be renewed every five years.

            Stages for the telecommunication liberalization are shown in Appendix 1 (Yousef, 2004, P4). Telecoms development is a high priority for the government. The sector is currently being liberalized and has made significant strides. Higher value-added telecoms services are now open to competition, and private-sector efforts have been encouraging: mobile phone services, card pay phones and Internet services have grown rapidly in recent years. Fixed line telephony was a state monopoly until December 2002, dominated by the 88% state-owned Pakistan Telecommunication Company (PTCL).        

            Therefore, there is a potential market for Etisalat to invest more than one telecommunication service ranging from normal telephone calls to Satellite communication. The following table indicates Etisalat market entry alternative and the advantages and disadvantages of each one.

Entry Mode	Advantages	Disadvantages
Etisalat own Subsidiary	100% ownership and control.	Environment risk factors e.g. Economic and Political changes will affect the safety of assets.
Licensing	Faster start-up, lower cost and ability to access existing technology. It is preferable entry mode due to gradually increasing number of competitors and Etisalat will be able to access existing technology e.g. legacy telephone main lines and mobile network.	Less control on decision making. Less Control over its technological advantages
Joint Venture	More than 50% control on venture.	Sharing the profit with other companies.
Equity Alliance	More Ownership	Different Culture Objectives

           

From Pakistan environment analysis explained earlier, we know that PTCL had offered 26 percent share for sale. Therefore, the most suitable entry strategy for Etisalat is Equity Alliance which is Etisalat favourite strategy in entering the new markets in Africa and Asia. Etisalat can then have ownership and control and management power over the government-supported, back-bone of fixed-line sector PTCL. As per the cultural issues which where discussed earlier in this report, there would be significant differences.

b.         Marketing Alternatives

            Etisalat will over multiple services in Pakistan. Therefore, to determine the potential demand for each service they should estimate carefully the possible sales for each service. As an entry strategy Etisalat may offer a portion of its services line.

            Marketing can be done online or using the traditional way. Using online marketing customers can use Etisalat web site to quickly compare prices from different competitors. Online advertisement includes also banner advertisement and target email offers. On the other hand, Etisalat can employ traditional marketing techniques used domestically through media like TV and Newspaper ads where message interpretation is almost the same. In addition they can give free subscription for internet services and extra talking minutes for mobile calls to attract the largest number of customers.

            Services price should match middle income people expectations. As well as services should be distributed on main cities where large population is.

c.         Human Resource Alternatives

            Etisalat has well based Human Resource structure for managing its international business. For top management positions Etisalat depends on its own people from the head office to set up the business because they know the company procedures and structure, and thus more likely to implement Etisalat Global strategies. Those managers are host country managers. They could be UAE nationals or expatriates managers (Third Country nationals) from the headquarters. For sure Etisalat have high competent local executive managers in all different levels of management hierarchy who made Etisalat as Telecommunication leader. Accordingly, human resource will select and transfer the best manager to the open job. This is known as geocentric staffing policy (2000, P381). This will help in maintaining Etisalat unified culture and tighter control.

            Balance Sheet Approach is recommended for compensating those managers where each expatriate should enjoy the same standard of living they had at UAE (Overran, 2000, p. 87).

            In the early stages of operation development, it is necessarily to have managers with cultural and political skills. Pakistani managers will be favourable because this will eliminate any culture difference. Once basic contact network has been established and Etisalat start to gain experience in market and country culture, traditional managerial and technical skills become progressively more important. At a later stage, managers from the head office can be kept to a minimum and gradually rotate them. Etisalat policy is that six months is the maximum period a manager can stay abroad.

            Training is also important at the early stages to brief managers about life conditions in Pakistan. Since the cultural difference between UAE and Pakistan is modest the training will focus on how attitudes (positive and negative) are formed and how they influence behaviour, and there impact on business outcomes. For example how they respond to and treat the new Pakistani subordinates. Also mangers can be enrolled in an internet cross cultural training which is a self training multimedia package. It uses short videos to introduce inter-cultural problems and then guides managers how to handle the situation. It is remarkable project from Etisalat to prepare its people who travelling overseas and it covers different cultures in different countries where Etislalat is operating.

d.         Organizational structure

As mentioned earlier, Pakistan consists of four provinces and a capital territory: Punjab, Sindh, North-West Frontier, Baluchistan, and the Federal Capital territory of Islamabad. Hence there are some political and cultural differences between each region; it is recommended that Etisalat go by region in regard of organization, peroration and control, starting from the better infrastructured, more sophisticated provinces like the capital, Punjab and Sind, expanding into the less ones like N.W.F.P and Balochistan.

VI.        Implementation of strategic plan

Etisalat plans to aggressively bid for the 26% stake offered by PTCL along with the management control. Considering Pakistan market as its hub for expansion in the Asian market with its huge untapped potential of some virgin markets like Afghanistan and Bangladesh, Etisalat will ensure to outbid its competitors.

The other advantage that Etisalat has over its competitor bidders is the proximity to the location and similarity (to an extent) and familiarity with the target country culture.

Considering the huge capital investment and Long-term objectives the company Etisalat should try to be the market leader in Pakistan market and dominate the Pakistan market as it does in its domestic market. It should not go for short-term objective of profits without being the market leader.

Pakistan being a huge and diversified market with different local preferences based on the different regions comprised in the four provinces and capital territory, Etisalat should cover the market region wise. First it will cover the regions with established infrastructure provided by the PTCL and through its media campaigns and placement of its products as "best products, affordable to all" try to make sure that masses find it affordable and identify with its image locally e.g. regions like Punjan and Sind. Parallel it will setup the infrastructure in the nonexistent regions (like N.W.F.P and Balochistan) and create a new market and tap the untapped potential. Here the speed of set will be important as other competitors may come in and do the same.

The company should also go for the Niche market and place itself as one of the best in the Industry to ensure that the customer feels proud to associate with the best in the industry. At the same time it will ensure that the prices offered are competitive, keeping in mind the bulk of the Pakistani customers and tapping of the yet untapped potentials.

Etisalat should invest heavily on the infrastructure to ensure full coverage of the Pakistan market with expansion potential to cover neighboring markets in future. The finance could be provided easily from its already cash laden domestic status along with the excellent support available from the banks in its domestic market.

Etisalat should also depute its senior managers, who are familiar with the company's objectives and procedures. The product and services offered would be on the similar line as in the home country to take advantage of the scale of economies but of course, the lower cost and local preferences will be tailored into accordingly.

Its Management is already familiar with the Pakistan culture and various cultural issues as most of the staff in the home country is from Pakistan and neighboring regions. Etisalat will adapt suitably to the local environment and operate thorough multi-domestic strategy. This will also give Etisalat the control over the existing labor and management who can be suitably adapted to the corporate objectives and culture.

The company should invest into training and development of the local talent to ensure its long-term objectives and extension of its existing corporate culture.

Etisalat should avoid startup inefficiencies by going in with PTCL to ensure ready market base and capitalize on its own and PTCL's brand image to build its customer base from existing and new customers.

It also should go for extensive Marketing via the Media Viz. Radio, T.V, Billboards, promotions and sponsoring of local events to create market awareness and identify with the masses, gain "the goodwill and brand identification important to the marketing of mass consumer products"(Daniels pg. 251)

Etisalat should increase demand for telecommunication services and at the same time decreasing the costs of service due to economic of scale, offer better quality communication networks, increase customer choices and offer competitive prices.

Etisalat envisages implementing market penetration and market development strategy region wise.

 

Appendices

• Table of stages of telecommunication liberalization in Pakistan

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1 At the time when this report was commissioned.

[1] $1 US =59.74 Rs (pak)as on 22/6/05

2 $1 US =59.74 Rs (pak)as on 22/6/05