Failure of Paktel 2

GROUP MEMBERS Mashal Khan Kasi Hassan Saddiqui Rehan Ahmed Nayab Malik Aysha Munir Sidra Anjum

& Jaweia Shakir

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NAYAB MALIK

PAKTEL PAKISTAN

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Network of branches having:– Over 133 authorized dealers.– more than 80000 customers.– 21operating cities and business centers

working 24 hours a day, which was a testimony to their claims.

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Paktel really proved to be the pioneers in customers and innovative services, new tariffs, economical offers, the best coverage and the widest ranges of value added services.

Concept of mobile phones.

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Ownership changed. Prepaid service under the name of Tango brand. Services. GSM.

HISTORY OF PAKTEL

Paktel was a mobile telecommunication company in Pakistan. It was the first ever company granted license to carry out cellular phone services in Pakistan, set up by Cable & Wireless.

Competitor. Play a major role.

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Paktel GSM was launched with a total coverage of over 31 cities making the launch the biggest ever to hit the mobile sector.

Millicom sold Paktel for $284 million to China Mobile.

Fifth-largest GSM operator.

Paktel announced about exit from cellular market. Paktel was renamed to CMPak. CMPak has now rebranded Paktel to Zong. Pakistan, the world's 6th most populated country

provides a comparable environment in terms of demographic and economic conditions for China Mobile to grow its overseas experience.

SALE OF PAKTEL TO CHINA MOBILE AND RENAME TO

CMPAK

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

So far CMPak has invested more than US$ 1500 million in the telecom sector in Pakistan.

CMPak is determined to make its mark in the Pakistani market and to change the way people communicate.

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CMPak needs to give themselves a corporate look and attract more human resources from the market - groom them, offer trainings and then retain them.

For China Mobile, Pakistan would be a tough battle field for them.

CM first have to bring cellular subscribers onboard and then thinking inovative.

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Millicom expansion roll out was very slow for the fast market, due to which customer satisfaction level leading to the customers to switch over other operators & lacked due to poor technical coordination.

The major factor the technical, mishaps in equipment to a serious extent.

The proper tactful technical training and assessment was ignored.

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Marketing mix goals

•Satisfy customers

•High profits

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CAUSES OF FAILURE

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JAWERIA SHAKER

CAUSES OF FAILURE OF PAKTEL

Paktel GSM adopted, near about all possible ways to re-alive company (even by adding China Telecom) but failed.

PTA (Pakistan Telecommunication Authority) was concerned about that they don’t care if Paktel closes down but Paktel has to pay the $29m before they exit.

PTA claimed that if Paktel fails to pay then the legal suit will follow with the liquidification of Paktel’s assets..

PTA will then allocate all the Paktel’s 0304/0303 users to Mobilink as it makes sense because it will complete Mobilink’s dial code series.

PTA or our Government didn’t had much to care about the hundreds of people whose sole ‘bread n butter’ is Paktel let alone the millions of users.

Many fingers were pointing towards MIC instead of PTA because some people also said that MIC earned their share of money from this part of the world & now they want themselves out as from here.

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Paktel should had at least thought about:

1. Customers (1.5 Million)

2. Employers (About 1000 head counts)

3. Coworkers (About 1000 ppl) Its a matter where all the telecom companies should had sit

together with Paktel and assisted them because closing a big name like Paktel would shatter their coustomers

Paktel was the poineer Mobile Services Provider in Pakistan having largest customer base in late 90s.

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But what went wrong and what made them to shatter down this prestigious organization within a span of 12-15 years?

Are we seeing consolidation in the market where only few players will be there to compete?

Didn't they invest in developing their infrastructure?

Didn't they invested in quality HR?

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Did they became something like Mobilink that take users for granted and does not invest as much as per the growth of subscriber base?

Answering such questions is the main objective of this project so in the following section we describe some very vital and prominent reasons of Paktel’s vanishment from Pakistani telecommunication markets.

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REASONS OF FAILURE

Paktel Company is small with a capacity of only 2 million subscribers. Some times Paktel subscribers face problems in receiving calls and SMS some times didn’t reach.

With no GPRS no MMS Paktel is only for small group of people.

Don’t have sound proof offices and they don’t care spending some money on call center.

Paktel, is also the most reliable and the constant frustration associated with Mobilink, people are still switching to Mobilink because if someone's friends or colleagues already have a Mobilink connection then it is likely that person will also subscribe to Mobilink.

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The technical problems faced by cell phone companies, "mobile crime“ Drug dealers, bootleggers and pimps all use cell phones.

Paktel connections that can probably be detected with most ease. Paktel calls share the frequency of airwaves that this device has.

While it may be a useful tool to fight crime, the invasion of privacy it carries out is almost Orwellian.

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People always go behind NEW THINGS, NEW LOGOS, NEW NAME. They wants new brand, new NAME. Actually the mishap did by Millicom (ex-owner) business strategies are folded in the name of PAKTEL.

The Millicom (ex-owner) management was that they did not focus on the quality of technical human resources and their marketing strategy was very dull as compared to the aggressive marketing by other operators in the market.

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The PAKTEL company was in contract with a local operator of call centers.

The advertisements of PAKTEL are not good enough to attract the new customers the subscribers are not well informed about the new packages.

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MASHAL KHAN KASI

CAUSES OF FAILURE

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CAUSES OF FAILURE OF PAKTEL

Paktel was the poineer Mobile Services Provider in Pakistan having largest customer base in late 90s but what went wrong and what made them to shatter down the whole organization within a span of a few years?

Paktel GSM adopted, near about all possible ways to re-alive company (even by adding China Telecom) but failed.

CAUSES OF FAILURE OF PAKTEL . . . . . .

“The exit of Paktel was a clarion call for PTA and the Government of Pakistan to note that Businesses also need governance cover like

ordinary citizens do.”

LACK OF GOVERNMENTAL SUPPORT ---------- PTA’s

BIASNESS

The governmental regulatory and control authorities considered Paktel and such other companies as some cash cows that, their bureaucracy believed, can be milked infinitely.

PTA had always been providing unnecessary support and advantages to Mobilink.

LACK OF GOVERNMENTAL SUPPORT ---------- PTA’s BIASNESS

They never paid the spectrum license fee, had 35% of the 900 MHz spectrum (highest than any other GSM operator).

They carried most of their traffic on 900 MHz.

They had the best Microwave spots & got the best srategic places in Cantonment & Government areas at minimalist rates to install BTS sites.


On the contrary, Cantonment authorities charged Rs.60000 – 90000/month for a single radio site in their areas in metrocities like LHR, KHI & ISB/RWP from Paktel.

Civil Aviation Authority reaped Rs. 100000/month from them for BTS installation at Lahore airport.

Paktel had to pay $29 million on account of licence fee installment in the first week of November 2006.


There are certain obilgations of PTA/governement to sort out issues with operators who have invested more money in Pakistan than people whould have ever thought of a few years ago and the failure of Paktel to survive in such a market is an eye opener for the Government/PTA and a reminder of their failure as a regulatory body.

LACK OF STRATEGIC & FUTURISTIC THINK-TANKS

Every sector, when opened up for investment, attaracts a lot of people but a condition of only a few sticks in each generates in the process.

The top executives of Paktel lacked:

Strategic decision making skills&

They did not had futuristic thoughts to forecast the ever-growing oppurtunities in the marketing and operational environments of the Pakistani telecom industry.

LACK OF STRATEGIC & FUTURISTIC THINK-TANKS . . . . .

The defficiency of professional and competent think tanks consequented a lot for Paktel ultimately resulting in a failure for them.

Paktel’s competitors used new emerging technologies and the criticism on them regarding their investments are purely illogical and meaningless because in the last they got what they wanted.

Every thing is fair in WAR (competition) and LOVE (profit) so during the past time mobilink made strategies either from marketing point of view or public / govt relation.

LACK OF STRATEGIC & FUTURISTIC THINK-TANKS . . . . .

Most of the sources blame every thing on PTA and Mobilink but if u want to survive than u fight and make strategies which help in your’s survival and fight against competition.

But for Paktel it seemed that they wanted less attention, less investment, and BIG profits which is not even possible now in the current market scenario.

UNSATISFACTORY CUSTOMER CARE RELATIONSHIPS

Paktel was generally believed to be a fraudulent company and many claimed that it cheated.

Many critics quoted examples about how Paktel betrayed people and caused them losses in terms of their money.

They even claimed that to save itself a single penny, Paktel may cause a customer a loss of $1000.

All the above feelings of Paktel’s customers came out due to some very unfortunate customer care decisions.


Paktel unilaterily cancelled all its franchises without any notice and alternatives.

It forced to bear lossess of millions of rupees for its external and internal parties.

Paktel used to sell Paktel sims to frenchises on high costs and the same sims were privided to DSO’s free of cost.

In this way, they caused millions of rupees loss to their own franchisees.


They earned about Rs.5000 millions annually, from Pakistan.

Out of this money, they were to pay Rs.1800 million for licensing and Rs.1300 for taxes.

The remaining Rs.1900 million was sufficient enough for any business to expand its operational and customer care services but . . . . . . . . . .

Under such state of affairs, the only responsible party for this current situation of Paktel is Paktel itself.

COMMUNICATION GAPBETWEEN THE COMPANY AND ITS CUSTOMERS

SIDRA ANJUM

COMMUNICATION GAPBETWEEN THE COMPANY AND ITS

CUSTOMERS

Paktel was generally believed to be a fraudulent company and many claimed that it cheated.

A few thoughts of criticism of the users of Paktel are presented here:

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“In fact, the Paktel is a fraudulent company. It cheat every body. Its main policy is Divide and Rule. I may quote many examples, by which this Paktel company betrayed the people from their money. Just to sava its a single penny, it may cause you loss of $1000”.

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“The role of PTA is also doubtful. One of our friend, who filed a suit on Paktel, when contacted to PTA for help, he was told that we (PTA) cannot do any thing, as the matter is in the court. When another friend contact the PTA, he was advised to file the case againt Paktel.”

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“I was recharging my paktel talk free every month, they were always sending SMS before expiry of package, but this month in July Paktel didnt send me alert msg about expiry of package and they expired my package and said u cant subscribe this package again. It is not fair that Paktel didnt inform me and expired my package and now I am not able to re-subscribe. Atleast Paktel should care of old customers and of those Customers who are spending lot of money on Paknet usage”.

Unfortunate customer care decisions. Cancelled all its franchises without any notice. Bear lossess of millions of rupees. High costs sims. Bluff exuses. Earned about Rs.5000 millions annually, from

Pakistan.

REASONS OF CUSTOMERS REACTION

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Pay Rs.1800 million for licensing and Rs.1300 for taxes.

Rs.1900 million to expand business but they didn’t.

Introduce a new brand, just like Telenor did by expanding into Talkshawk, Djuice and Persoana.

CONSUMER RESPONSES TOWARDS PAKTEL

Inability to fit into the consumers consideration set.

Improve marketing and promotional efforts never differentiated paktel in the mind of the consumers.

Retention of customers. No new offers packages or uniqueness. Service was also not mandatory.

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Advertisements were not appealing to masses. Increased competition lead to further difficulties

in establishing their brand name. Bravd equity could not be developed properly. Increased and rapid innovation by competitors. People regarded it as a low quality last option

product.

OPINIONS

Firstly, in our opinion it was definatly nothing to do with their image.

Paktel is one of the oldest companies in Pakistan in the field of mobile telecommunications.

Secondly, when telenor launched its service, from day one it became the cheapest and the trend setter, if practically "forced" all the other players to decrease cost. Paktel/ Insta were cheaper, but they were never able to become the trend setter.

MARKETING STRATEGIESMARKETING STRATEGIEMARKETING STRATEGIMARKETING STRATEGMARKETING STRATEMARKETING STRATMARKETING STRAMARKETING STRMARKETING STMARKETING SMARKETINGMARKETINMARKETIMARKETMARKEMARKMARMA

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HASSAN SADDIQUI

There were many flaws in the marketing mix of paktel.

MARKETING MIX OF PAKTEL AND ITS FLAWS

PRODUCT

PACKAGES

Telecom is one of the fastest growing industry of Pakistan.

Extra emphasis on few packages and lock of innovation in its strategies.

Reliance on the strategies that are no more viable.

paktel

PLACEMENT

Span of coverage.Channel of distribution.

SPAN OF COVERAGE

Channel of distribution

•Few franchise

•Channel of distribution was not organized and effective

•Pricing strategy of paktel was profit oriented ,suitable when no or low competition.

•Paktel should have adopted sales oriented strategy to increase its sales volume.

PRICE

PROMOTION

Promotion strategy was not effective as it failed to

communicate their indented information.

COMPARATIVE GRAPH AND TABLESOF PAKTEL AND OTHER NETWORKS

REHAN AHMED KHAN

CONCLUSIONCONCLUSIOCONCLUSICONCLUSCONCLUCONCLCONCCONCO

CAYSHA MUNIR

RECOMMENDATIONS & CONCLUSIONS

• CMPak will go big in the coming years. And growing Quickly due to quick decision making ability. Pakistan is rather an entry point for them to market outside mainland. There is no doubt that till now CM Pak not gets the good response as compared to other new operators in Pakistan. My view points is that first a good marketing strategies is requires as initially done by WARID & TELENOR in Pakistan along with good products.

Steps of improvments:

Reviving brand image of Paktel services Enhance reliability of services

Improved recruitment supported with policies competitive with competitors attracting experience & talent.

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Revenue from data business accounted for 20 percent of China Mobile’s total earnings. Wireless Application protocol (WAP) business expanded by 120 percent over 2004 with revenue quintupling.

China Mobile is world's largest cellular company in terms of number of active users. Presently China Mobile’s users are sending more than 700 million short messages a day.

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They have approx 4% market sahre & planning to expand approx 20% to 30% in 1st year after propoer launch.

They havily invest not only on infrastructure also on planning & human resource too.

The problem with the millicom management was that they did not focus on the quality of technical human resources.

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Their marketing strategy was very dull.secondly expansion roll out was very slow for the fast market.

The major factor which was the technical mishaps serious extent.

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Paktel have serious mind for the market, but still if the technical side isn't strong, it will be still very hard to thrive in the market.

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THANKS!

Failure of Paktel 2

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