2009

Company Report
Mobilink GSM, Pakistan

Virtual PC School of management 5/29/2009

Introduction
Mobilink GSM, a subsidiary of Orascom Telecom, started its operations in 1994, and has become the market leader with 30 millions subscribers and still growing. Mobilink is offering both post paid and prepaid solutions to fulfill the needs of communication among individuals, businessmen, corporate, and multinationals. Mobilink is also offering advanced voice communication services that make the subscribers more loyal. Mobilink also offers a host of value-added-services to its prized customers. At the same time, Mobilink has a largest coverage, which is about 8000+ cities and towns nationwide as well as over 120 countries on international roaming service.

Industrial Analysis
Threat of entry:
New entrants to an industry bring new capacity, the desire to gain market share, and often substantial resources. Price can be bid down or costs inflated as a result, reducing profitability. Companies diversifying through acquisition into the industry from other markets often leverage their resources to cause a shake-up. Thus acquisition into an industry with intent to build position should probably be viewed as entry even though no entirely new entity is created. The threat of entry into an industry depends on the barriers to entry that are present, coupled with the reaction from existing competitors that the entrant can expect. If barriers are high, the threat of entry is low. In case of Mobilink, it holds the maximum number of shares and is continuously launching new attractive packages by offering low bid prices on calls and so on. The other potential competitors are Ufone, Warid, Telenor, and Zong. The competition is fiecre among these major companies and they are competing head-on-head with each other in order to gain maximum market shares and maximum users. The mobilink along with its competitors is a well established company with the huge list of subscribers of approx: 30 million users and with market shares of 37%, currently.
Barriers to Entry:

Economies of Scale: Mobilink is the oldest telecom company in the industry and estimation is that it has achieved the economies of scale as it has covered fixed cost and perhaps they only are recovering their variable overheads. The services they are giving is huge depending on the number of subscribers the company has both in prepaid and postpaid sectors. This is how mobilink is producing more by offering its customers new value added products/packages and services.

Mobilink is also running on joint costs, for instance, you buy a sim package of 68 paisas per 30 sec, on that package you can also use the option of unlimited sms per day @ Rs. 2.75. So this is how mobilink is making good use of joint costs and so on. Product Differentiation: The barrier for new entries is also based on produt differentiation of Mobilink. Just like other rivals in the industry, Mobilink is providing and emphasizing on different features of packages, where they can be different like prices, coverage customer loyalty etc. The mobilink has also differentiated its product by introducing blackberry in the market in the inception. Capital Requirements: The new entrants have to face huge capital requirement in terms of complete set up. Mobilink has invested huge capital and they have almost recovered it too. So a new entrant has to face huge capital requirement. If new entrant enters the industry, it will run the business based on high risks because as the mobilink, along with Ufone, warid and telenor, can even charge far less to keep it out of the competition. Access to distribution channels: Mobilink is the biggest company with largest market shares in the country, so the distributors of mobilink may not be allowed to distribute others product even of new companies. In addition to this, mobilink has its own franchises, and outlets etc to distribute its products/packages to the users. Costs disadvantages independent of Scale: Mobilink may have cost advantages not replicable by potential entrants no matter what their size and attained economies of scales. The most critical advantages are following factors: 1. Mobilink has coverage everywhere in Pakistan and is more reliable connection still considered. 2. Mobilink has opened its franchises almost everywhere in Pakistan. Furthermore, within a city, mobilink has lot of outlets and franchises spread at every corner. 3. Mobilink has more experienced and well trained staff that a new entrant may not have.

Rivalry among competitions:

Besides being the market leader, Mobilink faces intense competition from other competitors like Ufone, Telenor, etc. This competition is mainly of price, advertising, products/packages and increased customer service or warranties. Mobilink so far has been able to use all the tactics to maintain its subscribers for longer period of time. However, it enjoys the biggest market sharer 37% along with Ufone (21%) and Telenor (20%). Mobilink leads the competition through its customer amounting to approximately 30 million.

Competitors are Numerous Or Roughly Equal In Size And Power: There are many competitors in telecom industry in Pakistan, for instance, Mobilink, Ufone, Telenor, Warid, and Zong. Previously, all the companies were competing but with the entry of Zong, in 2007, into the market, the competition became fierce and head-on because of the fact that Zong was the price leader and after then a new race towards offering low call prices, and increasing customers through any means, started. Also, as we look at the financial position of all the firms, we can see that they all are equal in size and have enough capital and finances to support their future developments and to implement their plans.

Slow Industry Growth: The growth of the telecom industry is slow in terms of new customers and subscribers. These telecom companys businesses is mainly based on the switching customers that switch from one company to another depending on their preferences.

High Fixed Costs: Costs in telecom industry are also high, e.g. cost of administration in each customer office, outlets, other staff, and in addition to this high costs of signal towers, boasters, and acquisition of new technology. So, every company in this industry is trying to fill in capacity and to maintain breakeven and further to generate profits.

The Service Lack Differentiation: In telecom industry almost all the firms are offering similar services, similar packages, similar prices, and similar coverage. So, it is very difficult for any company to differentiate its product and to have competitive edge.

Substitutes:
Mobilink has largest subscribers base in Pakistan with 39.2% market share. It is offering services that are affordable to every budget. Besides all these, Mobilink still has to face fierce competition as it has many substitutes. Firstly, Ufone, subsidiary of PTCL enjoying good market share after Mobilink. To seek the better position in the competition, Ufone has lowered its call and SMS rates and offered GRPS services and currently the cheapest prepaid rates available in the market. Secondly, Telenor, bit behind of Ufone offering attractive services. Telenors sound clarity and call connectivity is excellent. Telenor was the first one who introduced easyload services for recharging account from Rs. 10 to 10000. Telenor is good at offering affordable call rates. In the end GPRS service is also good but sometimes it remains offline thats why Mobilink post paid subscribers do not switch over to Telenor.

Thirdly, Waridtel, offering quality services but these are expensive than Mobilink and other companies. Waridtel is targeting the youth instead of businessmen. In terms of call rates WaridTel is expensive. It compensates users spending with SMS package at very cheap rates. WAridtel is also expensive in its GPRS services. Each time you connect to the WaridTel Server you have to pay Rs. 3.80/ connection excluding downloading charges. Fourthly, Zong, china mobile company entered into the market with cheap call rates. Its GPRS services are satisfactory but not so good. Since it has commenced its business, it could enable itself to snatch market share by offering various services on cheap rates.

Bargaining power of buyers:

Bargaining power is the ability to influence the setting price, quality etc. Buyers compete with the industry by forcing down prices, demanding higher quality or more services, and playing competitors off againstall at the expense of industry profitability. In the Pakistan telecom industry the buyers exert enough pressure on the companies to reduce their prices and introduce new packages and provide better services on regular basis because the buyers have many alternatives to change the service provider company if their requirement is not fulfilled. The Mobilink has approx: 30 million subscribers, which make Mobilink the biggest company in the Pakistan. This huge list of subscriber includes people all walks of life, such as ordinary people, students, professionals, businessmen, etc. Here, the buyers of the Mobilink i.e. the customers have been able to exert enough pressure on company to reduce its prices and offering new packages due to the availability of lot of variety in the market. For instance, Zong is the cheapest connection in the industry following by warid and ufone, respectively. So keeping in view the strategies of all the competitors, the mobilink is also trying to offer almost every kind of a package for almost every kind of user at very competitive prices. As the matter of the fact, the mobilink is not the cost leader at all and still enjoys the customers loyalty by giving them national and international best coverage in the industry. Despite of this, buyers are the influencing factors here because they have the option to switch to some other connection if they are not providing them certain benefits in terms of quality and prices. Almost every class of its users spends a considerable amount of money on using mobilinks services even a student is able to spend around 200-1000 (estimated fig) every month. Therefore, for mobilink, every sort of user contributes handsomely to the profitability of the company, so mobilink has to offer new demanding packages as per the requirements of the users at minimum prices to satisfy them and maintain long-term relations with them to generate more market shares and profitability. This clearly shows that the buyers of the mobilink, i.e. the users, have power to change and influence the overall companys strategy just because of the availability of other similar substitutes. In this situation the users/buyers are much price sensitive except from the business class, which does not compromise on quality service (i.e. coverage). The market share of mobilink has considerably reduced to 37% from 40% over the past years, which shows that the customers of the mobilink have switched to some other substitutes,

thus clearly showing the increased power of buyers. Despite of being the oldest company in the market, mobilink still faces tremendous competition from its competitors. The huge number of subscribers make mobilink follow other ideas and strategies because in the end mobilink, obviously, wants to gain more trust of their users by building long-term relations and does not want to lose them to some other connection. However, the other buyers, like retails, franchises and so on, do not have power all at in the industry.

Bargaining power of suppliers:

Mobilnk has its own supplier i.e. Orascom, Alcatel-Lucent, Huawei and Motorola amongst its
list of renowned network vendors.

In addition to cellular service, the Orascom (OTH) group is diversifying its service portfolio to Mobilink by setting up new businesses and also expanding through acquisitions. In addition to Mobilink, the Orascom group also owns TWA (Trans World Associates) which operates an undersea fiber optic cable from Karachi to Fujairah, UAE OTH has positioned itself as a leader in the region for its diverse GSM operations with various GSM support and Internet operations. One of OTH's main strategies is to create its own non- GSM subsidiaries to act as a backbone of support for its regional GSM operations i.e. Mobilink. OTH has achieved this by dedicating financial, technical and management resources for supporting its subsidry. This includes network support and installation of GSM operations, equipment procurement, handset procurement and distribution companies, Value Added Services, and Internet operations. Mobilink, Pakistans leading cellular service provider and part of the Orascom Telecom Group, recently announced the awarding of a contract worth in excess of US$1.5 million to Intec, a leading supplier of business and operations support systems (BSS/OSS) to the global telecom industry. Under the terms of the agreement, Intec will supply the mobile operator with core components from its advanced Settlement product family, Intec InterconnecT v7 and Intec Automated Reconciliation. Together these technologies will substantially enhance Mobilinks ability to invoice mobile and fixed interconnect partners, cutting billing costs and improving cash flow. This reduces settlement time and improves the accuracy of interconnect charges Orascom telecom is not exerting power on Mobilnk because in Pakistan Mobilink is one of the company which is the subsidry of it but an advertising agency name Midass which also helps Mobilink by promoting through ads. Midass can exert pressure on Mobilnk but as a brand midass is comfortable working with Mobilink because it has majority shares in telecom in Pakistan. Orascom cant switch to other brand because of Mobilinks vast coverage, increased customer loyalty and of brand name while midass can switch to other it mobilink will not negotiate with it

or it can pose a credible threat of forward integration so Mobilink can improve the terms with it.

Resource Based View

Ac tivityMa o Mob p f ilink

No Sub sidies Captur e Major customers No hid den Costs No Dis connections

Pioneer in Pakistan Majority share In Market

Stand ard Pack ages

Best Coverage
Expand Network Adver tisement Man agement

Lim ited use Of Suppliers

Professional Crew

More Cu stomers

Customer Loyalty

High employee compen sation

Uniq u e Postpaid Connectio n

Oras com Telecom

As we know Mobilink is pioneer in telecom industry with maximum market share of 39.2% and biggest cliental list of approx 30 million subscribers. However, the resource based view of Mobilink is the combination of both internal analysis and external analysis. Here, the RBV (Resource Based View) sees companies as very different collections of physical and intangible assets and capabilities. So in this paper, we will elaborate the tangible and intangible resources and assets of Mobilink along with the 5 tests of RBV.

Resources & Assets of Mobilink:

Tangible Assets Investment Switches Cell Sites Optical Cable Deployment Switches ( Nokia-Siemens, Alcatel, Hawaii) Radio Base Stations Intelligent Networks ( Siemens) Microwave Equipment ( NEC and Intangible Assets Brand name Goodwill Technical know how Management expertise, and experience Skills & capabilities of workforce Market share (39.2%) Customers loyalty Value added services

Alcatel) Operating Frequency Building Human resource Vehicles and so on

Maximum Subscribers number ISO 9002 Quality Management System Certification Cash on credit and so on

Five tests of RBV (Resource Based View)

1. The Test of Inimitability
Physical Uniqueness The Logo of the Mobilink GSM Pakistan can not be imitated by the competitors plus their location where their main head office is situated (for instance, office near mini market) is also inimitable which gives them certain edge by making them operate in the crowdy places and in the main cities area. Causal Ambiguity Being the pioneer in telecom industry Mobilink success is determined through the coverage it provides and the connections it has distributed to maximum number of customers by providing them value added services and thus making the customers loyal to its brand. Path Dependency Mobilink is a pioneer in GSM SIM services, it was Mobilink that introduced these portable Sims in Pakistan, earlier the connections were AIMs. These AIMs connections were set in the mobiles and customers could not change their mobile sets. So in doing so it attracted numerous customers and created a big customer bank. This made Mobil inks path dependency because mobile users who were using Mobilink find it difficult to convert to other networks. Economic deterrence Mobilink has already invested huge amount of capital in its infrastructure and all that to generate maximum business in the telecom industry. It shows that companies who want to compete with Mobilink are required to invest heavily to get the competitive edge. This is also sort of inimitable for the other companies.

2. The Test of Durability:

The longer lasting the resource is, the more valuable it will be. Mobilink has already invested a huge capital in building its infrastructure and has made it services prominent by giving coverage in more than 10,000 cities. Such heavy and sizable investment is bit inimitable. In addition to this, their connectivity is also durable and long lasts and covers many areas.

3. The Test of Appropriate-ability:

Mobilink get all the benefits of selling of the Sims and new connections. Whether, these connections are sold by the Mobilink itself or by franchises, owned by other

individuals or firms. Also, it gets profits for the usage of the connections i.e. making calls, sending SMS and MMS, etc.

4. The Test of Substitutability:

In the telecom industry, the price is the major basis of competition. In this industry almost all the companies are offering the same prices, so the firm that has the customer bank will have the customer bank. In this way Mobilink has the competitive edge over others, because it offers the same as others are offering but it has the huge subscribers list, strong brand name, goodwill, customer loyalty and most of all customers high switching costs( in terms of they have their number spread and cannot switch to other number because they will lose their contacts).

5. The Test of Competitive Superiority:

Mobilink has the competitive superiority because of the following: 1. It is being pioneer in the market, it has huge clientele list 2. It has established strong distribution network 3. It has made huge investments in building infrastructure 4. It is also the only company that has laid its fiber optic cable from Dubai to Karachi. 5. It has a strong brand name, customer loyalty and goodwill

Investing and upgrading resources:

Mobilink has invested over $2.5 billion in infrastructure, network rollout and the largest franchise, retail and customer services network across the nation. We plan to inject an additional $500 million in 2008 to meet the growing demands of our services and the needs of our customers. Mobilink has progressed from voice to carrier-class nationwide services by completing its own 6,500 kilometre redundant fibre optic backbone network across Pakistan. It now plans to provide high-speed data connectivity in the urban and rural sector of Pakistan through WiMax services. Being a developing country, the expansion of broadband networks and services is of high importance to the Pakistani economy. Broadband connections in the country currently stand at around 0.1 million. With the population figure at over 165 million, this will clearly place Pakistans economic development into the next stages of progress. In addition to this, Mobilink recently entered into an agreement with four companies viz. DVCOM, DanCom, Zarco and WOL to consolidate its operations aimed at providing better wireless and broadband facilities for its customers. Leveraging on the assets and expertise of these acquired companies Mobilink plans to provide state of the art data services in the country in 2008. With the basic infrastructure in place, keeping pace with technological advancements will be one of Mobilinks key priorities.

In fibre optics, Pakistan Telecommunication Limited (PTCL) had been the only company that owned an optic fibre backbone. Mobilink has successfully introduced competition through the introduction of a nationwide network. Mobilinks optic fibre backbone provides the perfect platform to Mobilink for connecting its customers nationwide with highest level of voice and data quality with more reliability.

Leveraging Resources:

Mobilink is deploying Nokia Siemens Networks Release 4 Solution in Network Modernization Deal which allows Mobilink to immediately reduce operating expenses, while accelerating deployment of new services to mobile subscribers. Mobilink GSM is Deploying TekMedia Anti-Spam Firewall Solution to Gain Better Network Control and Enhance Customer Experience Mobilink GSM, has deployed Tekelec's TekMedia AntiSpam Firewall Solution to combat SMS spam attacks on its subscribers. Mobilink is the largest telecommunication service provider in Pakistan, with more than 31 million subscribers using its network. With the TekMedia solution, Mobilink now has better control over spam impacting its network and is able to help protect its customers from unsolicited, unwanted SMS messages.

Competing On the Edge

We have made this analysis based on our observation of the telecom industry, especially on our company Mobilink.

Strategic Challenge of Change

Mobilink collapsed in terms of customers because it was overemphasized due to which they realized that they are only the market leader and will maintain status quo. Mobilink underemphasized themselves in creating and executing the pricing strategy. In todays intense, high velocity changing industry Mobilink has to come up with out of the box Value added services and bring change. This transition is obvious in Mobilinks repositioning itself and hitting the market with a new face with the catchphrase Reshaping communication In order to take competitive advantage and come put of destructive competition Mobilink should compete on the edge e.g. when its competitors launches any Value added service(VADs) it should react to it by introducing better and innovative VADs. Like credit card package proposed by us. Mobilink should anticipate in future needs and markets like Graduate Mania in power tools which are an n\we need and a new market segment. It should become environment for others by introducing VADs like Mobi Credit card, Graduate Mania etc. In order to achieve profitable growth Mobilink need the following:

Reduce Costs Focus on Maximizing usage. Sustain market share leadership Improve Network utilization Identify & capitalize on more profitable revenue streams

As Mobilink was pioneer in GSM technology which makes it a change leader and its competitors react to it. If Mobilink has to compete on the edge it should have the following characteristics:
1. Unpredictable : acquisition of GSM technology in Pakistan, which makes Mobilink

unpredictable and Expanded its international roaming Service scope in 14 more countries
2. Inefficient: Mobilink PCO strategy was uncontrolled as their network was not in rural

3.

4. 5. 6.

and northern areas plus Mobilink and UBL launch online bill payment facility for Indigo subscribers as their strategy was to be a market leader and maintain status quo. Proactive: as Mobilink coordinated with GEO films MOTOROLLA plus MOBILINK GSM Short Message Service Center allows Vehicle Tracking and Fleet Management services that are being provided by Tracker (Pvt.) Ltd., under the brand name of C-Track, a company licensed by Pakistan Telecom Authority (PTA) Diverse: Mobilink is launching different packages with high celebrity endorsement like wasim akram, reema, shan etc. Other than that, their diverse move is their coverage in more than 10,000+ cities. Continous: They only follow moves what their competitors are doing. Their applied moves can be: price cut, new value added services, new packages etc. Uncontrolled: Mobilink, we think, is very structured organization and operates in very structured and control form.

If Mobilink has to change continuously they have to be at edge of chaos i.e. either it have to be partially structured or in too much chaos to come out of status quo. Their focus should be on edge of time by keeping in mind the past present and future. Finally Mobilink should change by passage of time rather than by seeing what its competitors do e.g. it should not wait for its competitors to launch VAD unless it should be proactive in launching creative VADs.

Playing Improvisational Edge

Mobilink is no doubt one of the biggest telecom players in the telecom industry; however, we must not forget that Mobilink along with the other competitors has created price war. Every company is competing on price and all that thus making competition destructive. However, we can observe that Mobilink sometimes react to what competitors offer and sometimes try to lead it by launching new packages but it always fails because the factor of imitation is always there. Whatever is offered can easily be imitated by the others in this situation. The competition has become fierce and Mobilink is not finding its way out to it.

We as a group think that Mobilink is still stuck to old strategies like industrial analysis, cost leadership, and so on. As the telecommunication is the fast and rapidly changing industry, Mobilink has still not pursued the option of Competing on the Edge. Mobilink has adhered to its Status Quo and we think it does not want to change it or even if Mobilink wants to get rid of destructive competition, it is not finding the way out. Mobilink is not playing the Improvisational and is strictly following the bureaucratic style, which means that Mobilink is working on too much structure. We think that Mobilink focuses strongly on structure and processes as whenever you have a chance to talk to someone belonging to Mobilink, he would always say that we are very much structure driven and are very strict with rules. From this we can say that Mobilink is carrying following signals by operating on such bureaucratic trap: Rule Following Culture: Mobilink has rule following culture and all the rules actually are about process. The answer to any problem, perhaps, is well defined process. As we can see the competition in the industry, Mobilink tend to have more rules which allow it to follow whatever is going on in the competition. 2. Rigid Structure and process: Mobilink possesses rigid structure and processes. For example, it has very lengthy recruitment structure and all that. Rigidity can be observed as when a competitor follows certain step; it strongly reacts to it and comes up with the same step in terms of package or service. 3. Channeled Communication: The communication at Mobilink is quite channeled. The communication effectively takes place within the department, which means that the manager knows what is going on in his/her department not more than this. In this way proper communication between the departments does not take place, thus reducing chances to improvise.
1.

Mobilink can be successful if it follows the process of improvisation, which is a part of Competing on edge. Mobilink must know it structure because there is nothing wrong with structure but too much structure eliminates the chances of flexibility. Improvisation involves balancing the structure that is vital to meet budgets and schedules with flexibility that ensures the creation of innovative products and services that meet the needs of changing markets. In short, if Mobilink had been improvising since the first day, it would have been the leader and might have crushed the destructive competition which we can see in the form of Price War.

Capturing Cross Business Synergies

Lockstep Trap: Mobilink had been stuck into the lock step trap of too much collaboration. Because they focused on the collaboration of their business and they tried to establish collaboration among their businesses, e.g. collaboration between they head office with the branch offices and with the franchises, also among different packages managers. All of the businesses of Mobilink were almost the same with the little differences. Star trap:

Mobilink had also been stuck in the star trap of collaboration, because Mobilink had always thought that all of its packages, i.e. Jazz, Ladies First, and postpaid, etc, are a star performers and are performing excellently in their respective fields but in reality these packages were not performing well and all other telecom companies benefitted from this and increased their customer bank, as there was a limited customer in the market, Mobilink did not change and did not invent something new so the customer went to other service providers which were offering new and improved services.

Gaining the Advantage of The Past

Over Connect Trap: Mobilink was struck n the over connect trap as it has been clearly shown that there was nothing new added to the business and Mobilink just stuck to its past victories like jazz which at one time was sold at about Rs. 10,000 per connection. They thought that it will remain like this forever and did not change much to compete in the changing market so as a result they lost their market share. Also the executives of Mobilink created their business models on the basis of Jazz and such successful packages in the past and at first they did not introduced any packages completely relying on Jazz. And when later on they introduced some packages they were built on similar business models as Jazz with little difference, which greatly hurt the companys performance and position. They also did not let go their employees and functionalities which were of no use to the company rather they were sticking to the company like the parasites. Dis-Connects Trap: Now Mobilink has entered into the new era and is now changing with the new changing market, not connected to the past, it is now moving ahead and introducing new packages and new technologies. But in doing so they should keep in mind and should be aware of the fact that too much novelty is also harmful to the company. And also that you cannot ignore your past altogether, you will have to move forward viewing your past and in combination of past and the future.

Game Theory
Mobilink:

The telecom industry, these days, is son a price war and is in destructive competition as the customers have the power to compel pressure on the companies to lower their prices due to the availability of other substitutes (telenor, Ufone, zong, warid, ptcl wireless etc). The companies in order to survive and gain maximum number of share in the markets are constantly introducing new low packages at lower prices to hit the consumers needs. It is assumed that the companies find no other alternatives to change the entire situation, perhaps and the only way they could find to compete is to provide the best set of services at attractive prices. Now we think that there is a need to change the overall game of the industry so that win-lose strategy could be changed to win-win strategy. In addition to this, we can also see that the companies have also introduced a new concept, i.e. you can change your connection to some other connection by calling at a specific number, to ease the substitutes as well as the customers, thus forming a win-win situation. However, the Mobilink Company is worst off, although it has the maximum numbers of subscribers because of the other substitutors (other GSM companies). So Mobilink and other companies as well are generating short term benefits due to their lower prices, thus competition has become destructive in spite of using the win-lose strategy, which has converted into the loselose strategy. The Mobilink is operating in competitive ways not in cooperative ways as to its fear the market share would be lost if cooperation is shown.

Customers:
The customers of the mobilink company are the business people, teenagers, ladies (ladies first package) and so on. It is focusing on almost every segment of the market. However, the customers have the buying power as we have already analyzed earlier during the industrial analysis of the company. The customers of the telecom industry are very price sensitive. However, Mobilink possesses the highest list of subscribers of approx 30 million people. No doubt, Mobilink is not as cheaper as the other companies are and have lost the market shares in the last 2 years from 45% to 39.2% due to the switching of the connections to some other connections. Customers actually generate money for the company and the income flows from customers to company and than company to suppliers. Furthermore, the customers fall into two categories: postpaid and prepaid. The postpaid subscribers of Mobilink are lesser than the prepaid subscribers.

Complementors:
The complementors of the Mobilink could be the mobile companies such as Nokia, Samsung, and Sony Ericson and so on. They are the complementors as the mobile phones are required in order to use the connections because if there are no phones, there are no mobile connections and all that. The value is not being added by the company to the complementors and by the complementors to the company.

Substitutors
Low tariffs, high consumer demand, intense competition and a government and regulator have created a powerful thrust for growth in Pakistans mobile market as Ufone, Warid, Zong and

Telenor giving hard time to Mobilink. In order to be competitive Mobilink must add value to its subscribers by introducing innovative ideas like Mobi card which will benefit its subscribers not only does it make the market more competitive, but it encourages operators to improve the quality of their networks.

The game of business- Adding Value

Business is all about creating or adding value nor about winning and losing. It is all about playing the right game and finds strategies for changing the game. From game theory we came to know that interactions in business can take two forms. The vertical dimension in which there are suppliers and customers. In this dimension Mobilinks resources such as infrastructure, HR and technical expertise flow from Orascom to Mobilink. OTH has positioned itself as a leader in the region for its diverse GSM operations with various GSM support and Internet operations. One of OTH's main strategies is to create its own non- GSM subsidiaries to act as a backbone of support for its regional GSM operations. OTH has achieved this by dedicating financial, technical and management resources for supporting its subsidiaries. OTH is dedicated to provide the best quality services to its customers, value to shareholders, and a dynamic working environment for its nearly 11,000 employees. On the other hand of the value net are products, like Pre-paid and Post-paid including services like coverage, GPRS, Power Tools and IVR Ring tones/Logos etc flow from Mobilink to its 10 Million Subscribers. In the horizontal dimension of value net Mobilink interacts with its complements and substitutes (Ufone, Warid, Zong and Telenor) but doesnt make any transaction because they are the alternative players from whom subscribers may switch. Nokia and Mobile Zone (MZ) are the complementary players joined hands with Nokia, global leader in mobility, to make the Nokia handsets available for sale at Mobilink Customer Service Centers in Lahore, Karachi, Islamabad and Rawalpindi. In this whole scenario value has been created by the mobile companies except Mobilink in terms of Mobile portability i.e. number remains the same but the network or mobile operator is changed along with changing of SIM card.

PARTS Analysis:
Players:
Customers: In the telecom industry the customers are all the people who use telephone. This means that all of the population of the country is the customer to telecom industry; it includes current users and potential users who will use the service. 2. Substitutes: In telecom industry there are several companies working to provide the services.
1.

Direct substitutes: direct substitutes to Mobilink, which provide wireless service, are Ufone, Telenor, Warid, and Zong. These companies are working in the same arena and are fighting to get as many wireless customers as they can.

Telecom is the limited industry in Pakistan, because the customers are limited to the number of people living in Pakistan. A company can get maximum customers equal to the population of Pakistan, if it somehow manages to get everyone as its customer. In-Direct substitutes: these include companies that offer similar types of services but are not the direct substitutes of the wireless companies. These are PTCL, WorldCall, Vfone, Instafone, and other telecards. Suppliers: Parent companies of all the wireless companies are their suppliers, they provide them with the infrastructures, boosters, and technical know how. Therefore the suppliers to all the companies are as follows:
3.

Mobilink: Orascom, an Egyptian company Ufone: PTCL, Pakistan landline service providers Warid: Alfalah Group of companies Telenor: Denmark mobile based company Zong: After acquisition, its supplier is China Mobile Company, world largest cellular company.

Complementors: In this industry the complementors of telecom companies are the mobile phone manufacturing companies. These are Nokia, Sony Ericsson, Samsung, China mobiles, etc.
4.

Added Values:
Each of these companies has added the value in this industry, for instance: 1. Mobilink: Introduced GSM technology in Pakistan, G1 network coverage, etc. 2. Ufone: Started to lower the call rates by improving the networks and infrastructure, also started to offer night free packages and free SMS services. 3. Telenor: Further lowered the call rates, introduced EasyLoad. 4. Warid: It introduced a service that any mobile number can be transferred to Warid with the same extension, i.e. 0300 number can be transferred to Warid as same 0300. 5. Zong: It started to offer the lowest call rates in Pakistan and also initiated a trend for other companies to lower the call rates further to be in the competition.

Rules:
As such there are no fixed rules in this industry; it is a sort of freewheeling game. But there are some ethical norms, that one firm cannot criticize other firms directly, although it is unethical to break this rule but still companies constantly tend to break it, e.g. In Ufone adds message is given that sab se sasti call, sab se sati call rates ki maar, etc, this depicts that other companies are offering much higher rates and also that Ufone has knocked them out. This is against the norms and ethics of any industry.

Tactics:

In this industry, the competition has become destructive; all the firms are competing on the price basis. If one company lowers the price the other firms tries to lower the price further. Besides this price competition, firms are also adopting few tactics to outshine other, e.g. Mobilink is offering Blackberry sets with its postpaid connections at a lower price than the market, it has introduced free SMS packages, free point system, etc. Telenor started EasyLoad, and now have introduced an easy billing postpaid package, etc. Ufone, targeting the youth, has introduced night free packages from 12 am to 7 am. Since, the competition among these firms has become destructive so these tactics are not working, because other firms imitate the moves one firm takes.

Scope:
The scope of this industry is limited, as mentioned earlier that it is limited to the total population of the country. All the firms are competing to get the maximum share of the market and to grab as much subscribers as they can. This industry is not boundless, so the firms have to come up with the new idea and new techniques to have the market share. Mobilink, in this industry has an advantage of being the 1st in the market so it enjoys the highest numbers of subscribers, whereas others are working hard to increase the market share.

Mobilink: Changing the Game

Currently, all players in the telecom industry are competing on prices for which they are offering services. The players (substitutes) in the telecom industry are following:

1. Direct:
1. 2. 3. 4. Ufone Telenor Warid Zong

2. Indirect:
1. 2. 3. PTCL World call Wateen

Competition has become destructive based on win lose strategy from all players in the industry, which according to our perception has resulted into lose-lose situation. Mobilink is planning to come out of price competition and molding this competition into valued service based competition. In this regard, Mobilink GSM can change the game by introducing a credit card in alliance with HBL.

Credit card (Mobi card) will initially be offered to postpaid subscribers and if this policy will be successful then Mobilink will plan to offer this service to prepaid subscribers.

Terms and conditions for Credit card

1. A Mobi account will be opened as a bank account at HBL. 2. The minimum amount of money which you can use to make transaction is Rs.500. 3. Each time a subscriber makes transaction and 3% of the paid amount will be deposited to the Mobi account. 4. Mobi account will grow at present interest rate.

About service:
As mentioned in terms and conditions the 3% of the amount paid will be deposited to Mobi account each time subscriber will make transaction from Mobi card. There are two options for the subscriber that either he/she uses his/her account for credit balance or let it grow up with present interest rate and he/she can avail opportunity to have Black berry cell phone from Mobilink GSM. Additionally, this credit service, which is an innovation from Mobilink GSM will be patenized for 5 years with the aim that no other telecommunication company can copy this. Mobilink GSM believes that after 5 years great credibility will be achieved from subscribers and Mobilink GSM will not harm by having its service been copied by other company.

Impact of this strategy

A valued based win lose situation will be created in the telecom industry and Mobilink will be the key player in that industry. Other companies claim that Mobilink GSM is on 3 rd rank in terms of having post paid subscribers but after offering this service the prepaid subscribers will switch over to post paid and size of postpaid subscription will be larger. It may convince other companies subscribers to switch over to Mobilink GSM because no one will be offering this attracting service for 5 years.

Strategic Suggestions
As we have observed, the competition has become destructive and telecom companies are not thinking out of the box to destroy price war. Companies have always stuck to the traditional concepts of developing strategies like industrial analysis, resource based view, identification of core competence and others. However keeping the competition in view we must not forget that the telecommunication industry is fastely moving and rapidly cahinging in P akistan as well in the entire world. In order to destroy the destructive competition Mobilink has to come up with some thing new.

Mobilink being the pioneer must realize it is trhe icon of Pakistan telecommunication industry which holds maximum market share and the huge subscribers list. Any of the following strategies could be implemented:
1. Mobilink can use game theory to destroy the destructive competition thus generating

higher profits, which means that has to change the entire game by analyzing how they can play with their complementors, substitutors, customers, and suppliers, which collectively represent the value net of the industry. Besides this, Mobilink should analyze what the key players are doing, what services or packages should be introduced to add value in the game, what rules should be there and should be designed to change the game, what tactics to make, and in what scope it has to operate in. As we have talked about changing the game in the beginning by introducing value added service (Mobi card), Mobilink can bring change and drive the competition on value added bases instead of prices.
2. Mobilink can also use the theory of Competing on the edge to come up with the better

strategy that could be called semi-coherent strategy. As the telecommunication industry is rapidly changing fast industry and is also growing at rapid rate, the Mobilink needs to show certain response to deal with the emerging change. Mobilink can be anticipate the future and can also lead the industry by being the pioneer in telecom. This is because Mobilink has achieved a good brand image, economies of scale and so on, so it can be the anticipater as well as the leader at times. Mobilink must welcome surprises, must be uncontrolled, diverse in moves, proactive in approach, inefficient, continous and unpredictable.

Within this, mobilink should try to operate within edge of chaos because only than they will be able to come up with innovative ideas and that is how they can be the leaders. They must not adhere to their past, thus giving an end to the status of quo mentality. They must continuously look forward to the future by looking at the past too. Mobilink must come out of the lockstep and star traps where it has been stuck in terms of over collaboration and not having a follow up of its newly introduced packages. It must critically analyze the acceptance rate of its offered services and make changes accordingly.