Dmitry Bushik provides an overview of the Pakistan telecom landscape and opportunities for DIALLOG marketing. The telecom market in Pakistan is growing rapidly due to economic growth and deregulation. Mobile operators are focused on market share growth by targeting lower income customers. DIALLOG should consider positioning itself as an innovator focused on quality service to target early adopter customer segments.

1. Building a Strong
DIALLOG Brand
Dmitry Bushik
Consultant Marketing

2. Pakistan Telecom Landscape Overview
Macroeconomic Outlook
Population: 154 million One of the fastest growing economies in Asia
GDP growth of 8.4% for 2004/05
Foreign direct investment has increased to $1.5
billion, the highest ever in the country’s history
Privatization process in full swing (PTCL sale –
largest privatization in the history of Pakistan)
USD/Rs. exchange rate stable at 59-61
Interest rates have increased substantially since
last year (KIBOR rate currently over 8%)
Inflation currently at double digit levels
Sources: EIU (Economist Intelligence Unit), Telenor reports

3. Pakistan Telecom Landscape Overview
Regulatory and Political Framework
Telecom Act, 1996 laid the foundations for deregulation:
Fixed-line Deregulation Policy announced in 2003
Mobile Cellular Policy implemented in 2004
Broadband Policy announced in 2004
PTCL privatization took place in June 2005
A well developed licensing framework is in place:
- 6 national cellular mobile licensees
- 12 long distance international (LDI) licensees
- 51 regional local loop licensees (includes WLL)
Activation tax for new cell connections reduced by 50% to Rs.500 (June 2005)
Implementation of Mobile Number Portability (MNP) expected in Q1 2006
Decreasing interconnection rates in the market

4. Pakistan Telecom Landscape Overview
Strong Telecom Market Growth
Source: Telenor Pakistan Market reports

5. Pakistan Telecom Landscape Overview
Competitive Environment: Cellular Mobiles
Launch date Technology Ownership Sub’s Base %
1994 GSM Orascom 9,559,817 57.90%
2001 GSM PTCL/Etisalat 2,940,309 17.80%
(2005)
1991 AMPS Millicom 1,074,024 6.50%
2004 GSM
1991 TDMA Millicom (?) 459,792 2.80%
2005 GSM UAE group 1,469,927 8.80%
2005 GSM Telenor 1,034,359 6.20%
16,538,227
As of 31st Oct 2005

6. Pakistan Telecom Landscape Overview
Competitive Environment: Mobile Subscriber Base
58%
Mobilink
Ufone
Paktel
18% Instaphone
Warid
Telenor
6%
3% As of 31st Oct 2005
6% 9%

7. Pakistan Telecom Landscape Overview
Competitive Environment: WLL Subscriber Base
250.000
PTCL
GOCDMA
Worldcall
Diallog
100.000
3.000 45.000 As of 31st Oct 2005

8. DIALLOG Marketing Opportunities
Mobile Operators Positioning

9. DIALLOG Marketing Opportunities
1. Mobile Operators Positioning
Product Focus Innovator
Low ◄ Service development ► High ▼ ▼
Focus on
Product Variety
Innovations &
focus: Solutions
Promotions:
Provider model
Aggressor
Focus on
Focus on
Quality & CS:
Tariffs: Price
Industry
Leader model
Professional
▲ ▲
Price Leader Customer Focus
Low ◄ Market stimulation ► High

10. DIALLOG Marketing Opportunities
Umbrella Marketing - 1.1. Mobile Operators Positioning Simple strategy to
multiplication of be achieved at any
subbrands - in fact cost:
limits Mobilink’s Race for Numbers.
maneuvering field Product Focus Innovator Obviously to be
Low ◄ Service development ► High
within the given ▼ ▼ continued without
Map of Positioning. retreats.
Focus on
Product Variety
Innovations &
focus: Solutions
Promotions:
Provider model
Aggressor
Completely predictable
and explainable
competitive behavior.
Focus on
Focus on
Quality & CS:
Tariffs: Price
Industry
Leader model
Professional
The Lowest Price Actually, here is
strategy should be shown their brand
financed well ▲ ▲
positioning for the
enough. Price Leader Customer Focus launch campaign.
Namely finance Now it looks like
strength - the Low ◄ Market stimulation ► High
a change… May be
strongest point of Attempt to play on all fields at once: Arms Race and Indistinct reconsidered.
this given player. Positioning. For some reasons it’s a peculiarity of telecom dinosaurs.

11. DIALLOG Marketing Opportunities
1.1. Mobile Operators Positioning
Product Focus Innovator
Low ◄ Service development ► High ▼ ▼
Focus on
Product Variety
Innovations &
focus: Solutions
Promotions:
Provider model
Aggressor
Focus on
Focus on
Quality & CS:
Tariffs: Price
Industry
Leader model
Professional
▲ ▲
Price Leader Customer Focus
Low ◄ Market stimulation ► High

12. DIALLOG Marketing Opportunities
1.1. Mobile Operators Positioning
Product Focus Innovator
Low ◄ Service development ► High ▼ ▼
Focus on
Product Variety
Innovations &
focus: Solutions
Promotions:
Provider model
Aggressor
?
Focus on
Focus on
Quality & CS:
Tariffs: Price
Industry
Leader model
Professional
▲ ▲
Price Leader Customer Focus
Low ◄ Market stimulation ► High

13. DIALLOG Marketing Opportunities
WLL Operators Positioning

14. DIALLOG Marketing Opportunities
1.2. WLL Operators Positioning
Product Focus Innovator
Low ◄ Service development ► High ▼ ▼
Focus on
Product Variety
Innovations &
focus: Solutions
Promotions:
Provider model
Aggressor
Focus on
Focus on
Quality & CS:
Tariffs: Price
Industry
Leader model
Professional
▲ ▲
Price Leader Customer Focus
Low ◄ Market stimulation ► High

15. DIALLOG Marketing Opportunities
1.2. WLL Operators Positioning
Product Focus Innovator
Low ◄ Service development ► High ▼ ▼
Focus on
Product Variety
Innovations &
focus: Solutions
Promotions:
Provider model
Aggressor
?
Focus on
Focus on
Quality & CS:
Tariffs: Price
Industry
Leader model
Professional
▲ ▲
Price Leader Customer Focus
Low ◄ Market stimulation ► High

16. DIALLOG Marketing Opportunities

17. DIALLOG Marketing Opportunities
1.2. WLL Operators Positioning
Product Focus Innovator
Low ◄ Service development ► High ▼ ▼
Focus on
Product Variety
Innovations &
focus: Solutions
Promotions:
Provider model
Aggressor
Focus on
Focus on
Quality & CS:
Tariffs: Price
Industry
Leader model
Professional
▲ ▲
Price Leader Customer Focus
Low ◄ Market stimulation ► High

18. DIALLOG Marketing Opportunities
1.1. Mobile Operators Positioning
Product Focus Innovator
Low ◄ Service development ► High ▼ ▼
Focus on
Product Variety
Innovations &
focus: Solutions
Promotions:
Provider model
Aggressor
Focus on
Focus on
Quality & CS:
Tariffs: Price
Industry
Leader model
Professional
▲ ▲
Price Leader Customer Focus
Low ◄ Market stimulation ► High

19. Building a Strong DIALLOG Brand

20. DIALLOG Marketing Opportunities:
Transition to a Competitive Marketplace
Development Stages of Telecommunications Markets and Services
Stage II
Stage Stage II
Stage II Stage III
Stage III Stage IV
Stage IV Stage V
Stage V
Monopoly
Monopoly Pre-competition
Pre-competition Early Competition
Early Competition Competitive
Competitive Highly-Competitive
Highly-Competitive
4 Limited network
4 Limited network 4 Expanded network
4 Expanded network 4 Larger network
4 Larger network 4 Innovative pricing
4 Innovative pricing 4 New bandwidth
4 New bandwidth
capacity
capacity capacity based on
capacity based on capacity
capacity and packaging to
and packaging to demanding services
demanding services
legacy or technology
legacy or technology rebalance capacity
rebalance capacity putting pressure on
putting pressure on
4 Limited customer
4 Limited customer development
development 4 Customer base
4 Customer base surplus if applicable
surplus if applicable capacity again
capacity again
base
base below capacity
below capacity
4 Customer base at
4 Customer base at 4 Lower ARPU driving
4 Lower ARPU driving 4 Acquisition of new
4 Acquisition of new
4 High prices
4 High prices capacity in some
capacity in some 4 Proactive selling
4 Proactive selling cost reduction
cost reduction technologies to cope with
technologies to cope with
segments
segments demand
demand
4 Reactive and slow
4 Reactive and slow 4 Focus on marketing
4 Focus on marketing 4 Provision of full
4 Provision of full
processes
processes 4 Reactive selling
4 Reactive selling and value added
and value added managed solutions
managed solutions 4 New revenue stream
4 New revenue stream
services
services development
development
4 Limited skilled
4 Limited skilled 4 Focus on delivering
4 Focus on delivering 4 Full utilization of
4 Full utilization of
resources
resources basic services and
basic services and 4 Wide use of indirect
4 Wide use of indirect indirect sales
indirect sales 4 Convergence of Voice
4 Convergence of Voice
experiments with
experiments with sales channels
sales channels channels with
channels with and Data technologies
and Data technologies
4 Low efficiency
4 Low efficiency new technologies stimulus
new technologies stimulus
4 Customer retention
4 Customer retention 4 Highly sophisticated
4 Highly sophisticated
4 Resources beginning
4 Resources beginning becomes important
becomes important 4 Customer retention
4 Customer retention competitive intelligence
competitive intelligence
to develop skills
to develop skills essential
essential capabilities
capabilities
4 High margins
4 High margins
4 Low penetration
4 Low penetration 4 Competitor
4 Competitor 4 High focus on win-back
4 High focus on win-back
rates, especially in
rates, especially in intelligence becomes
intelligence becomes and customer loyalty
and customer loyalty
mobile and data
mobile and data important
important programs
programs
4 High margins
4 High margins
Source: Booz Allen Hamilton Analysis

21. Pakistan Telecom Landscape Overview
Competitive Environment
Network
quality
++ -+ -+ -- -+ --
Coverage
++ +- ++ ++ -- --
Customer
care
+- -- -- -- -+ ++
Products /
Services
-+ -+ ++ -- +- +-
International
expertise
+- -- -+ -+ -+ ++
Financial
strength
+- ++ -- -- ++ ++
Brand
Image
++ -+ -- -- -+ +-

22. Pakistan Telecom Landscape Overview
Market Segmentation
Private postpaid small and almost non-existent
Small but profitable (high ARPU) Corporate/SME segment
Relatively large emerging middle class segment
Market dominated by low-end, low-ARPU customers
Bulk of promising segments are largely untapped
(the most significant: females)

23. DIALLOG Marketing Opportunities:
Growth Shifts to Lower Income Segments
INCOME DISTRIBUTION
Subscriber growth
coming from low-end,
low-ARPU customers
markets
Share of population
High Upper mid Mid Low Very low
Income classes
Population
Potential for future Penetration

24. DIALLOG Marketing Opportunities:
Market Summary
• Innovators û 2%
• Early Adopters û 13 %
• Early Majority û 18 %
• Middle Majority û 33 %
• Conservative û 18%
• Non-Adopters û 16%

25. DIALLOG Marketing Opportunities: Market Summary
Low ◄ Customer base ► High
Mass Market: Followers / Late Adopters
Early Adopters/ Conservative
Pioneers
Innovators
Start ◄ Product Life Cycle ► End of Life

26. DIALLOG Marketing Opportunities: Market Summary
Type I:
Type I: Type II:
Type II: Type III:
Type III: Type IV:
Type IV:
Innovators
Innovators Early Adopters
Early Adopters Late Adopters
Late Adopters Conservative
Conservative
4Technology fascination
4Technology fascination 4“The coming thing”
4“The coming thing” 4Obvious solutions to
4Obvious solutions to 4Absolute need
4Absolute need
problems
problems
4Motivation -- Implement
4Motivation Implement 4Motivation -- leap frog
4Motivation leap frog 4Extreme
4Extreme
New Ideas
New Ideas the competition, prove
the competition, prove 4Motivation --social
4Motivation --social competition/social
competition/social
business
business pressure, fear of
pressure, fear of pressure
pressure
4Confidence Level High --
4Confidence Level High obsolescence
obsolescence
experiment, risk
experiment, risk 4Willing to try new things,
4Willing to try new things, 4Reluctant to change
4Reluctant to change
reasonable risk
reasonable risk 4No risk, slow to change,
4No risk, slow to change,
4Self taught,
4Self taught, needs references
needs references 4Will send someone to a
4Will send someone to a
independent
independent 4Innovation, better way
4Innovation, better way seminar, needs proof,
seminar, needs proof,
to do job, selective
to do job, selective 4Seminars, proven
4Seminars, proven ease of use
ease of use
4Latest technology, few
4Latest technology, few products, hand holding
products, hand holding
features, performance
features, performance 4Sold on benefits,
4Sold on benefits, 4Lowest cost,
4Lowest cost,
references, word of
references, word of 4Brand important, pay for
4Brand important, pay for competitive terms,
competitive terms,
4Self sold, when turned
4Self sold, when turned mouth
mouth needed features only,
needed features only, brand
brand
on, word of mouth
on, word of mouth terms & conditions
terms & conditions
important
important 4Productivity increases,
4Productivity increases,
fear
fear
4Examples, address
4Examples, address
cost/technical support
cost/technical support

27. DIALLOG Marketing Opportunities: Potentials
►Potential of synergy ► Significant
multinational
►High telecom experience
growth expectation of DIALLOG
team members
►Low market penetration in efficient CDMA
network enrollment,
►Relatively unsophisticated operations and
and underdeveloped market
marketing, reinforced
with local sales and
►Poor quality and scattering
of existing networks CS professionals.
►Positive macroeconomic environment
and state protection of investments
►Political stability and relative predictability

28. Pakistan Telecom Landscape Overview
Competitive Environment
Network quality ++ -+ -+ -- -+ --
Coverage ++ +- ++ ++ -- --
Customer care +- -- -- -- -+ ++
Products / Services -+ -+ ++ -- +- +-
International expertise +- -- -+ -+ -+ ++
Financial strength +- ++ -- -- ++ ++
Brand Image ++ -+ -- -- -+ +-

29. DIALLOG Marketing Opportunities: Success Factors
Efficient
Efficient
target
target
Attractive
Attractive segmentation
segmentation
products
products policy Support
Support
policy
&
& on a strong
on a strong
services
services brand
brand
portfolio
portfolio
Leveraging
Leveraging KEY
KEY High
High
DIALLOG
DIALLOG SUCCESS
SUCCESS network
network
team’s
team’s FACTORS
FACTORS quality
quality
experiences
experiences
Continuous
Continuous
Ensure
Ensure network
network
low
low High
High &&
cost
cost quality
quality coverage
coverage
operations
operations &
& expansion
expansion
efficient
efficient
customer
customer
service
service

30. Thank You!
BUT IT'S NOT THE FINAL ROUND…