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Pakistan 2G 3G migration emerging market Challenges- business consultancy
The document outlines a consultancy proposal for Pakistani mobile network operators (MNOs) focusing on the transition to 3G technology amidst challenges such as market saturation, low average revenue per user (ARPU), and high spectrum costs. It provides an analysis of the telecom landscape, subscriber growth, and key market trends, while emphasizing the need for innovative customer engagement strategies and effective business planning. The report aims to offer insights into achieving business objectives through partnerships, value-driven services, and improved customer experiences.
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Pakistan 2G 3G migration emerging market Challenges- business consultancy
- 1. 3G Business Consultancyto Pakistan MNOs Transforming your business vision into reality Ahtesham Ahmed Ahtesham.ahmed@Hotmail.com Date: March 2014 Purpose: To give business consultancy to Pakistan MNO to 3G migration
- 2. Emerging PAKISTAN -Moving towards 3G Revolution Agenda Over View of Pakistan Telecom Market Evolution of 3G in Pakistan, Business Challenges & Driving Factors Adding Value to achieve business goals Peer Market Case Study • ITU • PTA • State Bank of Pak • ProPakistani • TRAI Data Sources • The World Bank
- 3. India Pakistan Indonesia China Bangladesh Russia Philippines Thailand Vietnam Egypt Iran Argentina Saudi Arabia SouthAfrica Poland S. Korea Turkey Nigeria Brazil Mexico Subscriber Growth (%) 2011 - 2016RevenueperaverageMoU&SMSUS$ GDP $ 524 Billion GDP Growth Rate 3.7 % Population 190 Million Urban Population 37 % Unemployment Rate 10.7% Population Below Poverty Line 22 % Literacy Rate 54.9% Competition Market: 5 Operators and foreign investors Flat Growth: Saturated market where Voice & SMS cannot promise upsell Quality & Price: Value for money is what drives this market Emerging Service: Technology driven innovation, market is still emerging Pakistan falls under Low Price & High Subscriber Growth cluster Price Vs Subscriber Growth- Emerging Telco Markets Emerging Market – Pakistan Communication Sector 0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 0 1 2 3 4 5 6 7 8 9 Author: Ahtesham.Ahmed@hotmail.com
- 4. 666 1158 1421 2585 2338 1230 909 359 212 422 2004 20052006 2007 2008 2009 2010 2011 2012 2013 Telecom Investment 278 489 899 1331 1821 2124 2360 2628 2985 3136 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Telecom Investment US $ Million Cellular Revenue US $ Million 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 2006 2007 2008 2009 2010 2011 2012 2013 Total Subscribers Growth 22% 40% 55% 58% 60% 65% 69% 74% 2006 2007 2008 2009 2010 2011 2012 2013 Tele Density Subscriber Growth Sub % Telecom Investment remained on the lower end but introduction of 3G will show an influx in foreign investment Cellular revenue grows upto USD$ 3136M with a growth of 5% compared to last fiscal year Tele density climbs upto 74% Mobile Subscription reached upto 132million. The market is saturated so the growth rate remains lower till 4% Key Trends – Revenue & Subscriber Growth 132 Million Mobile Subscriber Author: Ahtesham.Ahmed@hotmail.com
- 5. 0 50 100 150 200 250 300 2006 2007 20082009 2010 2011 2012 2013 Mobilink Ufone Zong Telenor Warid 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 2006 2007 2008 2009 2010 2011 2012 2013 Mobilink Ufone Zong Telenor Warid MNO Subscriber Base MNO ARPU PAK Rs Market Share Mobilink 30% Ufone 19% Zong 11% Telenor 28% Warid 12% Mobilink remains on TOP with 30% market share followed by Telenor. Both operators target high end users and corporate sector Zong is aggressive in terms of subscriber acquisition but with lowest ARPU Warid seems to be loosing the play in terms of market share and remaining with high end customer with less share Key Trends – MNO Dominance & ARPU ARPU $ 2 Author: Ahtesham.Ahmed@hotmail.com
- 6. 0.033 million Sub 0.57million Sub 1.15 million Sub 1.2 million Sub Broadband Subscriber by Technology Key Trends – Broadband Penetration 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 DSL HFC WiMax FTTH EvDO Others Broadband Sub Growth 56 44 41 59 FIXED(DSL, HFC, FTTH) WIRELESS(WIMAX, EVDO) 2012 2013 39% 22% 0% 18% 0% 11% 2% 7% 1% PTCL TeleCard Mytel WorldCall NTC Wateen Sharp/Qubee Wi-Tribe Link Direct Wireless Broadband Market Share Market share Fixed Vs Wireless 3 Million Broadband Subscriber 100% growth in last 4 years 0.00% 0.50% 1.00% 1.50% 2.00% 0 0.5 1 1.5 2 2.5 3 3.5 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total WLL Sub Million WLL Density Author: Ahtesham.Ahmed@hotmail.com
- 7. Internet Users Mob InternetUser 8% of the population access internet through mobile 30 million 15 Million Internet penetration is 16%70% Population under 30 years of age 8 -10% Smartphone Penetration 9 Million 2 Million 1.2 Million 1.4 Million Twitter breaks news in PakistanFamous Social Media in Pak Last million sub in just 45 days Pakistan is 10th Largest LinkedIn nation in the world 33% Access Fb via Smartphone Accessed through proxy since2012 Daily Motion is the alternate site Estimated online sales of USD $25million/year Over 50,000 online shipments • 11% of Population have formal Banking • 9% have mobile Banking Mobile Payment • 2.4 million account • 126% growth rate Entertainment TV seasons News Local news have highest ratings Sports Cricket and football is passion Non Existent • Mobile TV • Online Gaming • e-Govt • e-Health • e-Education Common communications platforms are popular Infographic Pakistan’s Digital Landscape People of Pakistan access internet for People who use internet 80% of them spend more than an hour online USD 467 Million cellular Mobile set import Author: Ahtesham.Ahmed@hotmail.com
- 8. Emerging PAKISTAN -Moving towards 3G Revolution Over View of Pakistan Telecom Market Evolution of 3G in Pakistan, Business Challenges & Driving Factors Adding Value to achieve business goals Peer Market Case Study Agenda
- 9. 15 9 32 4047 5070 50 44 50 35 70 71 150 80 150 150 40 14 100 50 70 120 60 60 Pakistan Indonesia India Philipines Thailand Egypt 450 850 900 1800 1900 2100 2300 0 0.5 1 1.5 2 2.5 3 3.5 Pakistan Indonesia India Philipines Thailand Egypt Pakistan 3G/4G Spectrum Auction Govt Expect to Raise $2 Billion + Postpaid / high end Customer Churn from non 3G operators specifically from urban area Chances of new market entrant seems slim from business perspective Auction price and which operators win the auction will determine the market dynamics Evolution of internet era in Pakistan Spectrum Auction ~ Driving towards Smarter Pakistan Spectrum Allocation Million Sub/MHz LOT-A LOT-B LOT-C LOT-D • One 3G spectrum of 10 MHz from 2100Mhz • One 4G spectrum of 10 MHz from 1800Mhz • One 3G spectrum of 10 MHz from 2100Mhz • One 4G spectrum of 10 MHz from 1800Mhz • One 3G spectrum of 5MHz from 2100Mhz Band • One 3G spectrum of 5MHz from 2100Mhz Band Author: Ahtesham.Ahmed@hotmail.com
- 10. Major challenges inmigrating to 3G High Spectrum Cost Low ARPU & ROI Market Maturity Time to Market & Good service Quality Value for Money - Product & Price Smartphone Penetration 3G spectrum cost will be high specifically in this economic condition. This cost will shape the future market Low GDP country and hyper competition market, ROI is slow 3G awareness, internet knowledge, literacy/education, value added with 3G all needs to be injected into the market Delivering the service to target market at the right time with good quality will remain a challenge Innovative products with value driven tariff will drive market dynamics 3G handsets are out of reach of a common man so just building the 3G network will not be enough Author: Ahtesham.Ahmed@hotmail.com
- 11. Key Pillars ofSuccess- Achieving Business Objectives Deep Market Understanding • Updated market insights • Competitive Analysis • Customer inclination and tendencies Effective Strategy & Planning • Business development plan • Customer acquisition strategy • Corporate sector planning Personalize customer engagements • Customer awareness • Cross-channel execution • Targeted campaigns Continuous evolution and dynamics • Trialed, adapted, scaled quickly • Flexibility, agility to reshape strategy and execution Innovative & Creative Products • Personalized for each customer • Catalogue of varied services that open new markets • Superior Service Quality Monetizing the content Cross industry partnerships (Banking, Media, Retail) Partnerships with Handset manufacturers & Content providers New Revenue streams from Enterprise and Corporate Sector Compete on Value not Volume Service Quality not Price Innovation & Content Focus on • Transform the market the way you want it to be • Deliver Value as your signature • Spread your wings and deliver in all verticals Author: Ahtesham.Ahmed@hotmail.com
- 12. Emerging PAKISTAN -Moving towards 3G Revolution Over View of Pakistan Telecom Market Evolution of 3G in Pakistan, Business Challenges & Driving Factors Adding Value to achieve business goals Peer Market Case Study Agenda
- 13. Transformation Driving BusinessObjectives Largest Coverage Leading Sub base Loyal Postpaid symbol Corporate influence Insights Analytics Leading Innovation Targeted Campaigns Customer Centric Approach New business Model Partnerships SIM’s/user 2 Innovation will drive customer focus Ultimate Customer experience will converge brand loyalty Data Sims/user will be 1 Cemented Platform Transformation Initiatives Author: Ahtesham.Ahmed@hotmail.com
- 14. Readiness Planning Revenue Generation, Profitability, Sales 3G Launch Business Objectives BusinessConsultancy (High Level SoW) Area of Focus Inputs to Business Model Business Outcomes Maturity Assessment (Internal) - Organizational realignment recommendations reports - Cross department synergy recommendations - SOP Development/Improvement inline with IBP - Skill enhancement recommendations - 3G Synergy Group - Operational readiness for 3G launch - Workforce readiness for expected/unexpected challenges - Proactive vs Reactive - Shift focus from network to Service & Customer Maturity Assessment (Market) - Subscriber accessibility & affordability analysis - Geographical market maturity assessment - MNO vs Competition SWOT Analysis (Strength, Weaknesses, Opportunities & Threats) - Risk mitigation - Planning aligned with realities - Meet customer expectations 2G to 3G Migration in alignment with Business Objectives - Geographical 3G Launch plan - Quick wins vs long term stability reports - Market share strategy - Business partner ecosystem - Service packaging, tariffs & innovation - Service/Customer centric packages - 2G continuation plan - Focused launch - Realistic expectations - Quick Return on Investment VAS, Packaging, Tariffs - Competitive Analysis - Personalized packaging & tariffs based on Market segmentation & subscriber profiling - Corporate Services & Packages - Customer aligned marketing with focus on new revenue streams - Innovative products - Competitive differentiation New Customers, Campaigns & Marketing - Market development plan - New customer acquisition strategy - Transition to personalized campaigns - Long-term/Short term marketing strategy - Overachieve Revenue & Profitability . targets New partnerships - Cross industry partnerships (Banking, Retail) - SmartPhone Vendors partnership reports - Content Providers - New avenues to generate revenue - Be a technology enabler in the region - Revenue growth from corporate sector - Grow & take others along Innovation - New technologies & adoption strategy - Market leadership through innovation Author: Ahtesham.Ahmed@hotmail.com
- 15. Emerging PAKISTAN -Moving towards 3G Revolution Over View of Pakistan Telecom Market Evolution of 3G in Pakistan, Business Challenges & Driving Factors Adding Value to achieve business goals Peer Market Case Study Agenda
- 16. 261 391 584 811 91986726% 40% 53% 71% 79% 73% 0% 20% 40% 60% 80% 100% 0 200 400 600 800 1000 2008 2009 2010 2011 2012 2013 Wireless Sub in Million Teledensity Wireless Sub & Tele density MillionSub Operator 3G Active Sub in Million Data ARPU Bharti Airtel 6.4 $ 0.92 Vodafone India 3.3 $ 0.92 Idea Cellular 5.1 $ 0.95 Reliance Communication 7.2 Jun 12 44 70 85 103 126 153 4 21 25 27 29 32 48 91 110 130 155 185 0 20 40 60 80 100 120 140 160 180 200 Urban Rural Total Mobile Internet Users Million Jun 13 Oct 13 Dec 13 Mar 14 Jun 14 10% smartphone users • 51% access internet from mobile • 58% Y-O-Y growth of Rural internet users • Facebook 90 Million • Twitter 33 Million • LinkedIn 18 Million • Subscriber base was inclined toward internet but 3G penetration was low due to affordability • 3G capable handsets cost dropped from US$ 180(2011) to US$ 100(2013) • Data Market is now gaining pace with e-Commerce , e-Health & e-Govt Emerging Market –Indian Communication Sector ARPU $ 1.8 1.2 Billion population 867 Million Mobile Sub Struggling with 3G growth Author: Ahtesham.Ahmed@hotmail.com
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