16749883-Telenor-Final stratgies2134.docx

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Table of Contents

INTRODUCTION ............................................................................................................................................. 2

STRATEGY FORMULATION ............................................................................................................................ 4

VISION ....................................................................................................................................................... 4

MISSION .................................................................................................................................................... 4

VALUES ...................................................................................................................................................... 5

EXTERNAL ENVIRONMENT ........................................................................................................................ 5

INTERNAL ENVIRONMENT ........................................................................................................................ 7

LONG TERM OBJECTIVES ........................................................................................................................... 7

STRATEGIES ............................................................................................................................................... 9

STRATEGY IMPLEMENTATION..................................................................................................................... 10

OBJECTIVES ............................................................................................................................................. 10

POLICIES .................................................................................................................................................. 10

A STRATEGY SUPPORTIVE CULTURE ....................................................................................................... 11

HUMAN RESOURCE STRATEGIES ............................................................................................................ 13

DIVERSITY ................................................................................................................................................ 15

STRATEGY EVALUATION .............................................................................................................................. 16

FUTURE OUTLOOK ...................................................................................................................................... 22



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INTRODUCTION

Telenor Pakistan, a wholly owned subsidiary of Telenor ASA, launched its operations in March

2005. One of the leading telecom operators providing prepaid, postpaid and value-added services to

seven million customers, it is spread across the country with a network of 15 company-owned sales

and service centers, more than 200 franchisees and some 100,000 retail outlets selling subscriptions

and refills. Differentiated packages include TalkShawk, Telenor Persona and Djuice.

Telenor took a big step seven years ago when it decided to expand in international markets. The key

take points include: right time, targeting of emerging markets, policy of full management control

(avoided joint ventures) and deployment of a repeatable methodology (for example the djuice

brand). The success of the strategic focus can be understood from the following 1:

1 http://telecompk.net/2008/12/30/telenor-emerging-market-strategy-success-swot/

http://www.telenor.com/


http://telecompk.net/2008/12/30/telenor-emerging-market-strategy-success-swot/







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Telenor believes:

“ What matters most is the right strategy, at the right time and precision in execution.”



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STRATEGY FORMULATION

VISION2

MISSION3

Telenor's primary goal is to create greater value for our shareholders, customers, employees and

partners, and for society in general. We strive to be a driving force in creating, simplifying and

introducing communication and content solutions to the marketplace.

2 http://www.telenor.com.pk/about/visionValues.php

3 http://creativez.blogster.com/mission-statements-different

VISION:

WE'RE HERE TO HELP

We exist to help our customers get the full benefit of communications

services in their daily lives.

http://www.telenor.com.pk/about/visionValues.php



http://creativez.blogster.com/mission-statements-different







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VALUES4

EXTERNAL ENVIRONMENT

4 http://www.telenor.com.pk/about/visionValues.php

MAKE ITEASY

• We're practical. We don't complicate things. Everything we produce should be easy to understand and use. Because we never forget we're trying to make customers'lives easier.

KEEPPROMISES

•Everything we set out to do should work, or if it doesn't, we're here to help. We'reabout delivery, not over promising, actions not words.

BEINSPIRING

• We are creative. We strive to bring energy to the things we do. Everything weproduce should look good, modern and fresh. We are passionate about our businessand customers.

BERESPECT-

FUL

• We acknowledge and respect local cultures. We do not impose one formula worldwide. We want to be a part of local communities wherever we operate. Webelieve loyalty has to be earned.

POLITICAL

•Tax rates

•GovernmentRegulations

•PTA

•Special tariffs

ECONOMIC

•Level of disposableincome

•Consumptionpatterns

•Demand shifts

forgoods/services

•Incomedifferences byregion/customer

•Price fluctuations

•Tax rates

SOCIAL

•Per capitaincome

•Buying habits

•Ethical concerns

•Average level of education

•Governmentregulation

•Attitudes towardcustomer service

•Attitudes towardproduct quality

•Socialresponsibility

TECHNOLOGICAL

•Power cuts

•Fibre and opex

COMPETITVE







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SEGMENTATION

Market Segment Today Feature Year

Estimate

Existing Product Profitability

Youth/ Students 25% 27% Djuice, TalkShawk 29%

Women 10% 20% TalkShawk 21%

Financially

Constraint

40% 23% TalkShawk, Telenor

Azadi

20%

Corporate/ SME 25% 30% Postpaid Packages 30%

CPM

CPM Mobilink Warid Ufone Zong

Critical

Success Factor

Weight Rating Score Rating Score Rating Score Rating Score

Advertising 0.1 2 0.2 2 0.2 3 0.3 3 0.3

Product

Quality

0.15 2 0.3 2 0.3 3 0.45 3 0.45

Price

Competition

0.1 3 0.3 2 0.2 3 0.3 3 0.3

Management 0.1 3 0.3 2 0.2 4 0.4 3 0.3

Financial

Position

0.1 4 0.4 2 0.2 3 0.3 2 0.2

Customer

Loyalty

0.15 2 0.3 2 0.3 3 0.45 2 0.3

Global

Expansion

0.1 3 0.3 2 0.2 1 0.1 3 0.3

Market Share 0.2 4 0.8 2 0.4 3 0.6 2 0.4



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Total 1.0 2.90 2.00 2.90 2.55

The intense competition in the telecom industry has made it really difficult to survive the financial

crunch has added to the difficulties of the telecom service providers. The most important factors in

that need to be considered while making a strategic plan are customer loyalty which generally is

based on the quality of the service provided and this determines the market share of the firm.

Advertising is a double edge sword; good promotion attracts the customer while bad one distracts

them. In telecom industry a common practice is to eat compe titor’s market share by indulging into

price wars but one must set a limit otherwise it could backfire and sunk the company. Company

needs to plan all its operations depending on its financial health never ever pick up industry giants

for one on one fight and avoid taking leverage position instead go for the cost cutting strategy.

By looking at the matrix it is evident that Mobilink and Ufone are at the front while Warid is lagging

behind in competition. On the other hand Zong’s performance is average in industry.

INTERNAL ENVIRONMENT

LONG TERM OBJECTIVES

1. To deliver increased profitable growth

HUMAN CAPITALDIVISION

•PeopleExcellence &Business Process

Improvement•Organizational

Support Services

•Safety andSecurity

FINANCEDIVISION

•BusinessPlanning &Finance

•Procurement•Revenue

Assurance &FraudManagement

•Credit Control

•Accounts

•Treasury andFinancialOperations

•Audit andInternal Control

IT DIVISION

•Business SupportSystem

•IT Operations

•IT Security

TECHNICALDIVISION

•NetworkPlanning &Design

•Implementation•Operations &

Maintenance

•Real Estate &Site Acquisition

COMMERCIALDIVISION

•Sales &Distribution

•Marketing

•CustomerRelations

•Segments &Pricing

•Products &Platforms



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Telenor seeks to increase core mobile revenues. Telenor is also investing in adjacent markets such as

basic financial services and machine-to-machine (M2M) communication.

2. To strengthen our performance culture

Telenor will continue the successful practice of combining a local approach with global expertise.

This means that the local management teams will build a unique performance culture based on their

own initiatives and in line with the Telenor governance model, Codes of Conduct, vision and values

and people policy. In terms of Health, Safety and Environment (HSE), their objective is to improve

working conditions and environmental management by having clearly defined standards across the

operating company and supply chain.

3. To make responsible business a competitive advantage

Corporate responsibility at Telenor will be part of managing risk and linked to the core business.

Telenor has a strong track record when it comes to sustainable business: it was ranked top

performer by the Dow Jones Sustainability Indexes (DJSI) in 2007 and 2008.

4. To provide a superior customer experience

Faced with an increasingly competitive environment, Telenor needs to differentiate itself by

providing a superior customer experience. In the vision and core values, they put customer

experience at the top of the agenda. One of their ambitions is to reach a situation where end-users’

brand preference is higher than the Telenor market share.

5. To ensure best practice benchmarking

A global objective is to achieve a higher reduction in the average operational cost per minute than

the expected decline in average price per minute. Telenor aims to achieve considerable continued

growth in operating cash flow from its operations.

6. To drive change and constant renewal

To secure a strong industry position, innovation is paramount. Major areas identified are:

Their long-term ambition is to achieve the same position in broadband (mobile and fixed) as

they have in mobile voice today.



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Telenor aims to establish itself as a significant player in parts of the financial services

industry in select under-serviced markets, establishing a platform for long-term growth.

Telenor controls many valuable assets that can be further developed together with partners.

Partner-driven innovation is a cost-effective way to create many new revenue-generating services.

Objectives 2006-07 2015

ARPU(Average Revenue Per User) $4 $6- $8

Market Share in terms of Subscribers 10% 40%

Market Penetration 9% 30%

Market Share in terms of Revenue 7% 30%

EBITA(Earning before Interest, Tax

and amortization)

5% – 6% 10%

Unprompted Brand Awareness 20% 90%

STRATEGIES

Market Penetration

Diversification in new directions and regions

Focus on mobile internet

Acquiring a microfinance bank

Global expansion (Telenor has also entered the Indian market by taking a stake in Unitech

Wireless)

Mix of differentiation and low cost

Lower capital expense investment due to recession/ slow market growth

Utilize 3G technology opportunity



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STRATEGY IMPLEMENTATION

OBJECTIVESPrepaid- djuice, talks hawk

Post-paid- persona

Achieve a SIM penetration over 70%

Attain a market share above 25%

Maintain EBITDA in mid thirties

Obtain a ratio of Capex/sales below 25% Capital expenditure was related to network roll-

out to accommodate subscription growth and increased traffic

Increase Subscription growth

POLICIES

POLICIES

Telenor'scompetitiveness in themarket is based on goodproducts and services atthe right price. Alwaysmeet the group'scompetitors in an honestand professionalmanner.

Customers shall be metwith insight, respect andunderstanding.

Always try to fulfil theneeds of the customer inthe best possiblemanner, within theguidelines for CorporateResponsibility that applyto the business.

Customer's personalinformation shall beprotected in accordancewith the relevant laws

on protection of personal data.

Suppliers shall betreated impartially and justly. Suppliers incompetition forcontracts with Telenorshall at all times be ableto trust Telenor'sselection processes.When selecting suppliersfollow the group'sestablished guidelinesand routines at all times.

As an employee of Telenor you shall nothold another position orcarry out work for othersduring working hourswithout prior expresswritten permission fromyour superior.

Telenor is firmlyopposed to all forms of corruption.

Never offer or acceptillegal or inappropriatemonetary gifts or otherremuneration in order toachieve business orpersonal advantages foryourself or others.

Nor use agreements withmiddlemen to channelpayment to anyone insuch a way that may be

interpreted ascorruption.



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A STRATEGY SUPPORTIVE CULTURE

SOURCES OF CULTURE AT TELENOR PAKISTAN

PEOPLE

Telenor Pakistan consists of energetic, youthful and dedicated employees aged 27 to 28 on average.

An appropriate match is required between the culture and employees at recruitment and hiring. If

People Excellence (Human Resource Department) feels that a person will not be unable to adjust

into the organization’s environment, even if he/she is performing functionally well, the person is

rejected.

Primarily the culture comes from the top management. CEO of Telenor Pakistan is humble and

cooperative. The employees get the message that if the top management is so accommodating then

the employees should behave similarly. What is important to the CEO becomes important for

employees to identify completely with the organization. There are four foreigners in the top

management but this does not create communication barriers. They are extra humble to others while

individuals of a local origin are extra sensitive to them so no one feels alienated. The values of

humbleness and free interaction in putting forth ideas lead to a harmonious culture and efficient

communication. The management is easily accessible to discuss various issues. It is difficult to

distinguish between them as the culture is so homogeneous that it keeps every one at par with others

(no formal protocol is given).

ORGANIZATIONAL ETHICS

While making any decision, Telenor Pakistan has been ethically conscious. Since Telenor (the parent

company) has is origins in Norway, a society with a soft-oriented and feminine culture, Telenor

Pakistan acknowledges its moral and ethical duty towards its stakeholders and society. Telenor

Pakistan will not resort to bribery or illegal offers to accept any decision; values will not be

compromised to get licensed. If the organization believes it is not ethically right, it will never take

that decision.



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In most of advertisements they project themselves as the care taker of the values of Pakistani

people, so they claim to cherish the core cultural norms and values of the Pakistani people. When

the cartoon controversy arose, Telenor condemned such actions mocking religious beliefs and

portrayed this on their building.

ORGANIZATIONAL STRUCTURE

The organic structure of Telenor Pakistan promotes cultural values that result in integration and

coordination.

CEREMONIAL RITES AT TELENOR PAKISTAN

Type of Rite Instances of Rite Purpose of Rite

Rite of passage Orientation Sessions Learn and internalize values

Rite of integration Eid Milan Programs, Halloween Parties

and announcements of Telenor’s success

Build and reinforce common

values

Rite of enhancement Legends, Press Releases, Employee of the Year Rewards, Employee Promotion and

Rotation

Integrate and enhancecultural values

At Telenor, People Excellence reinforces the culture through the concept of a ‘LEGEND’ for

individuals who have performed outstandingly. These become role models for other people and

their examples are quoted on various occasions (forum or ceremonies), so every employee is

internally motivated to work harder.

The new recruits are given orientation sessions where they are made to familiarize with the values

and norms of the organization and how they can contribute to the organization even better. They



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are also provided with a Joining Book that comprises of the code of conduct and complete structure

of policies and values.

HUMAN RESOURCE STRATEGIES

The Human Resource at Telenor Pakistan is their core competency. The reason is that the

employees create a culture and all the achievements of Telenor are attributed to its flexible culture. It

is necessary to motivate and retain this asset of the organization. For this purpose, training and

compensation is provided to employees along with other motivational techniques.

TRAINING

The methods of training differ from function to function. On-the-job training is required in

the Customer Relationship Department (CRD) and similar system training in the IT

Department. Management Training Programs combine experiential learning with theory.

Leaders are chosen according to the following role expectations:

LEADERSHIP EXPECTATIONS FOR TELENOR PAKISTAN

Passion for Business

Empower People

IntegrityChange and

ConstantRenewal

OperationalEcellence

LEADERSHIP

EXPECTATIONS



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COMPENSATION

The core compensation includes:

Base salary

Bonus/commission

Long-term incentive plans

In addition, Telenor offers a total package that may include insurance, recreational activities

and other benefits adapted to the local market and individual employee’s need.

Managers are rewarded according to the achievement of assigned goals. Apart from

monetary rewards, such as variable pays/increments, other motivational tools such as

recognition (Employee of the Year rewards) are used.

CAREER GROWTH

Initially, qualifications are the defining criterion for fresh graduates. For career growth, the

right mix of performance on the job and performance potential for the other level is

imperative. Apart from the right attitude, knowledge also matters. If an individual from

Finance gets a higher degree, for instance, becomes a chartered accountant then the chances

of growth increase. There are no specific career paths: Vice President (VP) of Human

Capital Division (HCD) became the next Chief Marketing Officer (CMO).

EMPLOYEE MOTIVATION

Underperforming managers are encouraged through coaching and counseling by their

respective directors or the director of People Excellence. The turnover is not high as



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compared to that of the industry. There is no defined employee exchange program.

Employees performing exceptionally well are taken up to work in the Telenor Group.

Relocations are common in the organization: employees are transferred from People

Excellence to Finance or from Procurement to Customer Relations. Investment per

employee is placed at the higher end of the industry.

DIVERSITY

Telenor Pakistan is keen to promote diversity and has achieved good results in this area. Telenor has

developed requirements for diversity in both recruitment and our management development

programs. There is an appropriate blend of less seasoned and experienced employees. No quota has

been assigned; the best-fit candidate (according to the job requirements) is employed. At the office

level or call centers, even fresh graduates are apt but the director level requires a masters degree and

preferably some work experience.

Telenor Pakistan has a large proportion of females who are recruited for internal leadership

development programs and executive positions on the basis of past performance. The organization

is working on Day Care Centers to help female employees manage their responsibilities after settling

down. Relocation issues are dealt cooperatively when female individuals move out of the city after

marriage and wish to continue working. They are relocated and facilitated in the new city.



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STRATEGY EVALUATION

REENGINEERING: AFTERMATH OF FINANCIAL CRUNCH

Telenor has attained a competitive advantage in the market by aligning competences and strategies.

Highly motivated employees and flexible culture enables them to achieve an edge over competitors.

Improving our performance management

The Telenor Group aims to create a stronger link between the strategy process and performance

monitoring. All operating companies will implement a new and improved management model where

strategic objectives and ambitions are monitored closely at both the company level and the lower

department level.

Since its launch of services in March 2005, Telenor Pakistan has exceeded all expectations: It has

created the second largest mobile network and the largest and most advanced data network in the

local market, turned into the second highest revenue-generating mobile player with the highest

Average Revenue Per User (ARPU) in the market, and become the second largest mobile player in

the market with 18 million active subscriptions in little more than 3 years of operations. During the

first half of 2008, Telenor Pakistan added 3.24 million subscriptions against the industry average of

1.63 million, taking 33% of the market share of net additions over the period – the highest in the

mobile sector in Pakistan.

Service Quality&

Performancethrough asuperior

network design

Conveniencethrough thedistribution

setup

Simplicity and

trust through

pricingstructure andtransparency

Efficiencythrough

alignment of structure and

strategy

COMPETITIVE ADVANTAGES OF TELENOR PAKISTAN



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The company has created 2500 direct and more than 25000 indirect employment opportunities with

100,000+ retail outlets and 200+ franchises in addition. 99.9% of these employment opportunities

belong to Pakistanis.

Initiated with a relief effort worth 95 million rupees in the wake of the devastating earthquake of October 2005, Telenor Pakistan’s community contributions have extended over the years to include

education, empowerment, enterprise, and environment - with special focus on bringing the telecom

promise within the grasp of the most disadvantaged sections of the society.

Telenor Pakistan has received several awards for its solid performance in key areas of activities:

Federation of Pakistan Chambers of Commerce & Industry’s Telecom Excellence Award in

Foreign Direct Investment in June 2006

Central Board of Revenue’s High Tax Payer Award 2004-5 in January 2006

The Pakistan Society of Human Resource Management’s Preferred Graduate Employ er

Award for Most Preferred Telecommunications Company 2007 among MBA students

SAARC Communication Industry Conference 2007’s Most Innovative Mobile Operator

Award and Mobile Operator with the Most Consumer Pull Award

Telenor Global Brand Award for the year 2007

All Pakistan Dawn Aurora Advertising Awards in three of five nominated categories in

March 2007 The National Forum for Environment & Health’s Annual Environment Excellence Awards

2008

Lahore Chamber of Commerce & Industries’ Appreciation Award for the Largest FDI and

Rawalpindi Chamber of Commerce & Industries’ Achievement Award 2008

The Helpline Trust’s 2nd Corporate Social Responsibility Award 2008

Telenor Pakistan is committed to bringing true mobile innovation to the under-served masses of

Pakistan. The company has picked up two Universal Service Fund projects in order to provideconnectivity to the yet unconnected in the remotest areas of Pakistan. It aims to invest strongly for

further network expansion into the rural areas and for the rollout of third generation of mobile

technology (3G) in Pakistan.



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SWOT Analysis

An overall evaluation of Telenor’s Strengths (S) Weakness (W) Opportunities (O) and Threats (T)

are as follow:

Strengths

Network quality & design

Superior customer care

Financial Strength

Excellent Coverage & Distribution.

Commercial Launch of LDI & mobile services

Contract with Siemens & Nokia

Brand image of Quality

PTA initiatives

E-commerce usage.

Weaknesses

Relatively low market share

Low profit margins

Negative cash flows in the initial years

Opportunities

Favorable Macroeconomic indicators

low cellular market penetration

Inefficiency & poor performance of other mobile networks

Co branding e.g. Ufone with ABN AMRO



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Strategic Alliances & Infrastructure Sharing Facilities

International Mobile Equipment Identity System

Threats

Rolling Customers

Privatizations & deregulations- increased competitions.

Grey Traffic

MNP mobile number portability

Wireless technology at boom

Public pay phones & calling cards usage where network is not available

Propagandas attacking brand image

Strengths Weaknesses

Opportunities SO Strategies WO Strategies

Introducing 3G service

Make the post paid

package more attractive

Diversifying intosimilar industries e.g.

DSL services

More attractive pre-

paid packages

Threats ST Strategies WT Strategies

Co branding with

companies in other

industries e.g. Banks

Use other mediums of

promotion other than

conventional

advertising

Protect image through

constant CSR efforts

Capitalize and promote

EDGE technology



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BCG

Boston Consulting Group is used to help corporations with analyzing their business units or product

lines. This helps the company allocate resources and is used as an analytical tool in brand

marketing, product management, strategic management, and portfolio analysis.

This BCG matrix is with respect to the competition that exists for Telenor in the telecom industry.

This includes the following mobile operators:

Mobilink

Ufone

Warid

Zong



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The reason why all the companies are place in either question mark or star is that it is a growing

industry and overall the market share is increasing however individual players may not be doing well.

The reason why telenor and Ufone are placed in stars is that their relative market share is increasing

which is visible by their sales and ARPU. Mobilink although very old in the market is now losing itsrelative market share to both Ufone and Telenor. Mobilink is now investing in its brands and have

engaged in price wars to stay competitive and regain its market share.

Same is true for Warid and Zong, the only reason why they are placed in question mark is that the

overall industry is growing however their individual performance has been poor over the years.

Ufone has changed its strategic policies. It has gone through rebranding and emerged as a more

successful company.

Now if we talk about Telenor ,it has gained a favourable position in the industry through effective

advertising and packages. It can also be attributed to effective utilization of its Human Resource to

gain a competitive advantage in the in the industry.



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FUTURE OUTLOOK

Following can be the future plans of action that Telenor can pursue in order to ensure sustainable

growth:

Improve network quality to make it a sustainable competitive advantage

Develop an employee exchange program for enhanced employee motivation

Establish a coordination department/integrated IT system for effective communication

Introduction of employee stock options

Quota for the disabled people for greater CSR and diversity

Building an organization with competency, capabilities and resource strengths

Developing Technical Know How in Employees

Developing budgets to steer ample resources into critical value chain activities

Creating strategy supportive policies and procedures

Instituting best practices and a commitment to continuous improvement

Installing support systems and Value added Services

Maintain low cost

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