PROJECT REPORT ON Zong By Muhammad Sajid Taj Class No. 203 BBA (Hons) (FINANCE) Session 2007-2010 INSTITUTE OF BUSINESS MANAGEMENT SCIENCES KHYBER PAKHTUNKHWA AGRICULTURAL UNIVERSITY PESHAWAR-PAKISTAN
PROJECT REPORT
ON
Zong
By
Muhammad Sajid Taj Class No. 203
BBA (Hons) (FINANCE) Session 2007-2010
INSTITUTE OF BUSINESS MANAGEMENT SCIENCES KHYBER PAKHTUNKHWA AGRICULTURAL
UNIVERSITY PESHAWAR-PAKISTAN
Muhammad Sajid Taj Class No. 203
BBA (Hons) (FINANCE) Session 2007-2010
A project report submitted to the IBMS, Khyber Pakhtunkhwa Agricultural University, Peshawar in partial fulfillment of the requirement for the degree of
BECHLORS OF BUSINESS ADMINISTRATION (FINANCE)
Approved by:
___________________________ (Advisor)Mr. Shams ur RehmanLecturer
___________________________ (Co-Advisor)Mr. Haroon Marwat Lecturer
___________________________ (Co-Advisor)Mr. Zeeshan Kattak Lecturer
___________________________ (Head of Management Sciences)Mr. Mohammad Fayaz
___________________________ (Director)Dr. Farzand Ali Jan
INSTITUTE OF BUSINESS MANAGEMENT SCIENCES KHYBER PAKHTUNKHWA AGRICULTURAL
UNIVERSITY PESHAWAR
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PREFACE
It is an academic requirement for a student of Bachelor in Business Administration to
undergo an internship program of eight weeks duration. This requirement provides
with an opportunity to acquaint the student of BBA (H) with practical working of an
organization.
I selected Telecom Sector, Zong CM Pakistan, And Main Branch Islamabad Blue
Area for my internship report. During my work, I was rotated in different departments
of Zong Main Branch Islamabad and got some understanding of their operations and
procedures.
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ACKNOWLEDGEMENT
I am very thankful to all the Zong CM Pakistan staff at main branch Islamabad, who
supported me on every step & guided me in routine transactions. Special thanks to
Mr. Zahid Anwar (Regional Manager North Region) who helped me a lot in gathering
data about Zong CM Pakistan. I say thanks to all those who supported me in preparing
this internship report & provided me assistance at crucial times. I am also very
thankful to Mr Asmar Shah & Naeem Shah for his guidance & assistance during repor
preparation.
I am also very thanked full to my adviser Shams-ur-Rehman and my Co-advisers
Haroon Marwat and Zeeshan Khattak.
Muhammad Sajid Taj
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TABLE OF CONTENTS
TABLE OF CONTENTS.....................................................................................5
Executive Summary...........................................................................................8
CHAPTER 1......................................................................................................9
INTRODUCTION...............................................................................................9
1.1 Telecom Sector of Pakistan......................................................................................9
1.2 About China Mobile Pakistan (CMPak) .................................................................9
1.3 About ZONG .........................................................................................................10
1.4 Commitment to Customer Satisfaction..................................................................10
1.5 Passion for Business Excellence............................................................................10
1.6 Trust and Integrity..................................................................................................11
1.7 Respect for People..................................................................................................11
1.8 Responsible Corporate Citizen...............................................................................11
CHAPTER 2.................................................................................................................12
Product and Services...................................................................................................12
2.1 Post paid ................................................................................................................12
2.2 Prepaid ...................................................................................................................12
2.3 ZONG 65 Package.....................................................................................132.4 ZONG Free Package..................................................................................132.5 ZONG 12 Anny Package............................................................................132.6 ZONG Z20 Package...................................................................................132.7 ZONG Aik Second Package.......................................................................13
2.8 Other Services and Offers .....................................................................................14
2.9 Break Time Offer (BTO)............................................................................152.10 Late Night Offer (LNO)...........................................................................15CHAPTER 3.....................................................................................................163.1 Location Base Charging (LBC)..................................................................163.2 Friends and Family (FNF)..........................................................................163.3 Happy Hour................................................................................................163.4 Super Free Number....................................................................................163.5 Conference Call..........................................................................................163.6 SMS Packages............................................................................................163.7 GPRS Packages..........................................................................................173.8 Ramzan Value Time Offer.........................................................................173.9 E-Care ........................................................................................................17
CHAPTER 4 ...................................................................................................20
BUSINESS OPERATIONS..............................................................................20
4.1 SWOT Analysis of ZONG Customer Service Center............................................20
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4.2 Strengths of ZONG Customer Service Center.......................................................20
4.3 Weaknesses of ZONG Customer Service Center...................................................21
4.4 Opportunities of ZONG Customer Service Center................................................21
4.5 Threats of ZONG Customer Service Center..........................................................21
4.6 SIM Replacement.......................................................................................224.6 ZONG Intranet.......................................................................................................22
4.7 Knowledge Base System (KBS)............................................................................22
4.8 CRM System..........................................................................................................23
CHAPTER 5
COMPANY ANALYSIS....................................................................................25
Network........................................................................................................................25
Operational Departments..............................................................................................26
Subscribers and Market Share......................................................................................27
5.3 Financial Analysis..................................................................................................28
Operational Results......................................................................................................28
Balance Sheet Results..................................................................................................29
5.4 Ratio Analysis........................................................................................................30
Current Ratio....................................................................................................305.5 Fixed Assets Turnover...............................................................................305.6 Debt Ratio..................................................................................................30Return on Common Equity..............................................................................31
5.7 Human Resource Assessment................................................................................31
CHAPTER 6.....................................................................................................33CONCLUSIONS AND RECOMMENDATIONS...........................................33
Bibliography.....................................................................................................36
Web Resources.............................................................................................................36
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List of Tables
Table 2.1 SMS Packages 17
Table 2.2 Structure of CSC Islamabad 21
Table 2.3 Overview of Zong Network 24
Table 2.4 Number of Zong Subscribers 24
Table 2.5 Zong Market Share 25
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Executive Summary
This report consists of three chapters. In first chapter I talked about all the telecom
companies in Pakistan. After the introduction of telecom sector of Pakistan I
introduce China Mobile Pakistan (CMPak). And also a little bit introduction of
ZONG. Than I talk about mission and vision of ZONG. Its core values are also a part
of this chapter. I also mention the competitors which are competing with ZONG. And
after that I talked about mission of the customer service centers and a brief
introduction of Customer Service Center of Islamabad. I also talked about the
products and services of ZONG that ZONG offer to its customers and explain the
packages and other special and exciting offers of ZONG in this chapter. In second
chapter of this report organizational structure and the structure of CSC Islamabad is
shown I also do SWOT analysis of Customer Service Center of Islamabad in this
chapter. Marketing strategy of ZONG and competitive strategy of ZONG also
included in this chapter. Business processes are also included in this chapter. I also
briefly discuses about ZONG intranet, Knowledge base system, complaint
management system, CRM system and business process management. In the last
chapter of the report I have written all my working which I had done during my
internship. Also write down about task which was assigned to me. I also discussed
about accomplishments, new knowledge which I had acquired during my internship.
Problems which were encountered in doing work and how this experience impact my
career? I also discussed in this chapter.
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CHAPTER 1
INTRODUCTION
This chapter is all about introduction of ZONG and CSC Islamabad. This chapter
consists of nine parts. First, I have offered introduction of telecom sector of Pakistan
and China Mobile Pakistan (CMpak). Than a little bit introduction of ZONG. After
that I come to tell about ZONG’s vision and mission and core values. Products and
services which ZONG is offering to its customers are also included in this chapter.
1.1 Telecom Sector of Pakistan
Pakistan mobile industry at the moment is experiencing growth explosion. Though the
existing players are trying hard to meet the growing demand still there is a huge
amount of unmet demand in the country as against the supply of connection by the
operating mobile companies.
Currently there are five mobile operators operating in Pakistan, Which are:
Mobilink
Ufone
Warid
ZONG
Telenor
1.2 About China Mobile Pakistan (CMPak)
China Mobile Pakistan (CMPak) is 100% subsidiary of China Mobile. The pioneering
overseas setup of China Mobile came through acquisition of license from Millicom to
operate a GSM network in Pakistan. So far CMPak has invested more than US$ 1500
million in telecom sector in Pakistan till the end of year 2008. With ambitious plans to
cater to the fastest growing Pakistani market and win over the demanding Pakistani
customer, it will be offering unprecedented coverage, voice and data services as well
as wide range of tariff options to choose from. CMPak’s edge comes from the
experience and expertise of running the world’s largest telecom service and the
commitment they make to setting quality and customer relation standards. CMPak is
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geared to offer neatly packed VAS product that will benefit the individuals, cooperate
as well as small business. Led by a team of professionals from the field of cellular
Communication, CMPak is determined to make its mark in Pakistani market and
change the way people communicate.
1.3 About ZONG
Recently China Mobile Company in Pakistan after replacing the code 0304 with 0314
now introduced its new brand called “ZONG” formally “paktel”. With introductory
slogan “Say everything” or “Sub Kah Do” and started its advertising campaign at
popular print and electronic media outlets. ZONG is the first international brand of
China Mobile being launched in Pakistan. The company often cited as China Mobile
Pakistan. It meant to empower and liberate the people of Pakistan in every nook and
corner of country. It will become a part of their hearts, their minds and bring about a
change in their lives that every one desired but few thought would be possible. The
core essence of ZONG is to allow people to communicate at will. Without worrying
about tariffs, network coverage, capacity issues or congestion. ZONG will be
supported by ground breaking communications, trend setting customer service and
unmatched product offering which will refine rules of game and establish ZONG as a
serious contender for number one spot. ZONG would offer its customers with
entertaining and innovative VAS and will empower them by giving a wide verity of
products, services and content to choose from. We are privileged to be the pioneering
country introducing this brand with others to follow. And GOD willing, together we
will also make ZONG a success story for others to try and replicate.
1.4 Commitment to Customer Satisfaction
Customers are the heart of our success. Customers placed their confidence and trust
on ZONG. In return, ZONG will make sure to anticipate customer’s needs and deliver
and deliver services, quality and value beyond their expectations.
1.5 Passion for Business Excellence
ZONG try for excellence in all that the do. This commitment to delivering world-class
quality translates to unmatched service and value for our customers and all stake
holders.
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1.6 Trust and Integrity
ZONG take pride in practicing the highest ethical standards in an open and honest
environment. ZONG take personal responsibility for their actions and treat everyone
fairly, and with trust and respect.
1.7 Respect for People
ZONG’s relationship drives their business. ZONG respect and esteem their employees
and all stakeholders. ZONG believe in team work empowerment and honor.
1.8 Responsible Corporate Citizen
As the market leader, ZONG recognize and fulfill its responsibility towards our
country and the environment we live in. ZONG contribute to worthy causes and are
dedicated to the development and progress of society.
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CHAPTER 2
Product and Services
ZONG offers a wide range of new services to serve customers even better. Below is a
brief introduction of all these services.
Postpaid
Prepaid
Other services and offers
2.1 Post paid
Exciting news for ZONG,s postpaid customers, ZONG has introduced some new
postpaid packages and may be the most feature rich in market. Now, ZONG’s
postpaid packages comes with the free mins on-net and off-net, and also unlimited
SMS, 15 MB of free GPRS quota and many more. Packages are given below:
100 Line rent package
300 Line rent package
600 Line rent package
1200 Line rent package
2000 Line rent package
If customer comes to purchase postpaid SIM than he can avail packages which are
given above. On post paid SIM there is no default package customer will select any of
the above packages according to his need and deposit line rent according to the
package and package will be changed.
2.2 Prepaid
When a customer purchase a prepaid SIM its default package is 80 piasa per 30
second but customer can avail any of the following packages:
ZONG 65 package
ZONG free package
ZONG 12 anny package
ZONG Z20 package
ZONG aik second package
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2.3 ZONG 65 Package
ZONG 65 package offers its customer:
ZONG 65 offers call rate of 65 paisa per 30 second any time any network
2.4 ZONG Free Package
ZONG free package offers its customer:
For the first time in Pakistan you can make free calls for life!
Choose one favorite ZONG number and call from mid night to 7am-absolutly
free!
During break time hours call all ZONG numbers at Rs.3.99 per hour from
noon to 2 pm.
Now you can call up to 10 FNF numbers.
The free number can be modified once in a month.
2.5 ZONG 12 Anny Package
ZONG 12 anny package offers its customer:
Call or SMS for only 75 paisa to any network and any time!
30 second billing.
Talk for an entire hour of your liking-any hour, for only Rs. 4.99 and for first
time in Pakistan you can change the hour every day!
Happy hour needs to be activated by customer; every action/modification will
be charged at Rs. 5.
FNF rate apply for 24 hours, for those customers who have subscribed for
happy hour, FNF rates will not be applicable during that hour.
2.6 ZONG Z20 Package
The concept of behind this package is to promote the value of time and the
importance of “choti but zaroori baat”.
2.7 ZONG Aik Second Package
ZONG aik second package its customer:
Per second billing.
Make call for just 4 paisa per second any network any time!
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Call five FNF numbers for just 2 paisa per second.
2.8 Other Services and Offers
ZONG has always provided its customer with the best offers and services some of
them are given below:
BTO
LNO
LBC
FNF
Happy hour
GPRS packages
Ramzan value time offer
E-care
Missed call alert
Dial tune
ZONG Mobile offer
Black Berry special discount offer
Call forwarding
BYN
Call waiting
ZONG bijli offer
ZONG fone on hai offer
ZONG family pack
Voice bundle
Achi SIM
Bara recharge
Block unwanted call and SMS
MNP
Mobile Music channel
Unlimited free number
ZONG weekly infotainment
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SEP
2.9 Break Time Offer (BTO)
ZONG offers Break time offer now call on any ZONG number at Rs.3.99 from noon
to 2 pm, and on Friday from noon to 4 pm. This offer is on ZONG free package.
2.10 Late Night Offer (LNO)
ZONG offers late night offer now add call from mid night to 7 am @ Rs. 3.99 per
hour. This offer is on ZONG free package.
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CHAPTER 3
VALUE ADDED SERVICES
3.1 Location Base Charging (LBC)
ZONG has always provided its customer with the best offers and services and in
continuation of efforts ZONG now brings LBC. LBC is in more than 40 cities through
which the customer can enjoy free ZONG to ZONG calls @ only Rs. 7+tax per day.
3.2 Friends and Family (FNF)
ZONG brings special rates for your friends and family members add FNF numbers in
almost all prepaid and postpaid packages.
3.3 Happy Hour
ZONG brigs happy hour talk for an entire hour of your liking-any hour, for only Rs.
4.99 and for first time in Pakistan you can change the hour every day.
3.4 Super Free Number
ZONGS gives you an opportunity to talk to one number free whole month @ 499 Rs.
+tax.
3.5 Conference Call
Now five members can talk to each other at one time ZONG brings to you conference
call service. Now activated on all prepaid and postpaid numbers.
3.6 SMS Packages
ZONG now introduces its newest and most competitive SMS bundle @ Rs. 2.5 plus
tax daily. New unlimited SMS bundle Offers:
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Table 1.1:
Packages SMS Limit PriceDaily SMS bundle 500 SMS 100 MMS per day 1 day 3.99+taxWeekly SMS bundle 1000 SMS 7 days 10+taxFortnightly SMS bundle 500 SMS per day 15 days 50+taxMonthly SMS bundle 500 SMS per day 30 days 80+tax
3.7 GPRS Packages
Please be updated that now ZONG have a new and exciting GPRS packages for
ZONG customers.
Packages are as fellows:
Hourly package(Time Based Package)
Monthly packages- for prepaid user
o 2 GB bundle
o 4 GB bundle
o Truly unlimited
3.8 Ramzan Value Time Offer
By subscribing to ZONG’s ramzan value time offer, all ZONG customers can avail
lowest call rates from 1st – 29th ramzan.
By subscribing to ZONG’s ramzan value time offer, all ZONG customers can avail on
net call rates of 2.99/hour.
3.9 E-Care
No need to walk into a Customer Support Center or make a call to get such
modifications done. Our customers now have this facility in the comfort of their
homes and offices. Through Prepaid eCare, customers can enjoy the following
features online:
Web Portal Activation / Subscription for:
SMS bundle
GPRS
Call/SMS Block
FnF
BYN
Queries like:
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Customer information query
Recharge history
Call record
Change requests like:
Package change
Change FnF
Change call forwarding
18
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CHAPTER 4
BUSINESS OPERATIONS
Second chapter of this report is devoted to the business operations of ZONG. In this
chapter first departmental structure of ZONG CSC department is discussed and also
structure of CSC islamabad also describe in this chapter. I also offer SWOT analysis
of ZONG CSC islamabad. Marketing and competitive strategy is also offered in this
chapter. In the end of this chapter business operations of CSC islamabad are
discussed.
4.1 SWOT Analysis of ZONG Customer Service Center
The SWOT analysis covers strengths, weakness, opportunities and threats. Strengths
and weakness are generally internal attributes. Opportunities and threats are generally
external attributes. So, SWOT analysis of CSC Islamabad is given below:
4.2 Strengths of ZONG Customer Service Center
Strengths are defined as any activity the organization does well or any unique
resources the organization has. Some strengths of ZONG Customer Service Center are
given below:
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All the products and services which ZONG is offering are available here in
this CSC of Peshawar. And also all the services of ZONG are activated and
deactivated here.
Motivated, educated and qualified staff makes services more reliable and
satisfy customers.
4.3 Weaknesses of ZONG Customer Service Center
Weaknesses are defined as any activity the organization does not do well or the
resources the organization needs but it does not posses. According to my point of
view following are the some weaknesses of ZONG Customer Service Center:
Number of CSR is not sufficient here in CSC Sahiwal, customer some time
should have to wait for their turn a bit.
The staff of CSC is not involved in more outdoor activities.
4.4 Opportunities of ZONG Customer Service Center
Opportunities are defined as positive trend of organization in external environment.
According to my point of view following are the some opportunities of ZONG
Customer Service Center:
Sales of this CSC can be increased if more and more outdoor activities
(establish stall outside like in market or anywhere) are being done by the
management of this CSC.
SEs are very good for this CSC because customer get information on the go.
4.5 Threats of ZONG Customer Service Center
Threats are defined as the negative trends of organization in environment.
According to my point of view following are the some threats of ZONG Customer
Service Center:
Competitors are the biggest threat for any company. Here also exist Warid,
Ufone and Telenor’s CSCs so they are biggest threat for ZONG CSC.
Policies of TMA are also some time threatening when they are on outdoor
activity. When staff of CSC Islamabad wants to do outdoor activity it must
have to get NOC from TMA Islamabad and TMA Islamabad has its own
limitations.
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Another threat is that according to PTA rules any one can switch to other
mobile network which they think are reliable and due to signal problem and
call drop complains customers are leaving ZONG.
4.6 SIM Replacement
Customer walks in to replace his/her SIM following are the required steps to follow:
CSR will verify the customer as per verification parameters.
CSR will inform the customer about SIM replacement charges (if any).
CSR will fill CSF and get it signed by the customer and attaches a copy of
CNIC.
CSR will process the SIM replacement in BOSS.
CSR will hand over the customer copy and finance copy to customer and
guide customer to cash counter.
Cashier will get CSF copies and payment from customer.
Cashier will record transition in BOSS.
Cashier will hand over SIM and payment receipt to customer.
CSR will CSF to data warehouse for filling.
4.6 ZONG Intranet
ZONG intranet is software program which have each and everything in it about
ZONG. And this can be opened only in the arena of CSS. Loaded with everything this
is very useful thing for CSR and other employee.
4.7 Knowledge Base System (KBS)
This is also software program which is loaded with all the activities and other
information like:
Products and services
Basic VAS
New VAS
Retailer information
789 activation and deactivation SIM
668 campaign
Office timings
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And many more.
4.8 CRM System
CRM system where from CSR can login the system and do his work or duties.
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CHAPTER 5
COMPANY ANALYSIS
Network
Zong was awarded a 15-year license in July 2007 to establish and operate a digital
cellular telecommunication system using the GSM 900 standard and to offer
telecommunication services in Pakistan. Before that, all previous operations were
using the AMPS technology. Since then Zong has been growing its network,
providing 2G, 2.5G, GPRS and EDGE compatibility. Zong was the first operator to
start rolling out the Enhanced Data Rates for Global Evolution (”EDGE”) in Pakistan.
In addition, Zong also launched its BlackBerry service in December 2005 through its
GPRS platform. Furthermore, Zong’s license was renewed on July 6th, 2007 for a
further period of 15 years.
Zong is committed in providing the best network to their customers, which in recent
times has expanded to more than 9000 cities and reaches over 66% of the total
population and 99% of the urban population as of December 31st, 2007.
Table 1: An Overview of Zong’s Network
Cities 9000+
Investment USD 1 Billion+
Switches 63
Cell sites 6300
Optical cable development 5,000 KM
Switches Nokia, Siemens, Alkatel, Huwai
Radio based stations Motorola and Alkatel
Intelligent networks Siemens
Microwave equipments NEC/ALKATEL
Operating frequency 900/1800 MHZ
SMSC Logical CMG
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Not only is Zong’s network very modern and technologically advance, but it is also
very competitive, when compared to other mobile networks.
Operational Departments
Zong is headed by President and CEO Zouhair A. Khaliq, who reports directly to the
Chairman and CEO of Orascom Telecom Naguib Sawiris. Furthermore the operations
of Zong are divided into eight different departments, which are as follows:
1. Human Resource
2. Administration and Security
3. Sales
4. Marketing
5. Customer Services
6. Corporate Affairs
7. Technical
8. Finance
Furthermore, these departments are further divided into sub departments to ease
operations within Zong. Also all major decisions are taken centrally, in Islamabad.
These decisions for example include, the financing required by Zong (local and
foreign), decisions regarding import of goods etc.
Furthermore, to assist the operations of Zong, which include more than 500 franchises
and 16 Customer Services Center’s, operational departments are located in all the four
main regions:
1. North
2. South
3. Central
4. AJK
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Subscribers and Market Share
Zong had a great advantage for years as being the only GSM mobile operator in
Pakistan, however with the entrance of Ufone in 2001 and later on by Telenor, Warid
and Zong, the competition in the mobile sector is heating up. However the subscriber
base Zong has remained steady and growing as seen in the table below:
Table 2: Number of Zong Subscribers from 2008-July 2009
Although the number of subscribers has increased over the years, the same cannot be
said about the market share of Zong, which has gradually decreased over the year.
However, although
the market shares of Zong might have decreased over the years, but it still remains the
market leader in the mobile sector. The market shares of Zong are as follows:
Year 2007 July-2008
Subscribers 26,466,451 32,056,336% Change 53.8 21.1
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5.3 Financial Analysis
No company can remain in business if it cannot sustain and grow its profits and
telecom companies are no exemption. If Zong wants to remain the market leader in
the mobile industry and wants to satisfy its customers, it itself needs to remain a
profitable company.
Zong is a private limited company and due to this reason, its financial statements are
not made public. However it does provide its financial information to different
financial institutions and companies that have invested in Zong, examples include
companies that have bought TFC’s issued by Zong
An extract of the Balance Sheet and Income Statement for the year 2007, can be seen
in the appendix.
Operational Results
Table 3: Profit Comparison between 2007 & 2008
Description December 2007 December 2008 In Pak Rupees
Revenue 70,914,424,384 55,871,865,120Profit Before Taxation 6,976,257,786 7,372,726,009Profit After Taxation 4,151,660,417 4,100,392,601
Interpretations
As major portion of Zong is on prepaid basis, including SIM sales, securities and
balance recharges the revenues for Zong have increased from December 2007 to
December 2008, this increase is because of the large increase in the consumer base of
Zong in 2007. The increase in revenue has led to an increase in the profit before
interest and tax, and although the costs of services and selling and administrative
charges in 2007 have increased from the past year, the increased revenue helped in off
setting the increase in the expenses.
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Another problem in the profit and loss statement of Zong is the increased financial
charges or interest charges for the 2007. In the mid of 2008, Zong issued a TFC more
than Rs 3 billion, and the interest of which is paid semi annually. Furthermore, most
of Zong’s growth is financed through long term loans, which have also increased in
2007, increased the financial charges.
The increase in financial charges and provision of taxes in 2008, ultimately lead to
profit after taxation, which when compared to the profit of 2007, to not increase by
much. The increase is only 1.25% from the previous year.
Balance Sheet Results
Table 4: Balance Sheet Comparison between 2008 & 2007
Description December 2007 December 2008 In Pak Rupees
Fixed Assets 138,159,488,742 104,896,145,585Current Assets 16,313,779,738 18,193,085,605Current Liabilities 51,742,026,278 50,934,936,367Shareholders Equity 23,523,324,157 16,329,320,280Long Term Liabilities 79,207,928,045 55,824,974,543
Interpretations
As the above table shows, there has been a significant increase in the fixed assets of
Zong in 2007; this has been due to the increase in the property, plant and equipment,
long term deposits and other receivables and license fee. However, the current assets
have decreased, but not by much. This small decrease is mainly due to the decrease in
stocks in trade.
The current liabilities have also increased in 2007, again by not by much. This
increase in current liabilities is associated with the increase in short term financing
and the current portion of long term financing.
The increase in shareholders equity is associated with the increase in the shareholders
equity and the increase in the accumulated profits, while the increase in the long term
liabilities is associated with the large increase in long term financing and the license
fee payable, which was made due, to the renewal of Zong’s license.
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5.4 Ratio Analysis
Current Ratio
Table 5: Current Ratio Comparison between 2006 & 2007
2008 20070.31:1 0.35:1
Current ratio is a liquidity ratio that measures how easily a company can pay off its
current liabilities using its current assets. For Zong although most of its revenues are
on a prepaid basis but still the current assets fall short to pay off the current liabilities
in both 2007 and 2008. Furthermore the current ratio has fallen in 2008, which again
shows that there aren’t enough liquid assets to pay off the current liabilities and may
affect Zong’s solvency in the short term.
5.5 Fixed Assets Turnover
Fixed Asset Turnover, an asset management ratio, shows how effectively a company
uses its fixed assets. That is using its assets to generate sales. Most of Zong’s assets
are fixed, major of which include cell sites and other equipment. As the figures show,
the ratio has decreased in 2007, from 0.53 to 0.51.
Although the decrease is very small, the major reasons associated are the large
increase in the fixed assets and the small increase in sales. The fixed assets rose by
29.3%, while the revenue rose by 26.3%. The major reason for the small increase in
the sales could be associated to the rather small increase in the total subscribers in
2008, as compared to 2007.
2008 20070.51 0.53Table 6: Fixed Assets Turnover Comparison between 2007 & 2008
5.6 Debt Ratio
2008 200784.7% 86.7%
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Table 7: Debt Ratio Comparison between 2007 & 2008
The Debt Ratio measures the percentage of funds provided by sources other than
equity. For zong, most of its growth is funded through long and short term financing,
and even though zong has expanded its operations during 2007, but still the debt ratio
fell in 2007, but only by 2%, which is mainly because of the large increase in the total
assets, when compared to long term liabilities. The rise and fall of current liabilities
and currents assets respectively is not much.
Return on Common Equity
Table 8: Return on Common Equity Comparison between 2007 & 2008
2008 200717.6% 15.1%
Return on common equity, a profitability ratio, measures the extent to which the
shareholders of a company are getting returns on their investments. The ratio for Zong
has decreased significantly in 2008, a decrease of 7.5%. This decrease can be
associated to the small income available to the shareholder. Most of the net income
has to be paid out in financial charges, which leaves less or the shareholders, which in
2008, expanded their investment in the company.
5.7 Human Resource Assessment
Zong, the largest cellular company of Pakistan, is made of a team of over 4500 of
unique individuals. They are the best minds in the industry today, being exposed to
the best practices and an enabling environment.
Employees at Zong are treated as a big family, where their growth is as important as
Zong’s. Capability building programs equip employees with all the skills and
techniques needed for them to realize their ambitions, while diversity and wellness
initiatives help employee’s further reach new heights and achieve their goals.
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Zong’s hiring takes place through its website which is being powered with a
partnership with Rozee.pk, one of Pakistan’s premier website. This website provides
updated information on job openings, as and when they happen. Furthermore the
website is divided into three sections, all providing information accordingly:
• Internship Candidates
• Entry Level Candidates
• Experienced Candidates
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CHAPTER 6
CONCLUSIONS AND RECOMMENDATIONS
6.1 CONCLUSIONS
The current ratio of Zong is below 1, which means that if it is liquidate in the
short run than it will not be able to pay its current liabilities.
In the first three years there is a negative trend in the cash ratio and the best
ratio is for year 2007 i-e 0.35 In 2008 it again show negative trend and the ratio
fall to 0.31.
The debt to assets ratio Zong for 2007-2008 is very high which ranges from
0.86 to 0.84. Such a high debt to assets ratio makes creditors reluctant to lend
their money.
The Total assets turnover has shown negative trend from 2007 i-e from .53
while in 2008 it has fallen to .51. The fall in the ratio shows that the
administration has not been working properly and the authority needs to
concentrate on the management.
The Return on Assets/ Investment is negative from 2007 to 2008, any how it
shows improvement and in 2008 its value is 0.69 which shows that the assets
are utilized more efficiently and effectively as compared to the previous years.
Return on Equity for the first year of analysis is negative but in 2008 the ratio
is 17.4 which is a good sign for share holders.
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6.2 RECOMMENDATIONS
The quality of the current ratio can be affected through increasing accounts
receivable turnover ratio which is very low. It will increase current assets and
hence current liabilities will be easily dealt.
Cash ratio can be improved by recovering the lended cash. Also selling the
worn- out and idle assets will improve the cash ratio.
The debt to assets ratio can be decreased by issuing more shares and
increasing capital
Total assets turnover can be increased by improving the administration by
training, seminars, workshops, technological developments and research etc.
Return on Assets/Investment has shown improvement however it can be
increased by improving supervision and skill of the employees so that assets
are properly utilized and misuse of the assets can be prevented.
A/R turnover ratio can be increased by improving the terms and conditions for
the repayment of accounts receivables.
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Glossary
VAS: Value Added Service
CSC: Customer Service Center
UAE: United Arab Emirate
FNF: Friends and Family
MB: Mega Byte
BTO: Break Time Offer
LNO: Late Night Offer
LBC: Location Base Charging
SMS: Short Message Service
GPRS: General Pocket Radio Service
BYN: Book Your Number
MNP: Mobile Number Portability
SEP: Student Entrepreneur Program
GB: Giga Byte
NP: Non-Personal
MMS: Multi-Media Messaging Service
ATM: Automated Tele Machine
CSR: Customer Service Representative
CNIC: Computerized National Identity Card
CSAF: Cellular Service Agreement Form
CSF: Cellular Service Form
CRM: Customer Relationship Management
SIM: Subscriber Identity Module
IMEI: International Mobile Equipment Identity
NADRA: National Database Registration Authority
MSISDN: Dial able Number that Caller Use to reach a mobile subscriber
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Bibliography
Web Resources
• Wikipedia (wikipedia.com)
Articles used:
o Mobilink
o Ufone
o Telenor Pakistan
o Warid Telecom (Pakistan)
o China Mobile (Pakistan)
• Mobilink (mobilinkgsm.com)
• Pakistan Telecommunication Authority (pta.gov.pk)
• Ufone (ufone.com)
• Telenor (telenor.com.pk)
• Warid (waridtel.com)
• Zong (zong.com.pk)
• Orascom Telecom (otelecom.com)
• The News (thenews.com.pk)
• PTA website
• Zong CEO speaks about 2008 plans (www.telecompk.net)
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