Marketing report mobile service industry (1)

Executive Summary

The mobile services industry is one of the fastest growing industries in Sri Lanka with

over 14 million users. The industry provides telecommunication and information

services, including voice calls, short message service (SMS), internet access, picture

and video messaging, and other data services, to 90 percent of the Sri Lankan

population.

Due to the ubiquity of mobile phones, mobile service providers can play a key role in

helping to shape a more sustainable society. Not only do mobile services providers

bring access to telecommunications and information and that drives sustainable

development in emerging markets, but these companies also develop products and

services that can enable a low-carbon society.

The aim of this report is to assess the mobile industry’s current state and develop a

business rationale and framework for sustainability that fits the unique needs of the

mobile services industry. In addition, recommendations are given that can further the

mobile industry’s sustainability agenda.

Mobile Services Industry Background The mobile services industry is defined as

those companies, which together enable the provision of telecommunication,

information, and entertainment services including voice, internet, SMS, text, and

other data services.

It is comprised of thousands of companies offering mobile services worldwide; some

of the largest include Mobitel, Dialog, Airtel, and Etisalat. Mobitel is narrowly the

largest mobile operator by revenue. However, Dialog is the largest in terms of

subscribers and coverage, with over 1.5 million subscribers.

Table of Contents

Chapter 01

1. Introduction to the Local Industry

2. Mobile service providers- Industry overview

3. Introduction to the Business Environment

4. Importance of Business Environment

5. New Trends in Business Environment

6. Macro Environment implication on Mobile service providers

Chapter 02

7. Latest changes in Macro Environmental factors (Last five years)

I. Latest changes in Political and Legal factors

II. Latest changes in Economic factorsIII. Latest changes in Social-cultural factorsIV. Latest changes in Technological factorsV. Latest changes in Natural factors

VI. Latest changes in Demographic factors

Chapter 03

8. Marketing Mix strategy on Mobile Service providers

9. How they overcome these challenges (During the last five years)

I. Political and Legal factors

II. Economic factors

III. Social-cultural factors

IV. Technological factors

V. Demographic factors

Chapter 04

10. Recommendations for the Mobile Service Providers

11. Conclusion

Introduction to the Local Industry

What is an Industry?

Any type of Economic Activity producing GOODs or SERVICES.

It is part of a chain – from raw materials to finished product, finished product to

service sector, and service sector to research and development.

It includes AGRICULTURE, MANUFACTURING and SERVICEs.

Types of industry

According to the Central Bank annual report in Sri Lanka there are four types of

Industry:

Mining and Quarrying

Manufacturing (i.e. processing of agricultural products, Factory industry,

Cottage Industry)

Electricity, Gas & Water

Construction

Mobile Service Industry Overview.

Mobile industry it has been observed that in the history of the telecom industry,

mobile telephony has made a greater difference to the lives of more people, more

quickly than any other technology.

As the mobile industry globally crossed five million subscribers in 2010 - an

important milestone - the prospect of a whole world consisting of networked people is

becoming a real possibility. The International Telecom Union (ITU) predicts that

within the next decade, if not earlier, global teledensity will surpass 100%. That

would however not mean that everyone has a phone, because many may have more

than a single handset or multiple SIMs.

However, with mobile technology spreading fast due to growing affordability and

ease of adaption, at the current rate of mobile phone adoption, it is likely that sooner

than later, anyone who wants a mobile phone will have one.

And as mobile networks widely offer 3G broadband, everyone will have access to the

Internet, and as expressed by the ITU, that would mean “mobile telephony would

have done more than anything else in history, to advance the democratization of

telecoms, and all that comes with it.” An interesting development is that the reducing

prices and size of Mobile Phones and the increasing power and versatility of the

mobile handsets, is leading to the Mobile service providers and the mobile handset

converging into a new range of devises that combine power, versatility and greater

portability.

This convergence has increased the power of the mobile handset producers who are

becoming the axis around which operators, platform vendors, software and

application developers, operating system developers, standards alliances and

Chip/Processor manufacturers etc. are building their businesses. Implications of that

development can be significant, and a potential Consequence could be the possibility

of the importance of voice calls as a source of revenue declining and stress on the

revenue streams of operators being applied by the handset manufacturers.

The challenge then is for the mobile operators to assiduously review their existing

business models and redefine their game plan to match the emerging challenge. An

inactive or “sleepy” operator would obviously be left behind, and the future ready

operator would be best placed to take on the future. For Srilankan Mobile service

providers then, these would be interesting times.

2006 2007 2008 2009 20100

500

1000

1500

2000

2500

3000

3500

1291

1668

25162769

3238

Mobitel Subscriber growth

Subscriber growth in mobitel

2006 2007 2008 2009 20100

1000

2000

3000

4000

5000

6000

7000

8000

2700

42004900

61006950

Dialog subscriber growth

Dialog subscriber growth

MOBITEL

Mobitel was incorporated in 1993 as the second mobile telephone provider in the Sri

Lankan market. Originally collaboration between Sri Lanka Telecom and Telstra,

Mobitel has been wholly owned by SLT since November 2002. The company slogan

is "We Care Always."

Mobitel is considered to be the country's most dynamic mobile telephone operator and

is known the 'National' mobile service provider in Sri Lanka. Since being acquired by

Sri Lanka Telecom in 2002, it has grown in leaps and bounds and is now on par

technologically with the very latest in the telecommunications industry.

The company is continuing on its strategy which is positioned around ‘value

innovation’ and ‘customer centricity’. Mobitel has a very strong brand image, with

high visibility at strategic locations.

Mobitel has shown their competitive position over the years in terms of formidable

distribution, product suit and brand. The features and benefits built into the packages

that they offer are all designed carefully, with the customer's best interest regarded

highly.

Following the successful implementation and operation of an AMPS/TDMA network

in the country, Mobitel launched its GSM operations in January 2004 with the

deployment of a fully-fledged GSM network in the 800 MHz and 1800 MHz band,

which is EDGE/GPRS enabled. In 2005 and 2006, Mobitel traded the 800 MHz band

for slots made available from the 900 MHz range. With this enhancement, Mobitel

embarked on a field trial of 3G at the 1st International Buddhist Conference held in

2006, setting the stage for the launch of its 3G services in Sri Lanka.

Investments committed to date for this state-of-the-art technology to provide 3G and

GSM totals over US$ 200 million. This included increasing the present number of

base stations from 600 to 1,500 by the end of 2008.

Network

Mobitel currently operates a 3.5G network with HSDPA/HSUPA support and

downlink speeds of up to 3.6 Mbit/s and uplink speed up to 1.00Mbit/s. According to

speed test. Mobitel is the operator to issue the fastest internet connections in Sri

Lanka via HSPA, while they have also fully tested out 42Mbit/s downlink HSPA

MIMO technology in Colombo. It is also serving customers with over 1500 GSM and

400 3.5G base stations island wide. On 6 May 2011, Mobitel became the first

company in South Asia to trial a network based on 4G technology.

Taffies and packagers

Mobitel offers SMART prepaid and Double M post paid packages, while the Upahara

package was available for Sri Lankan government workers for a limited time period.

Upahara offered up to five similar Subscriber Identity Modules to be used in the

family of the principle customer, at lower rates.

Value added services

Mobitel offers a variety of value added services:

WAP, GPRS,MMS

Closed User Group services,

SMS banking,

E-channeling,

directories,

M3 3.5G services (video calls, video message, HSDPA with uplink up to 1.00

Mbit/s and downlink up to 3.6 Mbit/s),

Menu based services (OTA) which are updated to the SIM card,

International Roaming facilities in over 180 countries while including special

services such as the Voice Notification messages which alert a person on roaming

status and other features such as Call Home and SMS Roaming.

M-Fax

M3 Apps (Powered by Google apps)

M-tunes

Live scores of cricket matches

DIALOG

Dialog PLC is Sri Lanka's largest telecommunications service provider, which

operates Dialog Mobile, the country's largest mobile phone network with over 6

million subscribers. Dialog is a subsidiary of Axiata Group Berhad and Dialog was

Listed on the Colombo Stock Exchange in 2005 and was the country’s first USD 1

Billion market capitalized company on the Colombo Stock Exchange in terms

of market capitalization. Hans Wijayasuriya is the Director/Group Chief Executive of

Dialog plc.

Dialog launched its services in 1995 as the 4th entrant to Sri Lanka’s Cellular Market

and was the first digital network in South Asia. Dialog was also the first operator in

the region to deliver international roaming in 1997. Dialog Mobile presently has the

largest number of subscribers and revenue share.

In 2010 the company received the highest "Platinum" rating in the countries first-ever

Corporate Accountability Index. The company operates

on 2.5G, 3Gand 3.5G communications networks, and was the first company to launch

commercial 3G and HSPA+ operations in South Asia. In addition, Dialog recently

announced that the company has switched on its 4G LTE Network in Colombo

becoming the first LTE pilot network in South Asia..

In addition to its core business of mobile telephony, the company operates a range of

services including Dialog TV, the country's Direct To Home Satellite TV service and

Dialog Global which provides international telecommunication services. Dialog

Broadband offers fixed-line and broadband internet services, whilst Dialog Tele-

Infrastructure is the company’s national Telco communications arm.

Dialog was the first mobile operator to cover the Jaffna peninsula in Northern Sri

Lanka within 90 days of the ceasefire agreement in 2002 and again in 2009 was the

first mobile operator to extend its GSM network to the areas in the North and East

Province where the war was fought, and presently has 80% market share in the region.

Dialog is an investor under the sponsorship of the Board of Investment of Sri Lanka

and has invested over 1 billion US dollars towards the development of

telecommunications infrastructure in Sri Lanka, and is one of the largest investors in

the island while being the largest investor in the telecom sector.

Dialog is also the official Sri Lankan partner of the mobile operator Vodafone.

Dialog Mobile has island wide GSM coverage with over 2000 2.5G Sites. In addition

Dialog offers 3G and 3.5G coverage in Sri Lanka with over 1000 3G sites which

support video calls, mobile TV and broadband internet. In addition, Recently Dialog

Launched a pilot 4G LTE Network becoming the first operator in South Asia to touch

exposition of Long Term Evolution (LTE) service. Its 4G pilot network has

demonstrated the delivery of over 100 Mbps in indoor demonstration mode and 40 –

50Mbps under outdoor mobile conditions, from Colombo 1 to Colombo 4.

AIRTEL

Airtel Lanka Limited is a subsidiary of Bharti Airtel Limited, the fifth largest mobile

operator in the world, with approximately 200 million mobile customers as of October

2010. Bharti Airtel has been featured in Forbes Asia's Fab 50 list, rated amongst the

best performing companies in the world in the Business Week IT 100 list 2007, and

voted as India's most innovative company in a survey by The Wall Street Journal.

Amali Nanayakkara is the CEO of Airtrl Sri Lanka.

Airtel Sri Lanka commenced commercial operations of services on 13 January 2009.

Granted a license in 2007 in accordance with the Sri Lanka Telecommunications Act

No. 25 of 1991, it is also a registered company under the Board of Investment Sri

Lanka. Under the license, the company provides digital mobile services to Sri Lanka.

This is inclusive of voice telephony, voice mail, data services and GSM based

services. All of these services are provided under the airtel brand.

Airtel Sri Lanka as nationwide coverage and holds 1.4 million subscribers as of

September 2010.

Before launching services officially, Airtel opened up their branch offices island wide

and allowed customers to book their number beforehand. Forms were given at all

branch offices and customers were given an option of choosing five numbers, out of

which one number was given based on availability. This booking system started on

January 5 and was expected to close on January 9 but all numbers had been booked by

January 8, according to notices displayed on the doors of the branch offices.

Airtel currently uses GSM and UMTS/HSPA technologies. Initially Airtel was

offering cheapest Mobile broadband plans starting at 5GB for Rs.299/- but later it

discontinued due lack of International bandwidth and financial loss it had incurred.

Only major cities like Colombo, Kandy , Galle and Ampara are covered by 3.5G

network.

Airtel is improving their GSM coverage rapidly and they have 1000+ Base Station on

operation island-wide, but they haven't taken any steps on widening their 3G coverage

ever since their launch. Airtel started their service in Northern Sri Lanka on October

2010.

Airtel Sri Lanka received many legal threats from other operators as Airtel started to

offer cheaper call rates. This led the industry to a price war and all operators including

Airtel itself had posted a significant loss in the year of 2009.

On July 15, 2010, TRC (Telecommunication Regulation Commission) implemented a

floor price to all the operators to overcome the price war. All the operators increased

their call charges except Airtel which filed Fundamental Rights request in highest

Court on July 19, 2010 saying that this new floor price is unfair to the newcomer to

the industry. But, this petition got rejected by the Supreme court.

So, Airtel revised their tariff on August 3, 2010 for new customers, as previously they

offered 49 cents/min within the network now it's Rs. 1/min and no changes to other

network call as they offered Rs. 2/min earlier also.

ETISALAT

Sri Lanka's first Cellular networks, then called Celltel inaugurated its operations in

1989. A brand name change was done on the 25th of January 2007 and thereafter

named "Tigo" and this was transformed with Milicom disposing its Asian operations.

they are now a company fully owned and operated by the giant Telecom Etisalat

Telecommunication Corporation in the UAE. It has extended operations in Egypt and

Saudi Arabia in the Middle East and further into Asian markets such as India,

Pakistan, Afghanistan, Indonesia and now Sri Lanka, recording over 100 million

subscribers across 18 countries offering opportunities for synergy with our other

operations in the region. Etisalat officially commenced its operations in Sri Lanka on

the 25th of February 2010.

Etisalat is consistently providing not only the widest coverage and an unprecedented

service, but also a host of other Value Added Services. We are dynamic and treat our

customers as our own, and consider customer service as our first priority.

The slogan of our operations is, "It's About You!" as they make public an selection of

services to match the hearts of their customers. Their value and nurture the energy and

dynamism needed to achieve the very best in business. They look forward to future

challenges and opportunities. As a company, they are welcoming, sociable and

friendly to customers, suppliers.

Their aim is to open up opportunities and to actively help people reach their goals.

They always deliver what we say we willed employees. They deal with people in a

clear, direct way and are always honest and fair in business dealings.

Today Etisalat operates in a world where people's reach is not limited by matter or

distance. They are reaching out to where it matters because with Etisalat ‘it’s about

you’. As a responsible business entity Etisalat strives to go beyond the required norm

to make a positive impact on society and the environment.

Through their management and operations they ensure that whatever they do, set out

to demonstrate their commitment and respect to all of thier stakeholders, communities

and environment. Their CSR initiatives focuses on community based investment

programmes and sponsorships. Their management and staff engage themselves with

these community projects through professional service, as a result a continuous

commitment towards CSR initiatives are seen and demonstrated across the company.

Etisalat carries out a range of CSR initiatives which range from both medium-to-long

and short-term projects, namely Education, Community/Livelihood Development,

Environment and Disaster Relief.

HUTCH

Hutch mobile telecommunication provider offering customers a range of value-for

money GSM services fulfilling the diverse needs of all segments. Hutchison

Telecommunications Lanka (Pvt) Ltd. (“Hutchison Telecom Lanka”) launched its

GSM service in 2004, and has continuously been investing in the expansion of

network coverage with the aim of being a nationwide operator in Sri Lanka.

Hutchison Telecom Lanka is a member of Hutchison Asia Telecom which comprises

mobile telecommunications operations in the emerging markets of Indonesia, Vietnam

and Sri Lanka. Hutchison Asia Telecom is a key part of Hutchison Whampoa Group’s

telecommunications division which includes the 3 Group comprising 3G operations in

Australia, Austria, Denmark, Hong Kong, Ireland, Italy, Macau, Sweden and the UK. 

Business Environment

The business environment is the aggregate of all conditions, events, and influences

that surround and affect a business firm. Business environment generally refers to the

external factors affecting, either positively or negatively, the operation of a firm. The

most important external factors include economic, legal, political, social and

technological factors. The environmental factors influence almost every aspect of

business, be it its nature, its location, the prices of products, the distribution system, or

the personnel policies.

Business environment is classified as follows: -

(a) Internal Environment: These are the environmental factors which include:-

1) Man

2) Machine

3) Material

4) Management

(b) External Environment: they are classified as

Macro Environment

a) Government

b) Political factors

c) Social factors

d) Cultural factors

e) Demographic factors

f) Economic factors

Micro Environment

a) Human resources to include jobs, hygiene, security

b) Company Board

c) Management structure

The Micro Environment

The microenvironment can be separated into the internal environment and the external

environment. The internal environment consists of the firm’s own management

structure, the organization’s strategies and objectives, and the departments within the

company. The characteristics of the firm’s internal environment affect its ability to

serve its customers. The external environment comprises suppliers, marketing

intermediaries, customers, competitors and publics. As well as obvious groups such as

shareholders, publics can also include local interest groups who may have concerns

about the marketer’s impact on the environment or on local employment.

The Macro Environment

Changes in the macro-environment may not be as close to the marketing firm’s day-

to-day operations, but they are just as important.

(Often referred to as the ‘PEST’ factors in the marketing analytical context, a useful

aide-memoire, although in some texts it is sometimes referred to as ‘STEP’). To this

is sometimes added ‘Competitive factors’ and although ‘PEST’ analysis relates to a

specific organization ‘Competitive factors’ tend to be subsumed under ‘Economic

factors’. Such a PEST analysis means listing all possible points, which may affect the

organization under review of the each P.E.S.T. headings. In order to correctly

identify opportunities and monitor threats, the company must begin with a thorough

understanding of the marketing environment in which the firm operates.

The success of every business depends on adapting itself to the environment within

which it functions. For example, when there is a change in the government policies,

the business has to make the necessary changes to adapt it to the new policies.

Similarly, a change in the technology may render the existing products obsolete, as

we have seen that the introduction of computer has replaced the typewriters; the color

television has made the black and white television out of fashion. All these aspects are

external factors that are beyond the control of the business. So the business units must

have to adapt themselves to these changes in order to survive and succeed in business.

The term ‘business environment’ connotes external forces, factors and institutions that

are beyond the control of the business and they affect the functioning of a business

enterprise.

These include customers, competitors, suppliers, government, and the social, political,

legal and technological factors etc. While some of these factors or forces may have

direct influence over the business firm, others may operate indirectly. Thus, business

environment may be defined as the total surroundings, which have a direct or indirect

bearing on the functioning of business. It may also be defined as the set of external

factors, such as economic factors, social factors, political and legal factors,

demographic factors, and technical factors etc., which are uncontrollable in nature and

affects the business decisions of a firm.

Political factors

Social factors

Economic factors Legal factorsMacro Environment Factors

Technical factors

IMPORTANCE OF BUSINESS ENVIRONMENT

There is a close and continuous interaction between the business and its environment.

This interaction helps in strengthening the business firm and using its resources more

effectively. The business environment is multifaceted, complex, and dynamic in

nature and has a far-reaching impact on the survival and growth of the business. To be

more specific, proper understanding of the social, political, legal and economic

environment helps the business in the following ways:

a) Determining Opportunities and Threats: The interaction between the business

and its environment would identify opportunities for and threats to the

business. It helps the business enterprises for meeting the challenges

successfully.

b) Giving Direction for Growth: The interaction with the environment leads to

opening up new frontiers of growth for the business firms. It enables the

business to identify the areas for growth and expansion of their activities.

c) Continuous Learning: Environmental analysis makes the task of managers

easier in dealing with business challenges. The managers are motivated to

continuously update their knowledge, understanding and skills to meet the

predicted changes in realm of business.

d) Image Building: Environmental understanding helps the business

organizations in improving their image by showing their sensitivity to the

environment within which they are working. For example, in view of the

shortage of power, many companies have set up Captive Power Plants (CPP)

in their factories to meet their own requirement of power.

Demographic factors

e) Meeting Competition: It helps the firms to analyze the competitors’ strategies

and formulate their own strategies accordingly.

f) Identifying Firm’s Strength and Weakness: Business environment helps to

identify the individual strengths and weaknesses in view of the technological

and global developments.

New Trends in Business Environment

1) Increasing the age limit of a person therefore the demand for the healthy foods

is increasing and smoking and liquor habits are decreasing.

2) In leisure time people like to spend in rural areas.

3) Demand for the take away foods are increasing.

4) People are addicted to do several works at the same time.

5) Increasing the number of nuclear families in the society.

6) Females are the dominant partners in the workforce.

7) Knowledge of the consumer behavior is increasing.

8) Marriages are postponed by younger people, because of the higher education.

9) People are more aware about the concept of SOS- Save Our Society.

10) Increasing the number of elderly people of the society, because of that people

are more attracted to the beauty cultural activities.

Latest Changes in Macro Environmental Factors

Changes in Political and Legal Factors

Political changes in the country have also meant that these markets are now open to

marketers from around the country.

Opportunities for industry.

1. Providing free laptops to undergraduates in local universities & making it a

computer literate society

2. Reduction of Tax’s on electronics making the data / handset units much more

affordable

Threats for industry

1. Ad-hoc changes in government regulations impacting penetration promotions

2. Government protection by the use of license.

A lot of new license and consumer protection schemes are introduced by the

government.

3. Increasing the pressure groups.

Pressure groups are more affected to the companies and marketers because they try to

achieve their targets without or with political support. (Eg: Environment groups.

Consumer groups, religious groups, Etc.)

4. International tariffs, rules and regulations.

5. Pressure from Political groups.

Been unable to make full use of economies of scale due to restrictions from the

governments which are in place to reduce price war among telecommunication

operators

6. Government initiatives of increasing data feasibility & the amount of effort

taken in terms of tackling low speed service providers and penalizing them to

increase speeds.

7. Growth of Legal and Regulatory Risks.

Mobile service providers are faced with the risk of changes in the regulatory

environment. Some of their activities continue to be subjected to significant price and

other regulatory controls which may affect their market share, competitive position

and future profitability.

The revenue of their organizations can even be adversely affected by the recently

introduced price revisions of voice services, broadband services, leased circuits and

backhauling services where the prices had to be slashed down due to market and

regulatory pressures towards the achievement of government objectives of increasing

broadband penetration in the country.

Changes in Economic Factors.

The economic environment is important to marketers because it affects the amount of

money people have to spend on products and services.

Opportunities for industry.

1. End of a 30 year civil war opening up two new markets in the Northern &

Eastern Sri Lanka which strengthens the economic situation of the country.

2. Increase of per capita income levels in the country enabling consumers to

reach the high cyber word.

3. Changes in workforce.

A large proportion of women now go out to work. This has resulted in an increase in

the sales of mobile phones. Therefore this is also a greater advantage to the mobile

service industry.

4. Changes in interest rates and lending rates.

The reduced lending rates and lower and stable inflation conditions favoured a

positive business climate.

5. Reduction in taxes on the telecommunication sector.

The decision by the government to simplify the tax structure particularly with regard

to the telecom sector is a welcome move.

The proposed tax modifications effectively favours the mobile subscribers and would

potentially stimulate higher mobile usage, hence improved revenue of the mobile

operator. The removal of VAT as part of the revised concessions to the subscriber,

although enhances the customer affordability, would increase the cost structures of

operators as recovery of input VAT would be constrained.

Threats for industry.

1. Changes in National income and inflation.

2. Changes in income levels of people.

3. Growth of marketing risks.

While there are many factors which contribute to the high level of competition, the

prominent factors include technology substitution, market and service convergence,

customer churn, declining levels of market differentiation, declining market growth

rates, regulatory intervention which is focused on promoting competition, and the

emergence of competitors with distinctive and non-replicable sources of competitive

advantage.

4. Revenue growth.

Mobile service providers face a number of challenges in relation to growing revenues.

A distinct challenge is that their voice and connectivity business is a mature business

subject to price deflation and declining or negative market growth rates leading to

declining revenues, margins and cash flow. The net effect is that they increasingly

have to look beyond the voice market to secure profitable revenue growth from

adjacent markets, both inside and outside the country.

Changes in Social-cultural Factors.

People’s opinions and tastes are shaped by the society in which they live. It should be

noted that societies are not made up of homogeneous populations. They contain sub-

cultures, which are beliefs and values shared by smaller groups of people. Such

groups may arise out of a common race, religion, social activity or hobby. Sub-

cultures are important to marketers insofar as they may have different consumption

habits from the rest of the population.

Opportunities for industry

1. Shift of life style across the country due to improved media, technology and

communication.

2. New generations born with utmost technology around them create

opportunities for mobile broad band services to grow.

3. Social networking & new media such as face book / SMS over internet /

Multimedia services has gain popularity among general public across the

country.

4. The mobile youth culture

Mobile communication and the social consequences associated with it

are experienced by individuals of many walks of life – young, old,

rich, poor, the mobile phone can serve as a status symbol and article of

fashion for its users in general . Young people have especially come to

be embracing the technology for its symbolic significance. The mobile

phone has become an icon for contemporary teens in many countries.

Changes in Technological Factors

Mobile service firms usually have a huge base of complex legacy systems. These

systems are disparate with their own data. Integration (system and data) of such

systems has been a problem. All this has a heavy toll on Customer loyalty, Product

lifecycle management, and Process improvements.

Opportunities for industry

1. Extensive use of technology in Education systems / Communication systems /

Manufacturing / Medicine etc needing data services

2. Greater emphasis on Research and Development.

3. Increasing the technological Innovations mobile service industry.

4. Spreading of Digitalization all over the country.

5. Increasing the Hi-Technological instruments, High Adoptability to technology.

6. Internet Facilities are spreading in rural areas.

7. Mobile Phone users are increasing day by day.

Threats for the industry.

1. Capacity Limitations.

Not having developed fiber infra‐structure and 99% MW are used for backhauling

(Limited capacity)

2. Power availability Issues.

Mobile base stations are located in hill areas and the National grid is not available

also the High cost (Diesel generators) and No developed green energy system(Solar

and wind )

3. Network problems.

Network operations are usually designed to address frequent disruptions caused by

equipment failures. Sometimes the Mobile service companies do not address the

catastrophe level incident like fire, earth quake etc.

Changes in Natural Environment

This is important to Mobile service industry insofar as it is the source of many raw

materials and fluctuation in supply can affect the prices paid for purchases.

Opportunities for the industry.

1. Increasing trend of paperless environments is supported by data & internet

2. Major global concern.

Global interest on carbon foot print encouraging more and more use of computer and

e communication.

Threats for the industry.

1. Containing costs while delivering increasingly more complex services and

providing a consistently higher level of customer service across wide

geographical areas.

2. Increased in energy cost.

The increased cost of energy is also having an effect on the types of products that

appeal to consumers.

3. Scarcity of resources.

4. Storage of raw materials.

- Due to inflation.

Changes in Demographic Factors

The demographic environment itself is affected by changes in the mix of age groups

in the population. If the population becomes older, this will lead to rising demand for

products and services consumed by older people and a similar fall in demand for

products consumed by younger people. Demographic environment is also affected by

the level of education in a country, since changes in education have an impact on the

wealth of a nation and the tastes of its people. The lifestyles of a population also have

an impact on the Macro environment to the mobile service industry.

Opportunities for the industry.

1. Changes in family structure and the population.

In the mobile sector subscriber growth continued to be aggressive with the number of

mobile subscriptions increasing by 23% - 17.4 Mn.

2. The fast return to normalcy of the North and East and overall tension free

conditions in all parts of the country offered greater momentum for business

expansion.

The promise of the potential emanating from the opening of hitherto unexplored

geographical areas of the country has led to all mobile service operators racing to

capture pieces of the unfolding markets, and Mobile service providers too with an

already established foothold in those markets will accelerate and execute plans to

further strengthen its position.

3. Increasing the ICT literacy level in Sri lanka.

The Signals to the government’s intention to fast develop the ICT literacy level of the

country, which in turn would function as a multiplier in the country’s economic

growth process.

How They Overcome Those Challenges During The Last

Five Years.

Sri Lanka’s Mobile communication industry has been a trailblazer in the South Asian

region, being the first to introduce latest technologies in the market-be it GSM

(Global Standard for Mobile) telephony. All companies try to change. Because they

want to stay in the market in long time and earn more profits. Every time customers

think that what service providers gives more benefits. But in the present a research

says that people think dialog is the most profitable and useful service among the

other’s services.

Political and legal factors

Rates are deducted because of the new rules and regulations.

MOBITEL introduced an M Best Friend (MBF) Two Mobitel numbers as My

Best Friend (MBF) numbers.24 hours of the day outgoing (Voice/Video) calls

to My Best Friend numbers at Rs. 1/- for the 1st minute, 75 cents for the 2nd

minute and 50 cents per every minute thereafter. SMS to My Best Friend

numbers are at 25 cents per message.

In the first time in the mobile industry of Sri Lanka Aritel offered earn super

points on every incoming call from another network to the Airtel.

All companies try to attract more customers. In Hutch Company introduce

with this great per minute prepaid plan, customers get 60 minutes and 50 SMS

free for a day, for a daily charge of just Rs. 12.

ETISALAT offer new packages for their customers. These are their packages.

Discover

Monthly Subscription FREE

Price

(E to E)

Rs. 1

Price

(Other Networks)

Rs. 2

SMS

Etisalat to Etisalat 10 cents

Etisalat to other networks 25 cents

Dream

Free Outgoing mins

(E to E 75 - Other Networks 100)

175

Price

(To any local network after your free minutes are used up)

Rs. 2 per min

Price

(E to E - After your free minutes are used up)

Rs.1

Subscription Rs. 275

SMS

Etisalat to Etisalat 10 cents

Etisalat to other networks 25 cents

Success

Free outgoing mins

(E to E 150 - Other Networks 200)

350

Price

(To any local network after your free minutes are used up)

Rs. 2 per min

Price

(E to E - After your free minutes are used up)

Rs.1

Subscription Rs. 550

SMS

Etisalat to Etisalat 10 cents

Etisalat to other networks 25 cents

Reach

Free outgoing mins

(E to E 300 - Other Networks 400)

700

Price

(To any local network after your free minutes are used up)

Rs. 2 per min

Price

(E to E - After your free minutes are used up)

Rs.1

Subscription Rs. 1100

SMS

Etisalat to Etisalat 10 cents

Etisalat to other networks 25 cents

Talk to 120 friends in ETISALAT it’s for just Rs.1 a Minute. Now we can

build conference room.

These are the AIRTEL’s new packages for their customers.

   Package Celebration 300

Celebration 600

Unlimited

ACTIVATION FEE Rs. 500 Rs. 500 Rs. 500MONTHLY COMMITMENT

Rs. 300 Rs. 600 Rs.1,499

FREE DATA BUNDLE 1GB 3GB Unlimited

CHARGES FOR USAGE ABOVE FREE BUNDLE

60 cents per MB

60 cents per MB

SMS (A2A, A2O) 10 cents, 25 cents

10 cents, 25 cents

10 cents, 25 cents

SPEED

Downlink 3.6 Mbps 3.6 Mbps 1.8 Mbps

Uplink 384 Kbps 384 Kbps 384 Kbps

FAIR USAGE POLICY Not Applicable Not Applicable Applicable

HUTCH offered a new bonus reload Rs. 199 and get Rs. 300 worth of IDD.

To increase the facility of high speed internet for their customers.

They offered new data packs to Airtel customers

For the first time in Sri Lanka, get all sorts of mobile applications that

customer want at Etisalat App zone. Now customer can enjoy with games,

alerts, horoscope apps, sms to email, travel apps, voting apps, funs apps and

much more.  

They introduced the Mobitel 3G delight BB. Now, make high-speed net

surfing a reality with Mobiltel. Get onto the Internet directly on the mobile

phone or use the USB High Speed Internet modem on the desktop/laptop. All

customers need is the 3G Delight suite of services from Mobitel

Economic Factors

Mobile service providers entered in to the new market in northern Sri lanka.

Now Airtel 3G is available in the North science august, bringing you closer to

the things you love.

In Northern Sri Lanka. They introduced a new Top up for Rs. 98 and enjoy Rs.

150 worth IDD TALK TIME on the Airtel. It’s valid for a month.

To reduce the market risk they sell mobile Phones with more benefits.

As well as they offered a star points methods. Winners can get Samsung

galaxy tab10.1 and Samsung galaxy sill.

ETISALAT introduced the new unbelievable offers to HNB credit card holder.

Now customers can buy black berry cure 8520, 9300 phones and bold 9700

and torch 9800 phones by using their credit card. As well as their customers

can save money 50%.

ETISALAT introduced the Huawei IDEOS X3. It’s only available with

Etisalat. It has more facilities.

MOBITEL offered the Pre-paid Broadband Smart Dongle for just Rs. 3490 in

July.

As well as Mobitel introduced a srilanka’s first 3D Smartphone partnership

with Abans.

It’s the world’s first “tri-dual” architecture. It has more facilities. There are 1GHZ

dual core, dual channel processors, 8 GB memory and 4GB LP DDR2, 3D

recording, viewing and sharing.

HUTCH offered 10% Bonus on Online Re-charge!

ETISALAT introduced new refresh cards to the market ETISALAT INTERNET PLUS +

ETISALAT, DAILOG, MOBITEL, AIRTEL AND HUTCH have General News in Sinhala, English and Tamil medium.

ETISALAT offered new Etisalat dongle for the lowest price in the market rs.1999 in September.

Technological Factors

To overcome from, increasing the Hi-Technological instruments, High

Adoptability to technology the mobile service providers used the following

methods.

MOBITEL was the first 3.5G operator in Sri Lanka and South Asia. It covers

most of Sri Lanka with its GSM network.

MOBITEL offers both prepaid and postpaid mobile services, along with

mobile broadband services using the 3.5G network.

Following the successful implementation and operation of an AMPS/TDMA network

in the country, Mobitel launched its GSM operations in January 2004 with the

deployment of a fully-fledged GSM network in the 800 MHz and 1800 MHz band,

which is EDGE/GPRS enabled.

In 2005 and 2006, Mobitel traded the 800 MHz band for slots made available

from the 900 MHz spectrum.

Dialog launched a pilot 4G LTE Network becoming the first operator in South

Asia.

AIRTEL lunched the M-commerce with Airtel. All Airtel customers who have

an account at BOC or Commercial Bank now they can do mobile banking/

top-up their account and pay their bills.

MOBITEL introduced 1717 the new Customer Care Hotline Number of

Mobitel.

MOBITEL offered SMS with Gmail – Now we can send FREE SMS to your

Mobitel friends via Gmail.

DIALOG introduced a new Password method to protect our SMS Inbox

In recently DIALOG offered Mobile TV, SMS banking, E- Channeling,

Directories, Fax number for every service holder.

ETISALAT launched new method in February 2011. With their Eze top

service now customer can send a reload to Etisalat friends anywhere in the

world. To send credit through eze top.

Social-cultural Factors

Job alert service via SMS Etisalat Sri Lanka and Dialog launches “Jobs Alert via SMS” service for its

subscribers for the first time in Sri Lanka. The service is launched in

association with Jobs website. Get instant SMS updates about the latest jobs

on offer at Sri Lanka’s premier online job portal www.topjobs.lk.

Send text messages to any Dialog Mobile via your Google account, absolutely free.

Latest gossips about of famous persons.

Demographic factors

In 2009, Mobitel became the official sponsor of the Sri Lankan Cricket Team.

And they launched a concept called I am Sri lanka.

In first time MOBITEL launched of priority services for war heroes.

Due to changes in age mix and the changes in family structure they offer these

facilities.

HUTCH launched a couple package for monthly rental is rs.200. Their main

target customers are young students.

DIALOG offered free health tips till in November 24th

Recommendations for the Mobile Service Providers

1. Implementation of National fiber backbone & Develop fiber infra‐structure in

the country. (fiber to sites)

2. Use of green power sources to reduce the cost of the added selling prices and

call, sms and other charges, for that they can use :

Solar Power Solution

Solar‐wind Hybrid Power Solution

Solar‐diesel generator Hybrid Power Solution

3. More Infrastructure Sharing.

4. Because of the Limited stability for Mobile base stations in the market, should

increase the number of Service providers to the industry. Because Mobile

service industry is an oligopoly Market.

5. Advertising via MMS.

MMS mobile marketing can contain a timed slideshow of images, text, audio and

video. This mobile content is delivered via MMS (Multimedia Message Service).

Nearly all new phones produced with a color screen are capable of sending and

receiving standard MMS message. Brands are able to both send (mobile terminated)

and receive (mobile originated) rich content through MMS A2P (application-to-

person) mobile networks to mobile subscribers. In some networks, brands are also

able to sponsor messages that are sent P2P (person-to-person).

Mobile MMS videos increase user interest and boost direct response rates offering

marketers and advertisers a viable mobile channel to deliver richer media content.

Increased Direct Response Rate

Because of its interactivity, MMS videos increase user interest and

boost direct response rates from people that are tired of just seeing

boring text. It's also the perfect way to showcase to your customers that

the business is on top of the latest technologies.

Interactive MMS

MMS creates a more interactive and emotional appeal on mobile

devices compared to SMS through elements of sound, animation and

images. MMS creates a modern mobile experience with powerful

visual branding possibilities.

6. Parent Guide- Find out all that customer need to know about bringing up

children queries related to food, nutrition, growth, development, behavior

patterns, disciplining, and more.

7. Baby Names- Customer’s precious babies here and now it’s time to find a

suitable name. A name that reflects all emotions, hopes and aspirations of

customers. Browse through extensive listings and find the one that is perfect

for customer’s bundle of joy.

8. Baby Care- Be aware of all the caregiving needed for bundle of joy food

habits, immunization, safety, basic health tips, toys, and more. Keep baby

healthy and happy.

9. Recipes- Get to know the secret to make lip-smacking recipes from one of Sri

Lanka's most famous cooks and delight friends and family.

10. Homemaker- Get tips on how to be frugal and organized in customer’s

homemaking skills. Know how to keep customer’s home safe, comfortable

and cozy and household running efficiently.

GROUP MEMBERS

Chamudi Herath HD-UGC-102032

Pavan Chandrasiri HD-UGC-102012

Anushani Thilakarathna HD-UGC-102083

N Z Sapideen HD-UGC-102080

Ayesha Iroshani HD-UGC-102033

Prabashana wijesinghe HD-UGC-102093