Table of ContentsINTRODUCTION...........................................................................................................................................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 following1:

1 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

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VISION:

WE'RE HERE TO HELP

We exist to help our customers get the full benefit of communications services in their daily lives.

VALUES4

EXTERNAL ENVIRONMENT

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

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MAKE IT

EASY

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.

KEEP

PROMISE

S

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

BE INSPIRING

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

BE RESPEC

T-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. We believe loyalty has to be earned.

POLITICAL

Tax ratesGovernment RegulationsPTASpecial tariffs

ECONOMIC

Level of disposable incomeConsumption patternsDemand shifts for goods/servicesIncome differences by region/customerPrice fluctuationsTax rates

SOCIAL

Per capita incomeBuying habitsEthical concernsAverage level of educationGovernment regulationAttitudes toward customer serviceAttitudes toward product qualitySocial responsibility

TECHNOLOGICAL

Power cutsFibre and opex

COMPETITVE

SEGMENTATION

Market

Segment

Tod

ay

Feature Year

Estimate

Existing Product Profitabi

lity

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

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Market Share 0.2 4 0.8 2 0.4 3 0.6 2 0.4

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 competitor’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

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HUMAN CAPITAL DIVISION

People Excellence & Business Process ImprovementOrganizational Support ServicesSafety and Security

FINANCE DIVISION

Business Planning & FinanceProcurementRevenue Assurance & Fraud ManagementCredit ControlAccountsTreasury and Financial OperationsAudit and Internal Control

IT DIVISION

Business Support SystemIT OperationsIT Security

TECHNICAL DIVISION

Network Planning & DesignImplementationOperations & MaintenanceReal Estate & Site Acquisition

COMMERCIAL DIVISION

Sales & DistributionMarketingCustomer RelationsSegments & PricingProducts & Platforms

LONG TERM OBJECTIVES1. To deliver increased profitable growth

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

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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.

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%

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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

STRATEGY IMPLEMENTATION

OBJECTIVESPrepaid- djuice, talkshawk

Postpaid- 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

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POLICIES

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.

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POLICIES

Telenor's competitiveness in the market is based on good products and services at the right price. Always meet the group's competitors in an honest and professional manner.

Customers shall be met with insight, respect and understanding. Always try to fulfil the needs of the customer in the best possible manner, within the guidelines for Corporate Responsibility that apply to the business. Customer's personal information shall be protected in accordance with the relevant laws on protection of personal data.

Suppliers shall be treated impartially and justly. Suppliers in competition for contracts with Telenor shall at all times be able to trust Telenor's selection processes. When selecting suppliers follow the group's established guidelines and routines at all times.

As an employee of Telenor you shall not hold another position or carry out work for others during working hours without prior express written permission from your superior.

Telenor is firmly opposed to all forms of corruption. Never offer or accept illegal or inappropriate monetary gifts or other remuneration in order to achieve business or personal advantages for yourself or others. Nor use agreements with middlemen to channel payment to anyone in such a way that may be interpreted as corruption.

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.

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.

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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

enhance cultural

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 are also provided with a

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Joining Book that comprises of the code of conduct and complete structure

of policies and values.

HUMAN RESOURCE STRATEGIESThe 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

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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.

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Passion for Business

Empower People

IntegrityChange and

Constant Renewal

Operational Ecellence

LEADERSHIP EXPECTATIONS

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 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.

DIVERSITYTelenor 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

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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.

STRATEGY EVALUATION

REENGINEERING: AFTERMATH OF FINANCIAL CRUNCH

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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.

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Service Quality & Performance through a

superior network design

Convenience through the distribution setup

Simplicity and trust through pricing structure and transparency

Efficiency through alignment of structure

and strategy

COMPETITIVE ADVANTAGES OF TELENOR PAKISTAN

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 Employer 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

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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 provide connectivity 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.

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

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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

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 Diversifying into

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service

Make the post

paid package

more attractive

similar 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

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 its relative 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

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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.

FUTURE OUTLOOKFollowing can be the future plans of action that Telenor can pursue in order

to ensure sustainable growth:

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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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