Revenue Models
In this section you will learn
about various models for generating revenue used by Web businesses, including
Web catalog, advertising-supported, advertising-subscription mixed, and
fee-based models. These approaches can work for both business-to-customer and
business-to-business electronic commerce.
Web Catalog Revenue Model:
Many companies sell goods and services on the
Web using an adaptation of mail order catalog revenue model that is over 100
years old. In this traditional catalog-based retail revenue model, the seller
establishes a brand image and then uses the strength of that image to sell
through printed information mailed to prospective buyers. This model is often
called the mail order or catalog model, has proven to be successful for a wide
variety of consumer items, including apparel, computers, electronics, house
wares and gifts.
Companies can take this model
online by replacing or supplementing their print catalogs with information on
their Web sites. When a catalog model is expanded this way it is often called
the Web catalog revenue model. Customers place orders through the Web site or
by telephone. This flexibility is important because many customers are still
reluctant to buy on the Web. The first few years of consumer electronic
commerce, most shoppers used the Web to obtain information about products and
compare prices and features but then make their purchases by telephone. These
shoppers found early Web sites hard to use and were often afraid to send their
credit card numbers over the Internet. Although these fears are less prevalent
today, most companies that use the Web catalog revenue model do give customers
a way to complete the payment part of the transaction by telephone or by mail.
In our selected companies, both company uses catalog based revenue model.
SWOT analysis
Strength
·
Ufone has network coverage in more than 750
cities, towns and across all major highways of the country.
·
Ufone provides International Roaming
facility with more than 150 international operators across 79 countries.
·
Ufone is proud to have an efficient and
friendly customer service through 21company-owned Sales & Customer Service
Centers and nearly 250 franchisees across
the country.
·
Ufone has always believed in a solid commitment
to growth, security and reliability. Therefore, Ufone has always balanced
its expansion efforts and quality of service. With a total current
investment of $400 Million.
·
U tunes was launched on 4th Dec2007 which
attracted many people towards ufone.
·
Achievement indeed, especially considering
the fact that two new international players also entered into the
market in 2005.
·
While keeping its tradition of being the
trend setter in the industry, Ufone changed the image of mobile phones
from a luxury only affordable by the elite, to necessity affordable by the
common man.
·
Ufone increased its focus on the youth
segment (which comprises 50% of the population), with the Prepay brand
·
U fone has the ability to retain its
existing customer base with a high level of customer satisfaction via
optimum network service and a 24 hour call center facility.
·
It has the post paid service that is
normally to attract the Business class people. Most of the business and elite
class people use post paid and other services offered by the U fone.
·
Ufone has a subscriber base of 18.97
million as of October 2008.
·
U fone was the first cellular Company
in Pakistan that introduced the service of GPRS and
hence took the competitive advantage.
·
U fone has some exciting and energetic SMS packages
that made SMS almost free. They are offering Rs. 25, Rs.50, Rs.100, Rs.
150 SMS packages which its subscribers are really loving it.
·
U fone has some very exciting and low call
packages like “5 ka 15” , “u-one”, ucircle”, “ U fone ghanta”, “U fone has some
very exciting and low call packages like “5 ka 15” , “u-one”, u circle”, “ U
fone ghanta”, “U fone life package” and “ prepay Public Demand” etc
which attracted lots of customers towards it and many other cellular
company users are also switching to it.
·
U fone post paid is also offering black
berry set that is useful and tempting for the Business class.
·
U fone currently caters for international
roaming to more than 195 live operators across 119 countries and introduced
International roaming facility for Prepaid subscribers in Saudi Arabia, United
Kingdom, United Arab Emirates, Singapore, Portugal and Kuwait with lowest
rates, featuring no security deposit and activation charges. GPRS Roaming
facility is available with more than 75 Live Operators across 59 countries.
WEAKNESSES:
·
U fone does not have the proper lists
of its customers. It has the list but this list is not authentic which is
increasing the unauthorized use of its sim specially pre pay. U fone have
to take serious steps to properly list its customers to ensure that there is
no misuse.
·
It has many franchises in the whole country
but as its customers are increasing day by day so its present franchises
are not enough to fulfill the needs of it customers.
·
U fone also face problems and its network
get jammed on special occasions like Eid, Christmas, New year etc
·
U fone has the problem of voice quality.
Though its coverage area is vast and it covers more than 750 towns
and cities in Pakistan but the voice quality is not as good as it should
be.
·
U fone though has some unique and distinct
services but it has not yet given many innovative services as compared to
other cellular companies.
·
U fone was the first to introduce the SMS
packages but their packages are not flexible enough and its charges are only on
monthly bases while it should be on both monthly and daily basis.
·
Call rates from u fone to u fone is
very cheap but to other networks its rates are expensive.
·
Its coverage on Southern part of Pakistan
is quite good but in northern areas its coverage is a bit poor.
·
In U fone web support is not available.
·
It’s customers service staff need training
because at many franchises their employees are have been complained about
behaving rudely.
·
If Ufone company have to progress and
grow in market it has to improve its advertising campaign. Its
advertisements are not good and eye catching.
·
Being the part of PTCL it has to
face many problems like strike by employees etc.
·
When U fone came into the scene in Pakistan
cellular market Mobilink was already prevailing in the market and it was
all Mobilink monopoly that time. Though with the passage of time U fone took
many customers of Mobilink but still Mobilink has large number of users
because it was first to Pakistan’s cellular market and this is the competitive
disadvantage to U fone.
·
U fone is plagued with some internal
problems like when it is privatized to Etisalaat being the part of the PTCL
many employees were not happy with the pay scale that they were
offering.
OPPORTUNITIES
·
U fone could develop some new and
innovative services to attract customers and some of the suggestions are as
under which will help them to increase their revenue. It should introduced International SMS packages
like local SMS. Already U fone is offering lowest International SMS
rates but if they introduce some package like this it will get lots
and lots of success.2.They should also
introduce some International call packages to Middle Eastern
countries because there are lots of Pakistanis who are living in those countries
so people will definitely be tempted towards such package.3.In “ U
fone ghanta” package time of
the package should be extend two more hours so that more
& more people will use this service and causing U fone to generate more
revenues.
·
U fone should develop some new
franchises in remote areas so that people will get more and more benefit
from it and it will help to increase their customers.
·
As in Pakistan Youth is almost the 50% of
the population so U fone can take advantage of this demographic situation
and should introduce more and more services and packages that attracts youth
towards it.
·
U fone should extend its
network coverage area to Northern part of the country as well because
in that part not too many companies are giving services and if Ufone
give its service there then it will definitely attract people and its
number of customers will shoot like a rocket.
·
It should also introduce some
packages for internet users on mobile if it do so then many people will
switch from other networks towards it.
·
If U fone enhance its voice quality then
definitely it would be prefer more by customers.
·
U fone should import technological
equipments from China because they are giving the best technology at very
low rates so it will not only help U fone to be ahead technologically
but also will help U fone to decrease its cost.
·
U fone can surprise its competitors by
introducing “U fone kiosk”. These will be ATM like machines and that
will give 24-hour service to U fone subscribers to load the
balance just like they take money from ATM.
THREATS:
·
As U fone is cellular company
and there is cut throat competition among cellular companies in
Pakistan. There are six other companies also working in Pakistan so U fone
would have to face some growing competitive pressures.
·
Pakistan is facing some serious economic
problems now days so that would also effect U fone. The current recession
in market is not good for any kind of business including
telecommunication.
·
In Baluchistan and FATA where U
fone already has network coverage is in danger because of
critical situation and operation being held there. Investment of U foneis in danger.
·
U fone penetrated in the market from 2005
to 2006 quite rapidly but since then it is experiencing a bit slower growth.
·
By the arrival of China Mobile Company
(Zong) in cellular industry of Pakistan the U fone and other companies now
have to face the severe competition. As Zong is introducing some various
attractive packages of both SMS and calls to attract customers. U fone
have to develop strategies to counter their strategy and to survive in the
market.
·
The key threat to U fone is also some
adverse Government policies of implementing Tax on
telecommunication industry that will ultimately affect the revenues.
·
There are some rumors about the shares of
PTCL in the market. Being the Subsidiary company of PTCL, U fone will also be
affected by that.
PEST Analysis of Ufone:
In PEST P stands
for Political, E stands
for economical, S stands
for social and T stands
for technological analysis of industry with respect to their environment. The
organization's advertising surroundings is made up from:
1. The organization
inner environment e.g. staff (or internal customers), office, technology, wages
and finance, etc.
2. The organization
external-environment e.g. our external customers, agents and distributors,
suppliers, our competitors, etc.
3. The country
forces affecting the environment e.g. political forces, Economic forces,
Socio-cultural forces, and Technological forces. These are known as PEST
factors.
Political:
Political
environment of Pakistan is stable in the current situation and country is not
progressing in terms of economic growth that was expected. Environment is
investor non-friendly & telecommunication sector is under regulation.
Before WTO implementation government already took steps in regulation of
telecommunication sector.
Economic Factors:
Marketers
should consider long term and short term state of a trading
market Inflation is being controlled by state bank and under strict eyes
but unemployment rate is going up & up with the increase of level of
poverty. Economic instability is worsening day by day as liquidity crunch is
prevailing in the world
Socio-Cultural:
As Pakistan
is an Islamic country and people are very strict in case of Islam anything
against the philosophy of Islam on either print or electronic media are treated
as against Pakistan. Most of the people dislike anything extra-ordinary or
something which sabotage their culture or subculture. Companies who are
targeting upper-end of market mostly published and aired their advertisement in
English language. In metropolitan cities women are doing work along with their
other responsibilities but other than metropolitan cities it is difficult for
women to convince their parents and spouses for works
Technological Factors:
Companies have
technology with which they can compete in the Pakistan and now companies are
investing in their infrastructure to not only expand but also to upgrade their
existing structure. Currently all companies except Zong & Instaphone are
providing Multi-media Messaging Services (MMS), General Packet Radio Service
(GPRS), Virtual Private Network (VPN), Pocket Stocks, Conference Calling,
Wallpapers Animated pictures Polyphonic ring tones (WAP), and Voice Mail at low
price and Ufone is proving an addition feature that one can see TV channels on
their cell. Ufone shifted its whole network from 900 MHz to 1800 MHz offer
Value-Added Services like General Packet Radio Service (GPRS), Multi-media Messaging
Services (MMS) and Virtual Private Network (VPN) etc
SWOT analysis Of Telenor:
Strengths:
·
Telenor is a multinational company which is
one of its biggest strengths. It can boast about its big investment and
strong company culture.
·
Telenor Pakistan boasts customer care
better than any telecom company in Pakistan. Its main aim is to provide its
customers with the best possible service. 24 hr help line is available for the customers
help if they need it.
·
Telenor’s network service is remarkable
throughout the country. The signal quality is good and its signals are
available even in the most remote areas.
·
Telenor covers a total of coverage area in
more than 3000 cities, towns and highways throughout Pakistan, making it the
2nd largest GSM service provider in Pakistan. Telenor Pakistan has more than
5,000 cell masts throughout Pakistan, making it the 2nd largest network in
Pakistan. It has GPRS service and EDGE service across its network in Pakistan.
Telenor has a strategic alliance with Nokia Siemens Networks for expansion
in Pakistan. Telenor currently has these dialing codes, 0342, 0343, 0344, 0345,
0346, 0347, and 0350.
·
Being a multi-national company telenor has
got good fund backing and is able to compete with the well established
companies like Mobilink and Ufone. With its cash it is able to make outstanding
marketing strategies.
·
Telenor targets different types of
customers at the same time. With Djuice its main aim is to get hold of the
youngsters. They do this by providing cheap SMS rates. With their post-paid
package³Persona´ they target more of the executive class.
·
Telenor has a strategic alliance
with Nokia Siemens Networks for expansion in Pakistan.
Weaknesses:
·
Biggest disadvantage for telenor is the
relatively low market share. Mobilink and Ufone have already settled down.
Heavy investment and good marketing strategy is required to break the other
company’s monopoly in the telecom industry.
·
Switching cost of customer from one service
provider to other is low. Fewer stakes are involved with one company. Customer
is getting less differentiation from all the service providers. A service of
one provider, if not perfect is a good substitute of the service of others.
Pricing is going down quality is improving and customers enjoying more
power
·
On the other hand differentiation between
the services players already offering in Pakistan telecom industry are not much
distinct from one other. That means if government liberalized its regulation more
there is potential in other new entrants from abroad to invest in telecom
sector of Pakistan. On the other hand it might be the demotivating factor
because of less differentiation creative new entrant might not enter
easily.
·
Initial years were not good as the entry
into the telecom industry was not at all easy. The company also had to bear
losses after the propaganda was made against the Norwegian based telecommunication
company after the publication of caricatures of the Profit.
Opportunities:
·
A number of opportunities exist in the
voice telecommunication space, which are centered on obtaining the necessary
licenses and investing in the appropriate infrastructure. A number
of players have already begun to invest in the infrastructure by
obtaining comparable data and video communication licenses and are now in a
position to exploit the voice market. This in no way limits new entrants to
enter the market but rather provides acquisition and consolidation opportunities.
·
Obtain one of the existing
cellular companies. Valuation could range between 8-12 times earnings.
·
Market size is the biggest ever opportunity
in Pakistani telecom sector. Almost 80% of population is living in rural
areas of Pakistan in which above 70% have no access to
cellular connections. That is market opportunity which any operator can
avail by applying expansion strategies.
·
Inefficiency and poor network service of other networks:
·
Poor network service by the other networks
is an opportunity for telenor to exploit. If they continue their good service
to its customers, its customer base is only going to increase. Other companies’
loss is going to be telenor’s gain.
Threats:
·
Government is now stable from the day
President General Musharaf has taken over. Therefore telecom industry of
Pakistan has been experiencing growth since last one and half years. Current government
has liberalized the taxation and licensing polices in order to attract more and
more foreign direct investment in the country.
·
But this political instability can occur if
the government changes and bring new policies which might not be in favor of
telecom industry.
·
Telenor had to face severe criticism from
the religious forces in Pakistan after the publishing of caricatures on
the Holy Prophet (P.B.U.H).
People called for the total opposition of the Norwegian based
company.
·
It is a big threat to the company as it
cuts down companies profits. Moreover, people can even shift to other network
who have coverage in those areas. So the company should take notice and try to
provide service in every nook and corner of the country.
Telenor PEST analysis:
Political Analysis
Political factors are those which
are directly controlled by the political parties and Government they could be
able to influence directly in any situation or in any industry. So they create
a major impact on any industry. In Pakistan Political environment was not stable that is the
major threat for telecommunication industry because no one knows at what time
Government will change and with the change of government policies will also
change. In Pakistan Risk of
martial Law is always threat for all the industries and in the dictatorship
they could not be able to explore themselves and do not grow as they could be. Terrorism is the Major problem that
is facing Pakistan in now a day that is the most crucial factor that is hurdle
in the growing in the telecommunication sector because no one knows about the
terrorist activities. In
Pakistan government dictates the pricing regulations so that influence the
smooth working of the telecommunication industry. In Pakistan Government is changing the policies
very rapidly so that creates instability. Now the government of Pakistan is trying to give the maximum
Protection to this sector and passing number of Laws to make it more safe and
stable. Government
of Pakistan had developed Pakistan telecommunication Authority (PTA) so that
helps in the establishing Business in Pakistan in more efficient manner. Government
is trying to provide investor friendly environment to give the more benefit to
the investors and give them maximum safety.
Economic
Analysis
Economic factors are directly
controlled and influenced by the financial institutions like State Bank of
Pakistan (SBP). So they help the industry in giving economic soundness and
provide financial aids to survive in the time of crises. In Pakistan Although
an proper Institution for telecommunication sector working (PTA) but Government
is influencing the working of that department and imposing the policies made by
politicians. Overall economic conditions are not very good
for any industry because rate of inflation is increasing day by day and value
of currency is going down which causing increase in the value of loan payable
that is another major threat for telecommunication industry. In Pakistan all
the financial institutions are controlled by government rather than the head of
financial Institution State Bank of Pakistan (SBP). Rate of interest is
increasing day by day it is approximately 14.00% which is higher than any
country in the world so it makes impossible for the telecommunication industry
to take loan facility. Risk rate of economy of Pakistan goes to 3 out of 5 that
is the alarming situation for the Pakistan as well as all the industries of
Pakistan. Currently government has increased the taxes on the telecommunication
sector so that reduces the income of the telecommunication sector some of the
examples of that are given below etc...
·
Pre-paid customers were
charged 10 per cent withholding tax on every new load, which was deducted in
advance
·
With 15 per cent sales tax on
every call increased the sales tax from 15 per cent to 21 percent for mobile
users.
During 2010 telecommunication
sector attracted US $ 142.7 million FDI which was 26.4% of the total FDI in the
country during this period. So government is trying to give maximum benefit to
the telecommunication industry. During the quarter ending December 2009,
telecom sector Labor Cost of Pakistan is very Low as Compared to other
Countries so that is also an opportunity for the Telecommunication sector. Telecommunication
industry is the fastest growing industry in the Pakistan that shows that
investment is quite comfortable in telecommunication sector.
Social Analysis
Social analysis is directly
attached with the people and with the culture in which they are working if they
try to dictate the social factors that create the threats to that industry and
if they work within the social norms then social factors become the key to
success. Pakistani people are more
social so they have family system and they want to remain in contact with other
through any means so that is the opportunity for telecommunication sector to
capture the feelings of the people. Pakistani
people celebrate a lot of festivals on that occasion they try to make contact
to their all family members and other at any cost these occasions are
Jashn-e-Baharan, Eid Celebrations and other cultural festivals. They create the
lot of opportunities for telecommunication industry so they make calls to their
relatives particularly on that festivals. The total population of
Pakistan is approximately 169,248,500. The population is increasing rapidly
which increase the number of cellular usage and help in projecting high
profits. Some campaigns to educate
people and develop the positive behavior in that social culture. Telenor is
taking initiative in this regard.
AJ NAE BOLO GY TO KAL BUGHTOO
GY {KhamoshiKa Boycott} (Djuice)
KRO MUMKIN (Telenor)
Low Educated people could not
be able to understand the language of telecommunication (Djuice etc.).That create
misunderstanding and create threat about the particular package. Corruption is
the major threat for any industry in the Pakistan that is because people are
unaware and uneducated but now these telecommunication companies are working on
that like. Although these companies are bringing positive change in the society
but also destroying the social culture and providing the negative attitude to
the young generation of the country by providing late night services that is
affecting the education of the young generation.
Technological
Analysis
Telecommunication technology
is changing the behavior of the people and providing them opportunities to get
the bright future. Due to latest technology the cost of telecommunication
industry is decreasing and they are giving lowest rates to the peoples to
remain in contact with relatives and with their families. Introduction of CDMA (Code
Division Multiple Access) Technology
in the mobile Sims is also creating the Opportunities for the telecommunication
industry. This technology gives less radiation then GSM technology. The
latest technology of 3G mobile communications has been earmarked and PTA will
soon be inviting applications for 3G spectrum auction. This technology will
increase operating capacity. The current focus of the telecommunication
industry is on increasing the coverage rather then up gradation of the systems
they should upgrade the systems to meet the requirement of the modern world.
Recommendations:
Ø User friendly
Ø Clear policy
Ø Less ambiguous
Ø More rapid technological advancements
Ø Area coverage
Ø Online sim tracking with privacy
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