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Telenor Pakistan Tore Johnsen, CEO Full-scale industrialisation 1 1 Pakistan – A great opportunity for Telenor z Population: 154 million z Population per sq KM: 193 z Population in urban areas: 38.8% z GDP per head: 2,210 (US$ PPP) z Real GDP growth 2004: 6.3% z Fixed line penetration (2003): 2.7% Sources: EIU (Economist Intelligence Unit) ITU (International Telecom Unit) 2 The regulatory and political framework z Telecom authorities promote transparency and a level playing field z Telecom policies well developed, implementation the key z Telenor to focus on strict business ethics and code of conduct 3 Deploying the Mobile Way from day one Building a greenfield z Critical success factors – – – – Time to market Efficient operation Standardised solutions Quality Regulatory issues and strategies Sales and marketing plans Network infrastructure Competitive situation Operation and maintenance Long distance and international licence IT and billing solutions Organisation and recruitment Legal and tax issues Customer PR and communication Site acq. and roll-out plans Company strategy and branding Distribution strategy and contracts Procurement 4 Business plans and financing Business scoping, work flow analysis Office facility management Quality assurance Network rollout 11 months from licence award to launch Licence awarded Business strategy and vendor selection in place Site acquisition Network design Launch Build Organisation April 14th 2004 May 2004 June 2004 Network Rollout (180 days) 15th March 2005 September 2004 •Launch Islamabad, Karachi, Rawalpindi, 15th March •Launch Lahore, Faisalabad, Hyderabad, 23rd March 5 Network rollout z Population coverage at launch: 32 million z Coverage end 2005: 1800+ base stations (175 cities) z Licence requirement 2008: minimum 70% of all administrative areas (45% population coverage) z Accumulated CAPEX end of 2007: US$600-700 million (excluding licence payments) 6 Telenor – building a strong brand z Telenor Pakistan takes position as the Quality Operator based upon – Simplicity – Attractiveness – Trustworthiness – Service Quality Innovator Quality & Customer Focus Price leader Product focus 7 344K subscribers after 17 days Market share (Q105) Instaphone Telenor 4% 6% Paktel 8% Ufone 22 % Mobilink 60 % Source: Based on local press reports 8 Telenor Pakistan guidance 700 110 100 GDP per head USD 2005 z 600 – Penetration around 10% – 550 Market share target 10% – 500 Government tax of approx. US$17 per new connection 450 expected to be halved – 400 General market ARPU 2000 2001 2002 2003 dilution GDP (USD bn) 2007 – z 2004 2005 90 GDP (USD bn) 650 z First year of positive EBITDA 80 2008 70 – Penetration around 20% – Market Share around 20% – 50 Blended ARPU US$5 -7 2006 60 2007 2008 2009 GDP per head USD Source: Economist Intelligence Unit 2005 9