Credit Management Policy

Credit Management Policy for Postpaid Subscribers of Grameenphone Ltd.
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Chapter 01
Introduction & Background of the Study
1 1.1
Introduction to the Report Rationale of the study
As I am student of BBA I have to work for a company at least 6 weeks as an intern. I have got the opportunity to work in Commercial Division of Grameenphone Ltd. to complete my internship. As my major is in Finance, I had to choose a topic where I can apply my course knowledge. I have found that there are some opportunities to apply my knowledge in my chosen topic which is Credit management policy for post-paid subscribers of Grameenphone Ltd.. Though I did not get any chance to work in Finance Division of Grameenphone Ltd, because they are not taking any intern at this moment, but I think the information company provides me and also my topic is quite related to my study. I think in future this report will help me to know about credit management system of postpaid subscriber of a telecommunication company. This thing can help me to develop my future career.
1.2
Statement of the problem
1.3
Methodology of the study
Information has been collected through primary and secondary in both methods. Primary Source For primary data I have communicated with my supervisor in Grameenphone Ltd. and other office colleagues. I have used data from a software that is used by Grameenphone named Business Support & Control System (BSCS) and Electronic Recharge System (ERS) to collect data about postpaid subscribers billing and payment system history. Secondary Source I have gone for secondary data from Grameenphone website and other relevant websites and I have taken help from some reference journals. Analysis After the data collection, analysis has been made using basic statistical tools. Bar charts and pie charts were used for presenting data.
In this topic I am going to find out answers of some questions like: what are the basic differences between a post-paid SIM card and prepaid SIM card, benefits of postpaid SIM card, billing procedure, bar and unbar procedure, International Roaming billing procedure, billing system between two countrys operators, recovery rate of due bills from subscriber of Grameenphone and action policy taken against who do not pay bills.
1.4
Objective of the study

Broad objective Credit policies maintained by Grameenphone for post-paid customers and their facilities, international roaming billing, bar and unbar procedure and the recovery rate from customers. Specific objective Post-paid customers billing system for Xplore, Business Solution and GP Public Phone, system of paying payment, bar and unbar system, credit limit, deposit policy. For International roaming subscriber; billing system, credit limit, deposit policy, payment system for involved companies and also for Grameenphone, bar and unbar system of connection. Recovery rate of credit from subscribers. Policies taken by Grameenphone Ltd for credit recovery.
1.5
Scope and delimitation of the study
As I am working in Commercial Division, my ability is much limited to collect financial information. I have to communicate with Credit Management department for information. As Grameenphone recently went for IPO, thats why internal rules and regulation gets harder for me to collect information. I will have to communication with my office supervisor for information. So it is tough sometimes to manage time from her. Sometimes feedback from her is not forthcoming or takes time. Also the time for the research is limited to only 6 weeks which might limit my opportunity to study on vast scale.
Chapter 02
Profile of Grameenphone Ltd.
Grameenphone Ltd. (GP) was the first company to introduce GSM technology in Bangladesh when it launched its services on 26 March 1997. GP is market leader in the cellular telecommunication industry of Bangladesh with a market share of 43.66% (Dec 2010) obtained cellular license on November 28, 1996 in Bangladesh from the Ministry of Posts and Telecommunications. GP is a joint venture enterprise between Telenor (55.8%), a telecommunications service provider in Norway, and Grameen Telecom Corporation (34.2%), a non-profit sister concern of the internationally acclaimed microcredit pioneer Grameen Bank. The other 10% shares belong to general retail and institutional investors. GPs cellular network in the country covers 98% of country's population through 12,700 base stations in more than 7200 locations. The entire GP network is EDGE/GPRS enabled that provides its subscribers access to Internet and data services from anywhere within the coverage area.
2.1 Shareholdings
Telenor Mobile Communications (TMC) TMC, a company organized under the laws of the Kingdom of Norway, seeks to develop and invest in telecommunications solutions through direct and indirect ownership of companies and to enter into national and international alliances relating to telecommunications. It is a subsidiary of Telenor Mobile Holdings AS and an affiliate of Telenor. Telenor AS is the leading Telecommunications Company of Norway listed on the Oslo Stock Exchange. It owns 55.80% shares of Grameenphone Ltd. Telenor's strong international expansion in recent years has been based on leading-edge expertise, acquired in the Norwegian and Nordic markets, which are among the most highly developed technology markets in the world. It has substantial International operations in mobile telephony, satellite operations and pay Television services. In addition to Norway and Bangladesh, Telenor owns mobile telephony companies in Sweden, Denmark, Hungary, Russia, Ukraine, Serbia, Montenegro, Thailand, Malaysia, Pakistan and India with more than 174 million mobile subscriptions worldwide as of December 31, 2009. Telenor uses the expertise it has gained in its home and international markets for the development of emerging markets like Bangladesh. As part of the conversion of Grameenphone from a private limited to a public limited company, Telenor Mobile Communications AS transferred 10 shares each on May 31, 2007 to its three (3) affiliate organizations namely Nye Telenor Mobile Communications II AS, Norway; Telenor Asia Pte. Ltd., Singapore; and Nye Telenor Mobile Communications III As, Norway.
Grameen Telecom Grameen Telecom, owns 34.20% of the shares of GP, is a not-for-profit company in Bangladesh, working in close collaboration with Grameen Bank, winner of the Nobel Peace Prize for 2006 along with its founder Professor Muhammad Yunus. The internationally reputed bank for the poor has the most extensive rural banking network and expertise in microfinance. Grameen Telecoms mandate is to provide easy access to GSM cellular services in rural Bangladesh and creating new opportunities for income generation through selfemployment by providing villagers, mostly to the poor rural women with access to modern information and communication-based technologies. As part of the conversion of Grameenphone from a private limited to a public limited company, Grameen Telecom transferred one share each on May 31, 2007 to its two affiliate organizations namely Grameen Kalyan and Grameen Shakti. The rest 10% of Grameenphone shareholdings includes general public and institutions.
2.2 Mission, Vision and Values

GPs Mission: Leading the industry and exceed customer expectations by providing the best wireless services, making life and business easier
GPs Vision: We exist to help our customers get the full benefit of communications services in their daily lives. We want to make it easy for customers to get what they want, when they want it. We're here to help. This means that Grameenphone helps their customers to get the best out of communications services in their daily lives. Were here to help is not a slogan; its a way of life for all the stakeholders of Grameenphone. GPs Values: Make It Easy We're practical. We don't over complicate things. Everything we produce should be easy to understand and use. No waste. No jargon. Because we never forget we're trying to make customers' lives easier. Keep Promises Everything we set out to do should work, or if you don't get it, 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 into the things we do. Everything we produce should look good, modern and fresh. We are passionate about our business and customers. Be Respectful We acknowledge and respect the local culture. We are respectful and professional in regard to all our interactions, both internally and externally. We are open, helpful and friendly.
2.3 Organization Structure

In the fast-paced world of telecommunications, vibrant and dynamic Corporate Governance practices are an essential ingredient to success. Grameenphone believes in the continued improvement of corporate governance. This in turn has led the Company to commit considerable resources and implement internationally accepted Corporate Standards in its day-to-day operations. Being a public limited company, the Board of Directors of Grameenphone have a pivotal role to play in meeting all stakeholders interests. The Board of Directors and the Management Team of Grameenphone are committed to maintaining effective Corporate Governance through a culture of accountability, transparency, well-understood policies and procedures. The Board of Directors and the Management Team also persevere to maintain compliance of all laws of Bangladesh and all internally documented regulations, policies and procedures.
Tanveer Mohammad Chief Technology Oficer
Arild Kaale Chief Marketing Officer Credit Management Policy for Postpaid Subscribers of Grameenphone Ltd.
Raihan Shamsi Deputy CEO Tore Johnsen Chief Execituve Officer Hossain Sadat Company Sectretary
Kazi Monirul Kobir Chief Communcation Officer
Raihan Shamsi Chief Financial Officer
Arfinn Grover Chief Financial Officer
Mahmud Islam Chief Corporate Affairs Officer
Figure 2.1: Organogram of Grameenphone Ltd.
Grameenphone is a truly transparent company that operates at the highest levels of integrity and accountability on a global standard. The shareholders of Grameenphone contribute their unique, in-depth experience in both telecommunications and development. The members of the top management equally contributed to Grameenphones superior leadership, by carrying out their unique roles. They worked well together, respecting each others abilities, & arguing openly & without any rancor when they disagree.
2.4 Products and Services

Products
Grameenphone mainly provides the telephony service to the customers. But in the recent years GP is showing interest to capture the whole customer insight by offering them different type of products. It offers pre-paid products like Smile, Shohoj, Aapon, Bondhu, Djuice, Baadhon, Business Solution, Ekota, GP Public Phone, BPO and Village Phone. In addition it has a very exclusive post-paid package named Xplore. It also offers internet modem along with an internet sim that may be pre-paid or post-paid.
GP Products Consumer prepaid Shohoj Bondhu Apon Djuice Smile Business Solutions BS postpaid BS prepaid Ekota Consumer postpaid Xplore postpaid P.C.O GPPP VP
Figure 2.2: Products and Services of Grameenphone Ltd. Services

Grameenphone also introduced a number of value-added services during the last 13 years. It may be noted that Grameenphone was the first mobile phone operator in the country to introduce value-added services like Voice Mail Service, Text Mail Service and fax and data transmission services, in particular Internet access, downloadable content and ring-back tone services.
Grameenphone also launched the Wireless Application Protocol (WAP). Other services include International Roaming, SMS (short message service), SMS Push-Pull Services, Voice Mail Service (VMS), Voice SMS, Web to SMS, Cell E-mail, MMS, EDGE/GPRS, GP World, BlackBerry services, Welcome Tunes, Call Block Service, Dynamic Pricing, E Bill, Music Radio, Study Line, Mobile Backup Service and Missed Call Alert. Peoples life is now much easier as they are getting services as per their necessities. Cell phones are now something more than just a cell phone. And Grameenphone pioneered in taking telecom industry to new and more dynamic heights.
Special Feature
Grameenphone is always working relentlessly to introduce new features and packages in the industry. They are always looking for a way to make life simpler for their customers. That is why, for the first time in Bangladesh, Grameenphone launched the feature My Zone. It is a magnificent feature where customers might get upto 83% discount on a base tariff of BDT 1.50/min for on-net calls, BDT 1.00/min for F&F and community calls. The discount is based onthe network usage of the area you are in and the time of the day. It is a fully automated discount system based on previous usage patterns. GP has already launched it all-over the country and it is getting hugely appreciated and accepted by our customers. Even with such a success, Grameenphone is constantly monitoring the customer satisfaction level and striving hard to ensure and sustain maximum satisfaction. This shows the integrity with which Grameenphone does its business. And it is not a surprise why they are the market leaders since the birth of this industry.
2.5 Operating Environment

This part of analysis captures the external factors applicable to all telcos in Bangladesh market. Consequently specific factors, which may be unique to a particular company, are not considered in this section. In other words, the growth and profitability potential for the whole telecom industry of our country is considered. The analysis of operating environment is further broken down into the following key sub-elements: 1. Industry Outlook 2. Market Growth 3. Market Share 4. Competitive Environment 5. Regulatory Environment
2.5.1 Industry Outlook The telecommunications industry roots are in government sanctioned monopolies. Following a worldwide move to deregulate and privatize the dominant national carriers, along with the proliferation of wireless technologies and global adoption of Internet Protocol (IP) transmissions, intense competition and growing fragmentation are rapidly reshaping the industry that has been highly growing and stable over a decade.
The telecommunication industry of Bangladesh as a whole possesses great potential. Penetration rate of 40% of wireless as of December 2010 indicates its comparability to other neighboring countries. At the very inception, cell phone usage was expensive and could only be afforded by the affluent. Well-established foreign and local companies have invested heavily for the development of the telecommunication infrastructure of Bangladesh thereby creating a competitive environment, which has eventually led to drastic reduction in tariffs. Telecommunications is a highly capital intensive industry. The significant investment in network infrastructure for maintenance and the introduction of new services to replace declining legacy products is likely to be permanent characteristics of all sectors of the telecommunications industry, worldwide. Despite the expanding use of telecommunications networks to deliver a broader array of service offerings, telecom revenue growth rates are multiple of GDP growth. Furthermore, fast moving technological trends have generally reduced asset life cycles. Together with increased competition, the return on investment in future will be under more pressure than has been the case for the industry historically. Key Issues Going Into the Next Decade Competition will only intensify Technological developments have created new competitors and have accelerated installation of new products and services over recently upgraded networks. The standard PTT (Postal Telephone and Telegraph) moniker of the telecommunications industry has given way to diversified communications providers, which can offer the same level of services over copper, fiber or through the air. The double-edged sword of IP standards presents operators with a tremendous opportunity to deploy new products and features to their customers, as well as adding a new threat by allowing competitive entry, evidenced by the success of Voice Over Internet Protocol (VOIP) offering by cable operators and broadband resellers. Regulation remains important Regulations under which telecommunications issuer operates are a major influence on credit quality, as they determine the barriers surrounding the competitive environment and form the foundation for the operators to generate returns on investment. Regulators favour industry stability over wide-open competition. Regulators are keen to bring all telecos under the preview of listed public limited company. The process is on. Within next two to three years all the wireless operators are likely to be listed on the stock exchanges. Grameenphone Ltd. got listed in the Bangladesh capital market on November 11, 2009.
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Capital intensity will persist Telecommunications is a highly capital intensive industry as providers continue to modernize their networks to meet the rapidly increasing demands for bandwidth, driven by expanding usage of data products, both from residential and business customers. The proliferation of video on the Internet further strains the operators bandwidth demands. Consequently, telecommunications providers have increased networks spending on the last mile and distribution facilities. This is the remaining piece of the telecommunications infrastructure that needs to be upgraded following the long haul network expansions in the late 1990s. Mergers and acquisition activity expected to remain high Merger and acquisition activity in the telecommunications sector expected to remain high globally. Based on the present penetration rate and high future potentiality, global large operators will find Bangladesh telecommunication market as an attractive investment place. To enter the market, they will find acquisition of existing license more lucrative than acquiring new licenses. 2.5.2 Market Growth The telephone market of Bangladesh is likely to remain highly profitable. Both markets (wire line and wireless market) are growing and the growth is likely to continue at a consistent rate for next few years i.e 3-5 years. Industry growth rates, which are increasing, evidence a sector, which is likely overall to qualify as investment grade when considering this characteristic in isolation. Unlike the wireless segment, the growth of wire line segment would not accelerate, however, it is expected that the growth rate of wireline segment would be flat for next few years then it will be declining. The graph below depicts the total subscribers in million along with penetration rate from 2004 to 2010, where the Bangladeshi telecom market shows tremendous potential for growth. Year-to-Year growth rate of subscribers from 2007 to 2010 stands at 65%, 54%, 20% and 31%. Mobile penetration has already exceeded fixed line and is driving the bulk of the growth in terms of incremental subscribers.
Year Penetration (mn) Subscribers (mn)
2004 3 3.9
2005 6 8.9
2006 12 17.1
2007 19 28.3
2008 32.04 43.7
2009 32.77 52.43
2010 40.69 68.64
Table 2.1: Market penetration and subscribers' growth
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80 70 60 50 40 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 Subscribers (mn) Penetration (mn)
Figure 2.3: Bangladesh mobile market growth 2.5.3 Market Share GP has been the market leader at a stretch for more than a decade. The mobile telecommunication industry had 68.64 million subscribers in December 2010 of which GPs subscriber base stood at 29.97 million as of December 2010 which is 44% of the total subscriber in the Industry. The six operators of the Industry had a cumulative net subscriber addition of 4.46 million in the period Jul09 Dec09, 6.15 million net addition in the period Jan10 Jun10, 7.80 million net subscriber additions in the period Jul10Dec10, which shows a rising trend in mobile penetration. GP possessed an average month on month market share of 44% in the period Jan10 to Dec10. The relative position of GP among the operators is indicative of the likely sustainability of its operating position and ability to exercise control over the nature and pace of development. The present subscriber base indicates that the customers perceived GP well and shows its ability to leverage off existing capabilities to develop/support revenue, and bring innovation in products and services development. GP is well equipped and ready for future market development/dynamism. Operators/Year GP Robi Axiata Banglalink Citycell Teletalk Airtel Total Dec-07 16.48 6.4 7.08 1.41 0.85 2.15 34.37 Dec-08 20.99 8.2 10.33 1.81 0.98 2.33 44.64 Dec-09 23.26 9.29 13.87 1.95 1.07 2.99 52.43 Dec-10 29.97 12.368 19.327 1.811 1.211 3.956 68.643
Table 2.2: Mobile subscribers of Bangladesh (mn)
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Market share is important as barriers to entry remain high as it requires vast upfront capital costs to establish a robust network; market acceptance of the products or services of existing competitors. Month to month market share position reflects that GPs stable market share of 44% in from January 2010 to December 2010. On the other hand, Airtel has achieved 6%, ROBI Axiata 18%, Banglalink 28%, Citycell 3%, Teletalk 2% market share as of December 2010. It is an indication of competitive market position where best service provider with low cost innovative products would be positioned best. The same picture is depicted from month on month subscriber growth rate, which is plotted below:
Operators/Year Jun-10 Jul-10 GP Robi Axiata Banglalink Citycell Teletalk Airtel Total 3.56% 1.28% 3.27% 0.00%
Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 2.62% 2.04% 3.18% -0.58% 1.25% 1.18% 1.66% 1.81% 2.36% -3.10% -1.63% 3.57% 1.61% 3.91% 2.56% 2.57% -3.31% 0.58% 4.19% 3.04%
-0.70% 6.26% 2.04% 4.37% 0.30% 1.30% 4.43% -1.05%
-3.44% 1.36% 4.97% 4.71% 2.64% 3.47% 2.37% 0.65%
-2.52% -1.12% -1.74% 2.92% 2.78% 3.97% 1.44% 3.76% 4.31%
Table 2.3: Month to month subscribers growth rate

In spite of high competition, I note that GP still affords significant operating advantage due to its brand strength, ubiquitous network, quality of service and product offering combined with existing customer relationships and ability to bundle multiple services. In addition, GP enjoys well-developed distribution capabilities, through call centers, retail stores etc. The mobile telecommunication industry still has potential to accelerate its revenue through diversification of service as a consequence of technological evolution with upcoming superior technology like 3G, wireless broadband etc. GP is still on strong footing. I expect through analyzing its management track record, strategies and policies as well as strong brand name and financial flexibility GP would be able to tap the upcoming market opportunity over the mid to long term. 2.5.4 Competitive Environment Competitive environment obviously relates to market share, but is not identical. In the market share I identify players with strong market positions, while in the competitive environment I highlight the highly competitive telecommunication market of our country, regardless of whether players with strong positions are apparent. I consider the competitive environment for this industry structure by looking at its number of players. At present there are 6 operators in cellular services, 1 in radio trunking services, 9
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operators include BTTB in fixed line services and another 8 operators got license for fixed line services. As such, the operators face high degree of competition which directly impacts its pricing power and marketing expenses, and hence its operating margins. Because of competitive nature of the market, first mover e.g. GP, in terms of technology and geographical footprint have an advantage over the latecomers. Number portability removes one of the key barriers to churn- that of the reluctance of changing phone numbers. GP focuses on retention of their subscribers as well as acquisition of new subscriber. Retention of high value customers are critical given number of portability and stiff competitive pressure. Because, barrier to switching has been high for long tenured customers given their larger contact base. 2.5.5 Regulatory Environment The telecommunications industry is of strategic importance to the nation. As such, its operating landscape is largely shaped by the countrys regulatory environment. Liberalization policies have been introduced in varying degrees, thereby shaping the level of competition faced by the operators. At the initial stage, there were monopoly in the mobile market and both access and call charges were unregulated, allowing operators the freedom to determine their own rates, which places the operators on a less competitive footing. As a result, customers had to pay high rates in absence of competition. The government in 1999 broke the monopoly and allowed other operators to operate. As a result in recent years, the market become highly competitive which lowers the tariff structure of every operator vis a vis contributes to the high growth of subscriber base and quality of service. Being the market leader and vast subscriber base GP would get competitive advantages over other operators. The acceleration of technological changes necessitates the regulatory environment to keep pace with its evolution, such that it increasingly supports the growth of alternative, more advanced and more efficient service providers. The Governments policy with respect to new technology is also an important element in shaping the future operating landscape. Typically, adopting new technology requires huge investment, from the operators point of view; these have to be weighted vis--vis future returns as well as timely implementation. As witnessed globally, the method of allocation of third generation (3G) licenses vis--vis WIMAX had important implications on the operating environment of telecommunications companies.
2.6 Strategy and Execution

GPs development and growth trend since its inception proves its effective strategic planning and efficient execution so far. The business model of GP is well focused to its vision supported by its efficient human resource through well planned leadership process and continuous quality of service monitoring.
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2.6.1 Business Model GPs business model dictates to a large degree its ability to generate and sustain operating cash flows and the stability of those flows. Diversification in GP has several different dimensions: product lines, customer segments and geographic reach, all of which enable GP to mitigate the effects of variation in demand or pricing in a given product or market. GPs diversified business model is robust because technological changes continue at a fast pace and an operator with strong wireless business is best positioned to evolve with such changes. The diversified player has a sounder platform for adopting a range of new products. It has the ability to strategically invest in emerging technologies and raise investments, depending on market acceptance of the new technologies, widening the opportunity for success. In assessing the level of competitive challenges, among other things, revenue trends, number of players, rate of access line change relative to demand growth as well as gross additions, churn levels and ARPU trends. GP is still a dominant provider of voice and data, with a heavy composition of enterprise customers and strong representation in the wireless market. 2.6.2 Leadership Process The Human Resources Division in Grameenphone is geared to meet GPs human resource development and training needs. In spite of its multinational characteristics, it emphasizes more on building local expertise in the telecommunication sector. Local employees are continuously being trained to take on new challenging leadership roles within the organization and fill senior management positions. The process of leadership identification and development at GP begins during the annual appraisal dialogue. Different types of leadership development needs are identified and accordingly relevant development plans are recommended by the supervisors. Some of the leadership development plans include: training, coaching, new tasks/project work, job rotation, secondment in other Telenor operations abroad and others. GP has agreements with the Stockholm School of Economics in Sweden, the Singapore Institute of Management, the Hyderabad-based Indian School of Business and the British Council for providing Management Development training to GP employees. In addition, GP provides educational grants every year to 100 employees encouraging employees to go for higher education. Moreover, programs like communication skills, teamwork, teambuilding, and problem solving and decision-making courses are offered for different level of employees. For the current and upcoming leaders of GP, Telenor CORE Leadership Training is offered every year. This program is designed to help leaders fulfill GP leadership expectations by increasing skills in practical leadership and their motivation to lead. GP focuses on 6 core areas in order to be successful which include Attractive and Easy, Involved Community, Enabling Regulatory Environment, Energized People, Efficient Operation and Motivated and Efficient Business Partners. The Senior Management functions through Management Team, which comprises heads of different department and senior managers. The management values individual excellence as well as team outcome. Senior level management is strongly involved and behind quality improvement within the company. Management function involves planning,
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communicating, measuring, changing and mentoring. It has clear standard benchmark through which performance is measured and rewarded. Specific guidelines and standards are adopted as part of its leadership process for holding managers accountable for quality, including supervisors and others, which are designed for different levels and functions within the company. 2.6.3 Management and Strategy The effective and efficient management and defined strategy are the ingredients for GPs present strong position in the market. In support of the above, looking at the organizational structure of the organization, the less dependence of management team on one or more person as well as coherence of the team, the independence of the management from the Board of Directors, and good track record of the management till date in terms of building up solid business mix, maintaining operating efficiency and strengthening the GPs market position. 2.6.4 Strategic Planning Strategic Planning process is based on at least next three years scenario analysis. Based on the midterm plan, it also chalks out annual plan at the beginning of each year. Strategic planning is used regularly to develop goals and objectives for improving quality. The organization has established a complete strategic plan for addressing quality improvement, including mission, vision, goals, specific tasks, targets and programs. All levels of the company participate in some form of strategic planning. Employees, suppliers, customers, and other stakeholder groups are actively engaged in strategic planning decisions. Management is found very involved in planning related activities. Overall planning is integrated into lower level planning at business unit levels and department levels for short-term and long-term decisions. Under the umbrella of Management Team, every department and unit has its own team who actively participates in decision-making process. The organization re-aligns or re-engineers the process from time to time to make sure it fits with strategies for work performance. The compensation packages include performance bonuses for every regular employee. Performance bonus is fixed considering companys performance and individual achievements. Company performance is measured through predefined Revenue Target, Market share position as well as EBITA Margin. Individual achievement measures through predefined goals set for each individual by the management as well as performance of the team. The management at the beginning of the year set departmental goals with high priority to low priority level. GP has a dedicated team named Business Intelligence Team which is responsible for collecting and monitoring the business dynamics of the teleco market. Strategic Planning process incorporates the behavior of its competitors and based on it the brand and product design team offers competitive products and value added services from time to time.
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Strategic planning includes key performance indicators, surveys, benchmark data, and other quality information to ensure that strategic planning is strong and viable for all parts of the company. Operating plans are developed throughout the entire company, linked to the company's overall strategy. Managers are held accountable for meeting strategic goals. 2.6.5 Information and Analysis Fully integrated and highly sophisticated MIS system ensures the high quality data management system of GP. From its fully automated data management system it generates Monthly Financial Report, Management Report, Monthly Executive Summary of the business and operation, ER Accounts, Monthly CAPEX Information, Monthly Divisional Profit and Loss Account, Monthly Divisional MIS, Mid Month Forecasted Financials, and Quarterly Group Cash Flow. All reports are part of decision-making process. Reports incorporate Actual position, Budget Provision and Variance Analysis. Quality related data is fully integrated and distributed easily within the organization. Processes for data and information management are timely, accurate, and useful throughout the entire company. Quality data is readily available for various processes within the company. Data is analyzed and transformed into useful information for identifying new opportunities for improvement. Benchmarks and comparisons are used to drive continuous quality improvements. The organization measures data through its MIS system related to customers, products, supplier performance, financial performance, and employee performance. Through checking the system it is found that data is useful and understandable for decision making. System generated information is reliable and is distributed to decision makers on a timely basis. GP as part of its MIS system tracks Market and Statistical Information. It analyses: Monthly operator wise subscriber base and its market share position, market growth trend, operator wise net adds, market share net adds, penetration rate, annualized churn, gross add mixing, churn mixing, subscriber mixing, Minutes of usage, AMPU, APPM services, APPM Airtime, SMS positions, SMS per subscriber etc. GP uses external benchmarks and competitive data to drive improvements, operating performances and planning. Competitive data is also found very extensive. Through its Business Intelligence Team it collects key cost, financial, operating, and other data and translating it into useful information for employees and decision makers, which supports both operating and long-term planning decisions. 2.6.7 Human Resources Capital Employee growth plans, including training programs, career development paths, evaluation / self-awareness processes, compensation, empowerment, and measurable results are full implemented and integrated with strategic planning process. Human Resource Division is part of the Management Team. GP focuses on 6 core factors for its success one of which is Energized People. Very high levels of involvement by employees are visualised in day-to-day operations and planning the business. People work well
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within teams and across organizational functions. Strong recognition programs are in place for rewarding employees who improve quality. The organization is very sensitive to the needs and requirements of employees, working hard to make sure employees are productive and satisfied. Senior management and middle level managers are very supportive of strong human resource practices to build and develop employees. Work teams and groups are empowered, providing valuable improvements in almost every part of the business. Employees have quick access to data for analysis and sharing of information in most parts of the company. Employee ideas for making improvements is strongly encouraged and acted upon throughout most of the organization. 2.6.8 Process Management Processes are well documented and controlled throughout the entire company. Practices are in place to consistently evaluate and improve processes. Critical processes are subject to rigid assessments on a regular basis. Analytical techniques are in place to identify and solve process management issues. Partnerships with suppliers and other stakeholders have been established to better manage processes for the benefit of all players. Design & Introduction of Products and Services: The organization systematically gather customer needs and desires, and then translate these customer inputs into revisions, modifications, and other standards for product and service bundling. Retained highest market share over the last 10 years is a clear indication of its success in product innovation and engineering. Production and Delivery Processes: The organization has control over processes, including control over variations and defects in processes that are used for producing and delivering products and services. The organization uses systematic and standard approach to evaluate processes for better quality, defects, and other operating performance attributes. Business and Support Service Processes: The organization manages quality control relates to routine business processes and support services such as human resources, finance, legal, payroll, public relations through pre-defined goals and goal achievement indicators as well as variance analysis. The organization structure and its functionality ensure the check and balances among and between the departments and units. Both top down and bottom up feedback system, coherence of the team, compliance department dedicated for resolving grievances as well as quality linked performance bonus help the management to reduce error in business processes. Supplier Quality: GP maintains its code of conduct for all of its stakeholders. It communicates quality standards and requirements to its suppliers and it has a quality assurance process to ensure that suppliers are meeting quality requirements. The
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Management Team evaluated the quality requirements of the suppliers. It has written procurement policies. The procurement policies are approved by the Board and the Board delegates financial and investment authority to the management based on its position. It was informed that GP at the beginning of the year make a budget of its next 12-month procurement and investment requirements and have it approved in the Board Meeting. Once approved, the management has the authority to implement it within time frame and as per budget (10%+). The organization has a cooperative relationship with its suppliers, including reward programs, certification and other policies, which in turn assist to build long-term relationships. Quality Assurance: The organization has internal audit department, which reports to the Board through CEO. The internal audit function encompasses on financial auditing and control. Besides, product and services audit including systems and processes are also under the purview of internal audit function. It is evident that organization practices regular follow up with assessments and effectively corrects the problem or resolves the issues that were identified. The process is also documented. 2.6.9 Customer Satisfaction A complete set of customer metrics (surveys, focus groups, exit interviews, etc.) reveals very strong performance for meeting customer needs and requirements. Additionally, measurements are tracking customer repurchase patterns and other behavior relative to the competition and these measurements are also very favorable. Management is very focused on the customer, promoting programs that enhance customer relationships. Senior management is very receptive to new ideas on how to improve customer service. Specific customer related training is available and customers have easy to access resources for resolving their issues Customer service and relationship training and development is mandated throughout the entire company. The organization is very customer driven, constantly trying to stay connected to the customer for improving quality and service. Products and services have reputations for quality in the eyes of the customer, leading to customer loyalty.
2.7 Corporate Governance

High quality corporate governance of GP reduces the likelihood of future problems and speeds remediation when problems occur. The management team effectively balance Board of Directors, shareholders, creditors and other stakeholders interests. 2.7.1 Board & Committees The Directors of the Board are appointed by the Shareholders in the Annual General Meeting (AGM) who are accountable to the Shareholders. The Board is responsible for guiding the Company towards the goal set by the Shareholders. The Board also ensures that Grameenphone Policies & Procedures and Codes of Conduct are implemented and
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maintained; and the Company adheres to generally accepted principles for the governance and effective control of Company activities. 2.7.2 Audit Committee The Grameenphone Audit Committee was established in late 2008 as a sub-committee of the Board and has jurisdiction over Grameenphone and its subsidiaries. The audit committee is comprised of three members of the Board including an independent Director. The Chief Executive Officer, the Chief Financial Officer, the Company Secretary and the Head of Internal Audit are permanent invitees to the Audit Committee meetings. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to internal control, financial reporting, risk management, auditing matters and GPs processes of monitoring compliance with applicable legal & regulatory requirements and the Code of Conduct. The Audit Committee Charter as approved by the Board defines the purpose, authority, composition, meetings, duties and responsibilities of the Audit Committee. 2.7.3 Treasury Committee This committee consists of two representatives from shareholders and the CFO of GP. All significant financial matters which concern the Board are discussed in this committee in detail. The issues are ultimately forwarded to the Board for their final review and approval.
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Chapter 03
Analysis and Interpretation of Data
3.1 Postpaid Products of GP

As I mentioned before Grameenphone ltd. supplies two categories of SIM card, Pre-Paid, Post-paid. I am working with Post-Paid subscribers. Post-paid categories are given below:
Postpaid products Xplore Package Business Solution GP Public Phone
Figure 3.1: Post-paid products of GP Xplore Package: Xplore is a postpaid connection and is available with Mobile to Mobile with BTCL connectivity. BTCL incoming is absolutely free in Xplore. ISD facility will be available if your security deposit is BDT 3000 or you have Bank Guarantee from UCB. Business Solution Postpaid: The changing environment of international business is reshaping every business plan and way of work. GP believes that as telecommunication service provider- we are here to help you grow and win. No matter how unique or diverse a business is, GP offers customized solution to win the tough war of business. GP believes every business is unique and one size does not fit all. So they offers customized packages for different level of employees. Besides the largest and finest network coverage our experienced Account Managers are always beside you to assist in your telecom challenges. GP Public Phone: GP Public Phone is the package for PCO entrepreneurs. It offers very cheap call rate and various discounts on usage
3.2 Post-paid subscriber growth over the years

A large number of Post-paid subscribers are generating huge revenue for Grameenphone Ltd. If we see in last few years that how many Post-paid subscribers joined in Grameenphone Ltd. that will give us a brief idea about their growth status: Year Number Subscribers Table 3.1: Number of Postpaid Subscribers Dec-2005 of 383,425 Dec-2006 531,552 Dec-2007 602,838 Dec-2008 416,334 Dec-2009 765,235 Dec-2010 10,54,648
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Number of Postpaid Subscribers

1,200,000 978,463 1,000,000 800,000 602,838 600,000 383,425 400,000 200,000 2005 2006 2007 2008 2009 2010 Number of Postpaid Subscribers 531,552 416,334 765,235
Figure 3.2: Number of Postpaid Subscribers In the chart we can see that from the year 2005 to 2007 number of subscriber have increased continuously but in the year 2008 number of subscriber decreased. This was due to high market growth of Banglalink. That means subscriber of Post-paid customer decreasing. But later GP increased their postpaid subscriber base by introducing new tariff plan for Xplore and proving customized service to Business Solution subscribers.
3.3 Postpaid Average Minutes per User (AMPU)

From 2005 to 2008 if we look Grameenphone Ltd. financial data we can find out average minutes per user. AMPU is calculated in every month in a relevant period. From this calculation we can see that how many average minutes of a postpaid and pre-paid customer use in every month of a relevant period. Data table of AMPU and calculated chart are given below: Year Post-paid Pre-paid 2005 1,173 146 2006 1,050 168 2007 737 225 2008 524 296 2009 616 312 2010 724 378
Table 3.2: Average minute per user per month
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AMPU comparison
1,400
Average minute per user per month
1,200 1,000 800 AMPU Postpaid 600 400 200 2005 2006 2007 2008 2009 2010 AMPU Prepaid
Figure 3.3: AMPU comparison of Pre-paid and Post-paid
3.4 Xplore Package

In this package Grameenphone Ltd. provide credit facility to use air talk time. Through this package subscriber can talk as much as he want. After bill cycle subscriber has to repay the unbilled amount. Xplore is a postpaid connection and is available with Mobile to Mobile with BTCL connectivity. BTCL incoming is absolutely free in Xplore. ISD facility will be available if your security deposit is BDT 3000 or you have Bank Guarantee from UCB.
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In above bar chart we can see that number of AMPU of post-paid subscriber has decreased which is negatively affection of GPs revenue. In 2005 it was very high, later it is decreasing and in 2007 and 2008 decreasing level goes very below. On the other hand Pre-paid subscriber AMPU is increasing year by year. But its growing rate is very slow. In recent years due to huge network campaign GP has increase AMPU both in postpaid and prepaid segment. To exist in a market for long time pre-paid growth is good. For post-paid AMPU is decreasing compared to the data of 5 years back because people have now many options to communicate with people, suppose Short Messaging System (SMS), Voice Messaging System, and E-mail etc.
3.4.1 Features of Xplore No on-net/off net, simple flat and low Tariff 7 F&F Number is applicable (GP to GP) 1 sec pulse is applicable, for FnF 60 sec pulse Post-paid product with BTCL (Local/NWD/ISD connectivity) Free BTCL incoming facility All Value Added Services (EDGE, Welcome Tune, Voice SMS, MCA, Balance Transfer etc.) All Supplementary GSM Features (Call, SMS Barring, Call Conferencing, Forwarding, Call Waiting) International & SMS Roaming facility (Terms and conditions applicable) Existing Xplore bill cycle: 6, 21. New Xplore Bill Cycle: 10, 24 If activation done (within 10 to 23) then bill cycle will be 10, If(within 24 to 9) then bill cycle will be 24 Monthly Line Rent/Access Fee - Zero Default Credit Limit BDT 300 All existing Xplore 1 and Xplore 2 subscribers have been migrated to Xplore Package
On request Itemized bill for the last 30 days 3.4.2 Purchasing procedure To get an individual/private subscription (in the name of a person) the following documents mandatory to comply with BTRCs directives: National Identity Card (NID) and its photocopy (Passport in case of the foreigners) One copy of passport sized photograph Name, Phone number & NID number of an Identifier (this is Optional for diplomats and foreigners) 3.4.3 Credit limit When a customer purchases a Postpaid connection, by default they get Tk 300 as credit limit. If subscribers want to increase his credit limit they can do. They can increase credit limit from Grameenphone Center (GPC) or Subscriber will have to call in Grameenphone hot line number. Subscriber has to pay the amount via flexiload or any other payment system. As per subscribers request a Customer Manager (CM) raises a ticket and pass to
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technical team. It will take 72 hours to increase his or her credit his Bill to SD (Security Deposit). 3.4.4 Security Deposit system Depending on the need, a subscriber can increase his credit limit through increasing security deposit. If any existing subscriber wants to increase his credit limit through helpline with help of CM (Customer Manager), they need to pay the entire unbilled due amount first. When subscriber pays his all due bill their bill status will be Zero. Later they need to recharge through Flexi Load, scratch card or via bank payment system the amount they want to increase as Security Deposit. After that the subscriber has to call Grameenphone Helpline and ask CM to increase Security deposit with recharged amount. It will take 72 hours to adjust his recharge amount from Advance payment to Security Deposit. Subscriber also can increase his Security deposit by deposit money in a recommended bank or in Grameenphone Customer Center. 3.4.5 Bar/Unbar policy The bar unbar system is done automatically. When subscribers due bill crosses credit limit plus security deposit, subscriber connection will be barred instantly. The situation is as bellow:
Tk. 4301
>
Tk. 300
+ Tk. 4000
When subscriber pay bill through Flexi Load it will takes 15 to 20 minutes to adjust payment with Due bill Amount. After that subscribers connection will be unbarred again. 3.4.6 Bill Payment Procedure Xplore Subscriber can easily pay his bill through Flexi Load system. Subscriber can also pay his due bill through online banking system or deposit money in the recommended bank account by Grameenphone Ltd. GPs maximum Subscriber pay unbilled amount through Flexi Load system. Some Xplore customers are paying check in bank or through online payment system. Thats because these customers officially use this connection. Due to maintain documentation for their office they use this system. A data analysis has made up on payment system. I have taken 100 Xplore customers randomly. 40 subscribers were taken from Dhaka and 60 subscribers were taken from suburban areas and followed their last 10 payment system. Whether they use Flexi Load system or pay in bank by check or online banking system.
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Due Bill
>
Credit limit + Credit limit
The data collected from the record of these 1000 payments (100x10) are:
Payment System Number of subscriber
Flexi Load 834
Online banking system 17
Depositing in bank account 149
Table 3.3: Payment system used by Xplore postpaid subscribers
Preferable Payment system

Depositing in bank account 15% Online banking system 2%
Flexi Load 83%
Figure 3.4: Payment system used by Xplore postpaid subscribers
In the presented chart it is showed that majority subscriber 83% feel comfortable to pay through Flexi Load because they use this connection for personal use. Those who pay through online banking system 2% and deposing in bank account 15% are using this connection for official purpose because they have to maintain some formalities through documentation.
3.5 Business Solution

Business Solution is a connection that is totally used for corporate executives. An organization purchases a bundle of SIM for their office executives, So that they can communicate with each other easily and in a cheaper rate. Corporate tariff is different from package and also from Xplore package. Only for a particular organization special tariff rate is given by GP. It is only applicable for internal communication of employee to
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employee. This special rate is depending on organization reputation over the last few years. 3.5.1 Purchasing Procedures To purchase a postpaid connection subscriber have to come to through some formalities. These are: Business License is compulsory to purchase this connection. Need Tk. 499 (as present market price) to purchase Post-paid Business Solution connection. Two copies of Passport size photograph Name, Phone number & NID number of an Identifier (this is Optional for diplomats and foreigners) 3.5.2 Security Deposit system The deposit policy for Business Solution Subscriber is different from Xplore. In Xplore, subscriber can easily deposit his desire amount through Flexi Load system. But Business Solution subscriber can not change his deposit or credit limit as it is predefined in the contract with the respective company If any Business Solution subscriber want change his credit limit, he has to communicate with his companys authorized person. Later the authorized person of the company will communicate with the Grameenphones contact person or Key Accounts Manager. So subscriber can not change his credit limit as easily as Xplore subscribers 3.5.3 Bar/unbar policy The bar/ unbar system is similar as Xplore package. It has been shown that after a particular bill cycle for example 3rd and 8th bill cycle in every month a huge number are temporarily disconnected because of non payment of bill. In this time Grameenphone Ltd losses a huge amount of revenue. There are some Business Solution connections for VIP (Very Important person) and for CIP (Commercially Important Person). This connection only goes for Government high officials and also for different Foreign Ministry. This connection are never barred for local uses and also for IR (International Roaming) 3.5.4 Payment procedure Payment procedure is no longer different from Xplore package. But there is difference in using payment system. Business Solution users are corporate people. They do not pay any bill from their own pocket. Company provides this connection and gives a limit for employees. They use their SIM for limited purpose. The responsibility of paying bill is for company. Company does have to maintain documentation for accounting purpose thats why they pay dues in bank account at a time after a bill cycle.
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Bill cycle of a particular company is same for all. Until paying is updated in the server of Grameenphone, their connections are barred. There are some exception likes some small enterprises are purchasing Business Solution connection due to low tariff for their personal use. Those are pay bill through Flexi Load system. I have taken 100 Business Solution customers randomly and followed their last 10 payment system. Whether they use Flexi Load system or pay in bank by check or online banking system. The data collected from the record of these 1000 payments (100x10) are: Payment System Number of subscriber Flexi Load 271 Online banking system 98 Depositing in bank account 631
Table 3.4: Payment system used by Business Solution postpaid subscribers
Preferable Payment system

Flexi Load 27% Depositing in bank account 63%
Online banking system 10%
Figure 3.5: Payment system used by Business Solution postpaid subscribers
In the above chart we can see that 63% Business Solution Post-paid subscribers are paying their bill in bank account. It is happening because at the end of the month companies paid their all mobile bill in Bank account because of maintaining documentation for their companys purpose and maintain transaction through bank. Some companies pay their bill through online banking system which is 10%. The companies who have agreement with their bank to pay the due bill through online banking are using this system. 27% subscriber of Business Solution Post-paid pays their due amount through Flexi Load system. This little percentage subscribers are mainly from small enterprises or using SIM for personal use. They mostly use their SIMfor personal use and pay their respective company does not bear their mobile bill
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These subscriber pay in bank account outside of Dhaka city, sometimes it takes long time to unbar connection. Because payment update system does not update by its own system so early. Sometimes bank send payment information as a bundle for many subscribers at a time. That will take long time to update in server. Then here agent manually updates the update the bill getting confirmation from bank and/or Key Accounts Manager of that company.
3.6 GP Public Phone

Grameenphone Public Phone (GPPP) has both Post-paid and prepaid connection. This is actually used for business purpose. This package provides very lower tariff. In this package users have to recharge their account first and then they can talk. That means subscriber has to debit his account first later he can use this SIM. This connection user can not use International Roaming system. In this connection they have no chances to get their connections barred because they have to pay their bill in advance. 3.6.1 Features of GP Public Phone Pre-paid & Post-paid product with BTCL (Local/NWD/ISD) connectivity No Friends and Family Options 1 sec pulse is applicable Free BTCL incoming facility No monthly access or commitment fee Bonus Policy: 10% bonus amount on every recharge (Minimum BDT 50 or above), Check: *566*2# If activation done (within 10 to 23) then bill cycle will be 10, If(within 24 to 9) then bill cycle will be 24 Credit limit for Post-paid: Before 28 March : BDT 1000, From 28 March to 1st July: BDT 500, From 1st July : 0 limit Trade License is Mandatory to buy the SIM On request Itemized bill for the last 30 days
All Value Added Services (EDGE, Welcome Tune, Voice SMS, MCA, etc.)
3.7 International Roaming (IR)

International Roaming (IR) is not any product but its a service. People those who have Post-Paid connection and only Xplore and Business Solution Customer can use this service. These subscribers want to active their connection any country in the world, they
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need to use IR service. As a largest telecommunication company, Grameenphone Ltd. provides IR facilities over 357 operators across the 120 countries in the world. 3.7.1 Procedure for taking IR facilities These subscribers do not want to disconnected from telecommunication and often visit outside of the country they can use IR facilities. This connection is appropriate for business people those always communicate with foreign dealing and most often have to visit abroad. To get this connection there have some rules, these are given below: Subscriber must have a Xplore Post-paid or Business Solution Post-paid connection. Passport photocopy of first 7 pages. International debit card or credit card on subscriber own name These subscribers want to permit auto debit facility they have to deposit BTD 10000 and if any subscriber does not want to permit auto debit facility they have to do BDT 20000. Foreign employees working in Bangladesh is using Grameenphone connection and want go outside of Bangladesh they have to deposit BDT 50000. Subscriber can get sms, voice call, edge, mms facilities through IR service. 3.7.2 Payment procedure for IR subscriber
International Roaming subscriber only can pay through International Debit or Credit card in USD currency. If IR subscribers give Auto Debit facility to Grameenphone Ltd, then we charge directly from subscribers Debit or Credit card if the connection is barred. If auto debit facility is not permitted by subscriber, they will be charged from their Deposit account. Deposited amount which is in BDT, Grameenphone has to convert in dollar in the present market price. Subscribers are also charged by present dollar rate in our country. If billed amount is higher than Deposited amount, subscriber connection will be barred until he or representative of the subscribers come to us and pay bill through his Debit or Credit card. Without auto debit facility subscriber need time to pay their due billed. In that time revenue generation is stopped in GPs end. This rule is done as per Bangladesh Bank law. All charges will be done through Debit or Credit card only. 3.7.3 Payment procedure to Roaming Partner When a Grameenphones subscriber goes outside of Bangladesh with IR facility, they have to use Grameenphone Roaming Partner network to connect. For that reason Grameenphone has to pay a service charge and roaming partners tariff. This payment is made in USD. In every month from first calendar date to end of the calendar month,
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Grameenphone pays its roaming partner billed amount in dollar and roaming partner does as well as for Grameenphone if any foreigner use Grameenphone network in Bangladesh.
3.8 Credit risk of Grameenphone for Post-Paid connections

Grameenphone Ltd. is carrying a huge credit risk for Post-paid customers. Grameenphone Ltd. does not take any security money when they sell a Post-paid SIM card. So there is a chance of not getting return after using tariff time. I have found so many SIM connections are disconnected due to non-payment of bill for 6 months to 12 months. In every month Grameenphone prepare a bar list which are not paying bill after crossing credit limit. Grameenphone Ltd. considers a postpaid subscriber as churned if the subscribers account is barred for more than three months. They bar a postpaid subscribers account if the subscribers usage exceeds the subscribers approved credit limit or if the subscriber does not pay an invoice by the payment deadline.
3.9 Post-paid ARPU and Churn Rate relationship

ARPU (Average Revenue per User) is closely related with churn rate. ARPU prepare in every month of a year. If churn rate is increase it will negatively effect on ARPU. I have collected some data from the internal documents of Grameenphone Ltd. where ARPU and churn rate is given.
ARPU
2,719
2,279 0.6%
1,220 2.4%
898 6.6%
954 6.2%
1,072 5.8%
Churn Rate 1.6%
Table 3.5: Relation between ARPU and Churn Rate
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Year
2005
2006
2007
2008
2009
2010
ARPU comparison
Average revenue per user per month
3,000 2,500 2,000 1,500 1,000 500 2005 2006 2007 2008 2009 2010 ARPU Postpaid
Figure 3.6: ARPU comparison
Churn rate comparison

7.00% 6.00% 5.00% Credit Management Policy for Postpaid Subscribers of Grameenphone Ltd.
Churn rate
4.00% 3.00% 2.00% 1.00% 0.00% 2005 2006 2007 2008 2009 2010 Chrurn Rate Postpaid
Figure 3.7: Churn rate comparison
A relation between ARPU and Churn Rate has shown in the above charts. It is showing that in every year churn rate is increasing as well as revenue is decreasing. In the year 2005 ARPU is 2719 where revenue is decreasing. But in 2006 we see a little difference, churn rate is decreased to 0.6% but ARPU did not increase. As because the Average minute per user (AMPU) is decreased in this year which is in the figure 6 thats why ARPU is not increase. Later in 2007 and in 2008 churn rate is increased to 2.4% and 6.6%
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and ARPU is also decrease to BDT 1220 and BDT 898. But in the recent years Grameenphone has revamped the postpaid segment with many churn back offer. In 2009 and 2010 churn rate is decreseasing. On the other hand ARPU from postpaid subscribers is increasing. In the above graph ARPU and Churn Rate are negatively related Churn rate is one of the main risks for Post-paid connection. Many subscribers do not pay due bill for long time. For that reason churn rate is increasing every month.Credit management team did not give me any statistical data because company confidentiality.
3.10 Legal procedure of recovery

If any subscriber does not pay his due bill for 6 month, Grameenphone takes some legal procedure to collect this bill. In the first month management team will observe that subscriber whether he pay or not. In the second month GP will try to contact with subscriber in his second contact number which he provided during purchase of the SIM. If we get customer through second contact we remind him that he did not pay his due bill. If we do not get subscriber through his second contact we will observe him again and send him a legal notice.
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Chapter 04
Findings of the Study
In the analysis part we have seen different datas interpretation. I have found some data from above analysis. These are given below:
Grameenphone Ltd. is handling very high credit risk for Post-paid customers. Grameenphone Ltd. do not take deposit money from subscriber when a subscribers purchase a Postpaid SIM. By default subscribers get Tk 300 credit limit for Xplore package. Grameenphone Ltd. losing revenue from customer during barring time due to crossing the credit limit. Most of the Xplore users feel comfortable to pay through Flexi Load system. Business Solution customers feel comfortable to pay in bank account. Subscriber residing outside of Dhaka, who pay in bank account sometimes fall in trouble because it takes almost 3 working days to unbar the connection In that time subscriber dissatisfaction level increases For roaming subscribers Grameenphone does not permit to voice call facility if their connection gets barred, they can pay through auto debit by contacting with his/her bank. In this barring time Grameenphone Ltd. loses a huge foreign revenue.
Payment of IR bill without auto debit facility sometimes takes long time to pay due bill. Churn rate vary depend on subscribers mentality. Risk is the very important factor in credit business. Grameenphones credit risk is very high in this sector.
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Chapter 05
Recommendations & Conclusion
5.1 Recommendations
Grameenphone Ltd. has many competitors in the present telecommunication market. That is why Grameenphone nothing has to do with default credit limit because the competitors are providing almost same credit limit with same services. When a subscriber connection is barred due to nonpayment of bill, that time revenue generation is stopped. To avoid this problem Grameenphone Ltd. can launch a new system of reserve system. Subscriber can reserve a sufficient amount here and when his connection is barred he can use his reserved amount. There will have to be a reserve limitation. This system will be similar to Security Deposit system but it have to be done through SMS or with the help of Customer Manager agent in helpline. To know subscriber due bill many Post-paid subscribers called in helpline of Grameenphone that is 121. For Post-Paid user helpline was free of cost but now they are charged Tk 0.57 per minute. While I worked in customer service of Grameenphone, I found that every day many subscribers called to know his dues. These calls are make server busy. There should be a dedicated line where postpaid subscribers can get update of their due bills. Grameenphone need to launch a web based billing information system where subscriber can view his due bill, credit limit, previous invoice etc. So it will reduce the call generation in helpline. as there is almost no revenue coming from Post-paid subscriber calling to helpline, so Grameenphone will be able to minimize cost in customer service. Another thing can be done only for reputed Post-paid user. There should a facility where they can recharge through SMS as loan for a short time from Grameenphone. Later when he pays the bill that will be added in his billed paper. Payment system is quite good of Grameenphone Ltd. But payment in bank outside of Dhaka city sometimes takes time to upload. There need to take some special care. Already this system has in Grameenphone Ltd. name is BARGEN software. In this system if any subscriber paid due bill in a bank but still not uploaded, Customer Manager agent can unbar his connection until the bill is uploaded. This facility is for a certain period of time. But there is problem. The access of this system restricted. Only senior employees can have access to this system. I found many query about IR facility which normal post-paid subscribers want to use. For example someone going for tour outside of Bangladesh, they want to enable IR. But they can not able this service due to high call rate. Thats why Grameenphone Ltd. needs to do some negotiations with neighbor or Asian countries that there will be a low call rate. Besides many solvent subscriber could not take IR facility for not having international credit card. Though it is a regulation made by Bangladesh Bank and BTRC, it should be flexible.
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5.2 Conclusion
Grameenphone still has a positive image in the Mobile market. Due to its various innovative products and wide market coverage, strong network, at cheap rate with various service centers and its value added services, it can be considered as the market leader in the telecommunication industry and its competitors are far behind. Post-paid subscribers are the primary subscriber of Grameenphone Ltd. Grameenphone Ltd. providing lots of facility for Post-paid subscriber. But still some problems are occurring due to upgrading some system. In suggestion part some facilities name are mentioned. If Grameenphone Ltd. launch these services, that will be very profitable and revenue generating service. Recovery policies need to be stronger. BTRC (Bangladesh Telecommunication Regulatory Commission) has done a very good job that every subscriber must have to submit a Photo Identity card to purchase a SIM. Risk of Grameenphone for Post-paid number has reduced with help of this proper verification process.
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References
www.grameenphone.com www.btrc.gov.bd Annual report of Grameenphone 2008, 2009, 2010 Telemarketing campaign reports 21st, 22nd, 23rd & 24th week, Contact center, Customer Service, Commercial Division Annual market analysis of Commercial Division of Grameenphone 2005-2010 CRAB credit rating report 2010 Modern Working Capital Management, Frederick C. Scherr Corporate Finance, 9th ed, Ross, Westerfield, Jaffe
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Credit Management Policy

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Credit Management Policy for Postpaid Subscribers of Grameenphone Ltd.

Introduction & Background of the Study

Introduction to the Report Rationale of the study

Statement of the problem

Methodology of the study