Project Report on Marketing of Wateen Telecom

Executive Summary
Direct-to-Home (DTH) TV service has been one of the strongest growth drivers of the
satellite industry in the developed parts of the globe. DTH is expected to continue to be a
reliable revenue generator for the future.
The rapidly changing technology market in Pakistan, as consumers became more aware
and technically savvy over the last few years, offering immense potential for new
technological products and services. Wateen realize this potential and follow the natural
new product development process.
Socio economic, legal and political forces and their bearing on the market dynamics were
examined and it was ascertained that the market conditions are volatile and uncertain.
Consumers were found to be more aware and more demanding and although the per
capita income showed and upward trend; yet they were found to be price sensitive as well
TV is the biggest source of entertainment for the Pakistani population. The market size
analysis shows that the estimated numbers of TV sets are 10 million in year 2008.
The market can be segmented into three clusters based on their SEC class (Socio-
economic class). These were declared as SEC AB, SEC BC and SEC CD clusters.
SEC AB preferred value for money i.e. price and quality, where all value was attributed
to the picture quality factor. SEC CD liked customer service, maximum number of
channels and variety of channels offered. SEC BC preferred all of the six attributes and
made little differentiation among them.
　
Current Situation: Internal
The product
Direct to home (DTH) Television uses a single satellite that sends signals directly to your
personal Mini-dish. All channels are bounced off this satellite, and brought directly to
your TV set via the Dish. It offers you better picture quality as the picture is completely
retained in digital format.
Besides elevating you to a new technology Direct to home offers you an option of
complete freedom from the friendly neighborhood cable guy. Going the Direct to Home
way has innumerable other advantages that change the way you watch television forever:
· Superior Picture quality, just like watching a DVD
o Stereophonic Sound
o Capacity up to 400 Channels
o Video on Demand
o Geographic Mobility
o Uninterrupted Viewing
o Video Games
o Exclusive International Channels
o Parental Lock Facility
o Electronic Programme Guide
　
The company
Wateen Telecom is the Abu Dhabi Group's latest venture in Pakistan. After the successful
launch of Warid Telecom in Pakistan, which has a subscriber base of over 10 million
customers in 145 cities, Wateen Telecom has been set up to become the leading "Carrier's
Carrier" providing services based on quality, reliability and affordability in the
communication and media sector.
Vision
To launch Pakistan into the 21st century digital revolution by providing complete
communication solutions to Telecom Operators, Corporate, Consumers and to be the
leading “Carriers’ Carrier” by creating a world-class cutting-edge network to deliver a
broad range of reliable, affordable and quality customer-centric services.
Mission
· To provide affordable communication services that meets and exceeds customers'
requirements.
· To deliver high-quality, flexible and innovative solutions that is cost effective and
conducive.
· To provide complete customer satisfaction on time, every time.
Company
Wateen Telecom is Pakistan’s one of the largest communication company in the private
sector that has helped moving forward the country into a digital revolution with its ability
to seamlessly connect and enable smarter, faster, cost-effective and flexible
communication solutions to reach its customers.
Wateen offers a complete range of carrier class telecom and multimedia services like
wireless and fixed line telephony, broadband for data, internet and TV/multimedia along
with a host of other value-added services and applications like, DTH, Long-haul, Metro
Rings, HFC, VSAT, WiMAX etc., to set the standards for a new era of communications
and entertainment in Pakistan.
Situation Analysis (SWOT)
Strengths
· Related Business: Wateen Telecom is already into telecom business and has developed
managerial and technical capabilities.
· Geographic presence: The Company is geographically present in wide areas. It has
already a diverse customer base in various areas. There is no such competitor who has
such a wide ranging presence in the country. .
· Innovation: The DTH is an innovative addition to the service as far as Pakistani market
is concerned. It is in line with the policy of the company to tap the markets where
consumers’ needs are not being addressed.
· Brand equity: The Company has an established brand name..
· Extensive distribution channels: Wateen has extensive distribution channels for the
distribution of its new service.
· Market oriented: Company’s comparative advantage lies in already accumulated
knowledge, experience and data in the field.
· Financial muscle: Wateen has sufficient resources to invest in the new project.
Weaknesses
· Unpredictable market: Pakistani market is very unstable.
· Unskilled workforce: Specialized training is required for workforce and management to
cope with new challenges emerging from the introduction of the new service.
· No existing alliances: The company is making alliances with certain new suppliers for
the equipment etc. which, at present it does not have.
· Low initial returns: return on investment are initially low..
· Cannibalization: The Company has also launched cable service for some areas. Due to
launch of DTH these services are cannibalize each other.
· High turnover rates: The Company has not been able to retain good employees for long
term. It would also hamper the ability of the company to handle the launch of new service
successfully if the turnover rate does not come down.
Opportunities
· General flaws of existing services: people are not satisfied with the existing service of
cable because of various reasons including interruptions, poor picture quality, a lot of
advertisement, poor customer service etc. They have responded enthusiastically towards
the DTH service.
· Remote access: The biggest opportunity in Pakistani market is that there are certain
areas where the services of competitors (cable operators) can not reach due to the
topography of the terrain. In those areas there are sufficient people who need the services
the company plans to offer. So, there are sufficient unmet needs in the market which can
be catered through the service.
· Inflexible existing services: In some areas the existing cable providers are not offering
sufficient channels to satisfy the customer. The DTH service is promising as it would
provide exactly what customer needs.
· Growth in the market: The market for entertainment is growing with the growth of
middle income segment in Pakistan. These customers are increasingly demanding better
services as far as entertainment is concerned.
Threats
· Legislative environment: The independence of media is under scrutiny from the
government. It is difficult to predict if there might be any legislation regarding DTH
which could hamper the full advantages of the service. PEMRA might impose bans on
channels as it did to cable. So, negative legislative developments remain a threat to the
success of the service.
· Downturn in economy: The down turn in Pakistani economy might have impact on
disposable income of the population which might not be inclined to spend much on the
entertainment activities. General well being of economy always has favorable impact on
all the businesses and the DTH service would not be an exception.
· Little potential differentiation: It is expected that other competitors would enter the
market. It might start price war between Wateen Telecom and potential competitors. In
that case there would be very less differentiation Wateen would be able to offer given the
nature of the service.
· Increased bargaining power of suppliers: The company would need vital alliances with
suppliers and other partners. They might be suppliers of the competitors. Suppliers’
bargaining power might increase in that case making input costs high and leaving the
company in difficult position.
· Uncertain demand: It is very difficult to estimate the exact demand for the service. There
might be variation which could result in losses for the company.
· Employee retention: The company might lose its key personnel to other competitors
once they enter the market for DTH. So, retention of good staff would remain a challenge
and losing it would always present a threat.
· Short product life cycle: The Company would have to continually innovate given the
nature of the industry. Fast pace of technological developments might render the service
obsolete in few years and it might be replaced by more advanced technology.
Critical Success Factors in the Industry
· Effective distribution: Wide geographic presence is a critical factor in case of the kind of
DTH service.
· High quality in product and services: The quality of service which includes reliability,
picture quality etc. is very important to the customers.
· Supplier Management: Relations with suppliers—both of equipment and channels—
would play a critical role in success of this kind of service. It enables the service
providers to ensure the reliability. Good relations result in low input costs which could be
passed to the customers.
· Innovation: It is very important to stay ahead of competition in this kind of industry
which is driven by technology. So, the company cannot be complacent and would have to
focus on constant innovation.
· Trained Human Resource: Internal capabilities including the experienced and trained
personnel would be a key success factor in this kind of business.
· Customer intimacy: Knowledge about the culture and habits of the customers is very
important. The company would have to remain in touch with the changing needs of the
customers.
　
Coverage:
Wateen is currently providing mainly outdoor and limited coverage in the following
cities:
· Abbottabad
· Jhelum
· R.Y. Khan
· Bahawalpur
· Karachi
· Sahiwal
· D.I. Khan
· Lahore
· Sargodha
· Faisalabad
· Multan
· Sheikhupura
· Gujranwala
· Okara
· Sialkot
· Gujrat
· Peshawar
· Sukhur
· Hyderabad
· Quetta
· Islamabad
· Rawalpindi
　
　
Current Situation: Macro Environment
The macro environment has been discussed under the following:-
Political
The last one decade has seen witnessed more concentrated form of political turmoil and
instability than ever before witnessed. Part of the reason is access to information and the
media boom of the 90s and early part of this millennium. But that is just one reason, the
major reason being that political forces used media and information channels to shape
political debates and provide a frame of reference under which the discussions was
carried out. Media on the other hand also used it substantial power to influence those
shaping the political landscape of the globe. Control over information has become a
critical success factor in the political arena today and while stakes are high, the battle is
immense. Governments and the opposition both have identified the importance of
channels of mass communication and have invested heavily to propagate their
perspectives. Looking at the macro environment from the national and regional level
perspective, the last couple of years have seen a lot of turbulence in the political arena.
This as a result has translated into different measures from the government from setting
curbs on the media, imposing watchdogs like PEMRA, to declaring freedom of press and
the right to freedom of expression.
Legal
Under the 1973 Constitution, Fundamental Rights include security of person, safeguards
as to arrest and detention, prohibition of slavery and forced labor, freedom of movement,
freedom of association, freedom of speech, freedom to profess religion and safeguards to
religious institutions, non-discrimination in respect of access to public places and in
service, preservation of language, script and culture. The judiciary enjoys full supremacy
over the other organs of the state.
When discussing the impact of legal structures and regulatory bodies on the mass
communication channels; we can observe a spectrum where on one hand the government
gave complete freedom to press and allowed complete freedom of speech; while on the
other hand the government curtailed basic civic rights, imposed restrictions on free
speech and banned certain news channels. These controls were exercised through various
instruments like regulations of PEMRA, national security clauses in the constitution, and
imposition of emergency.
Private television networks flourished after General Musharraf seized power in a military
coup in 1999, the president publicly encouraging a free press. But media reports have
been highly critical of General Musharraf after he tried to remove the country's chief
justice in March. When President Pervez Musharraf suspended Pakistan's constitution
early in November 2007, he also clamped down on independent news reporting. General
Musharraf says the new regulations are meant to encourage what he calls "responsible
journalism". The government shut down TV stations, stopped foreign cable newscasts and
imposed a new law governing the content of news reports. Those found guilty could go
to prison for up to three years, pay heavy fines and find their broadcasting licenses
suspended. The government also stopped cable operators from broadcasting both local
and international news channels in Pakistan and even stopped imports of satellite
receivers. Media owners say the government requires them to sign a "code of conduct"
before returning to air. A new law makes it illegal to report critically about the
government policies, discuss Supreme Court cases challenging Musharraf's re-election as
president, and broadcast live coverage of anti-government protests. The law outlaws
content judged to be defamation of the president and other key government officials.
These regulations acted as stimuli and it affected the industry in various ways, negative as
well as positive. We shall see in the subsequent paragraphs that the government curbs
actually acted as stimulus to create demand for different channels of distribution. As the
government regulated the transmission and broadcasts via these regulatory bodies, the
media and the masses went looking for alternative means to transmit and receive
information.
Economic
With a per capita GDP of about $2600 in 2006, the World Bank considers Pakistan a
developing country. No more than 48.7% of adults are literate, and life expectancy is
about 63 years. The population, currently about 165 million, is growing at 2.09%
annually. The Gross Domestic Product in the country was $106.3 billion (est. in 2007)
with an annual growth rate of 6.4 percent in the same year. The following graph shows
the annual average growth rate of the GDP in the economy.
　
　
　
　
　
Source: http://www.indexmundi.com/pakistan/gdp_real_growth_rate.html
However post elections scenario does not support the figures shown by the previous
government. Economic experts say that these numbers were cooked up; most of the
foreign direct investment shown was actually US aid coming in the form of military
support for war against terror. The Shaukat Aziz government also received support from
world bodies like the World Bank and International monetary fund.
After September 11, 2001, and Pakistan's proclaimed commitment to fighting terror,
many international sanctions, particularly those imposed by the United States, were lifted.
Pakistan's economic prospects began to increase significantly due to unprecedented
inflows of foreign assistance at the end of 2001. Foreign exchange reserves and exports
grew to record levels after a sharp decline. The International Monetary Fund lauded
Pakistan for its commitment in meeting lender requirements for a $1.3 billion IMF
Poverty Reduction and Growth Facility loan, which it completed in 2004, forgoing the
final permitted tranche. U.S. assistance has played a key role in moving Pakistan's
economy from the brink of collapse to setting record high levels of foreign reserves and
exports, dramatically lowering levels of solid debt. A major part of the $3 billion five-
year U.S. assistance package to address Pakistan's long-term needs in the health and
education sectors. Also, despite the earthquake in 2005, GDP growth remained strong at
6.6% in fiscal year 2005/2006. In 2002, the United States led Paris Club efforts to
reschedule Pakistan's debt on generous terms, and in April 2003 the United States
reduced Pakistan's bilateral official debt by $1 billion. In 2004, approximately $500
million more in bilateral debt was granted. Consumer price inflation eased slightly to an
average of 8% in 2005/2006 from 9.3% in 2004/2005. Low levels of spending in the
social services and high population growth have contributed to persistent poverty and
unequal income distribution. Pakistan's extreme poverty and underdevelopment are key
concerns, especially in rural areas.
Consumer Expenditure by Purpose: 1990-2015
PKR million 　 　 　 　 　 　
　 1990 1995 2000 2005 2010 2015
　 　 　 　 　 　 　
Leisure and recreation 4,204 10,554 19,613 32,455 38,575 44,417
Social
The socio cultural environment of Pakistan has seen some major shifts in the recent past
as Pakistan became part of the Global Village due not only to the technological
advancements, but also due to opening up of the economy. As we became part of a global
village, there was more access to information about other cultures, religions and customs.
There were imprints of this openness as our society adopted some of these while rejecting
others. Celebration of events like Basant, Halloween, and Valentine’s Day were
considered part of an alien culture but now these events have made their way into our
culture as well and these are celebrated by the young with zeal and fervor. This can be
attributed to not only the media influx but also awareness, understanding of rights and
political freedom. Over the past few years, there has been this immense drive to break
free, to express individuality, and to create a sense of harmony and peace with other
cultures and religions. The people are now more open to watching foreign channels than
before. TV viewing has increased manifold with the advent of dish antenna and cable TV.
Over the last few years, the Pakistani society at large has become more open to change,
more understanding and has developed more capacity to accept and absorb cultural
differences. It did not come as a surprise when at one of the places it was announced to
celebrate Holi, the Hindu festival.
Demographics
Pakistan’s population has been growing at a decelerating pace, from 3% in 1981 to 2% in
2004. It took almost 23 years for population growth to decline by just over one percentage
point. Decline in the mortality rate owing to the elimination of epidemic diseases,
improvements in health facilities, and a modest decline in the fertility rate resulted in
negligible decline in population growth. About 50% of the total population falls in the age
bracket of 0-19 years. In absolute terms, about 83 million people, equal to the total
population of Germany, in Pakistan are below the age of 19 years. However, the decline
in population growth and death rates indicate the future changes in demographics of the
population. The proportion of the 0-19 age brackets will continue to decline, while the 20-
39 age brackets will continue to increase. It is expected that 30% of the population will be
in the age group of 20-39 by 2015.
Population by Age: 1990-2015
'000
1990 1995 2000 2005 2010 2015
0-4 yrs 18,659 20,548 22,081 24,228 26,484 28,180
5-9 yrs 15,173 17,747 19,726 21,305 23,508 25,853
10-14 yrs 12,549 14,979 17,581 19,555 21,146 23,374
15-19 yrs 10,654 12,316 14,850 17,402 19,376 21,024
20-24 yrs 9,337 10,207 12,126 14,537 17,078 19,177
25-29 yrs 8,316 8,799 9,996 11,761 14,156 16,846
30-34 yrs 7,251 7,837 8,602 9,672 11,425 13,944
35-39 yrs 6,075 6,868 7,657 8,333 9,397 11,240
40-44 yrs 4,834 5,765 6,690 7,418 8,094 9,222
45-49 yrs 4,098 4,571 5,578 6,455 7,181 7,903
50-54 yrs 3,536 3,837 4,361 5,320 6,184 6,936
55-59 yrs 2,923 3,241 3,576 4,070 4,996 5,859
60-64 yrs 2,352 2,579 2,907 3,220 3,692 4,580
65-69 yrs 1,589 1,954 2,179 2,474 2,770 3,216
70-74 yrs 1,040 1,204 1,514 1,706 1,965 2,235
75-79 yrs 600 690 821 1,048 1,203 1,416
80+ yrs 402 473 591 729 940 1,155
TOTAL 109,386 123,615 140,835 159,232 179,595 202,158
Median age of
population (Years) 18.84 18.36 18.62 19.12 19.81 20.66
Death rates (per '000
inhabitants) 7.90 7.33 6.74 6.37 5.78 5.26
A substantial number of households run their own businesses or are self–employed. The
major businesses are import/export, manufacturing, and retail. The nature of business also
varies by region. Sialkot is the major centre for leather products, sports goods, and
surgical instruments, which are exported all around the world. Faisalabad is home to the
textile sector, whilst the major hubs of the financial and industrial activity are Lahore and
Karachi. People in rural areas are mostly connected to agriculture. Recognizing the
growth of the middle class, several multinationals have expanded the scope of their
businesses in Pakistan. Services have also witnessed an enormous growth, offering
attractive jobs and careers. IT is another sector that has raised the bar with respect to pay
scales, especially in the metropolitan areas.
Education
Majority of the population with primary or no education live in the rural areas of
Pakistan. Ideas regarding the importance of education are changing, aided by government
programs to promote education. There has been an increase in the number of people
attaining a level of education. Currently, the literacy rate is 54% in Pakistan. The
government plans to improve it to at least 65% in the coming years. The main target is the
rural areas where lack of educational infrastructure and awareness are the main
constraints.
Population by Educational Attainment: 1990/1995/2000-2003
1990 1995 2000 2001 2002 2003
Primary & no education 52,609 54,837 62,331 64,099 65,869 67,656
Secondary 8,821 13,604 16,686 17,215 17,747 18,287
Higher 1,575 1,901 2,429 2,610 2,799 2,994
Consumer durables – a necessity rather than status symbol
The increase in incomes of the middle and upper-middle class, led by the growth of the
industrial and the services sectors, has had a significant effect on consumer lifestyles.
With fewer individuals in a household, and the increasing number of women in the
workforce, consumers have limited time at their disposal. There is, therefore, an increased
reliance on consumer durables by the average household. This means that demand for
appliances has increased noticeably. Items such as microwave ovens tumble driers, and
CD players, which were considered to be luxuries, have now become regular items in the
urban household. However, appliances such as dishwashers and vacuum cleaners are not
so common. The reason for this is that cheap domestic help is available. Dishwashing and
house cleaning is usually done by maids and cleaners in the urban areas. The usage of
mobile phones has also increased dramatically. In fact, the demand for mobile phones
grew by more than 10 times over the 2-year period ending in 2003. Similarly, cable
television gained immense popularity in the urban areas, leading to a greater demand for
color televisions.
Pakistani consumers – becoming more quality conscious
Pakistanis, in general, are becoming more quality conscious. They are fully aware of the
leading brands in consumer appliances, and now demand after sales service and warranty
for products purchased. This is evident by the number of branded American, Italian, and
German products that are readily available. It reflects changes in the buying behavior of
the customer, and an increased sophistication level of consumers. Pakistanis seem more
ready to adapt to new technologies that provide comfort and convenience. The advent of
Chinese products is an important development, leading to a general reduction in prices,
and hence increased affordability for consumers, which has further enhanced the trend for
the increasing demand for durables, especially amongst the lower income consumers, as
they are more price sensitive than other segments of the population.
Technological
Probably the most profound affect has been made by the technological advancements.
Flow of information has never been so swift and uninterrupted. Advancements in the
fields of telecom, satellite communication, and information technology have been the
driving forces behind this phenomenon. In satellite TV communication the latest
technology in Pakistan is cable TV. Cable TV growth has witnessed mushroomed growth
over the last few years and now almost 38% urban households have access to cable TV.
TV is the biggest source of entertainment for the Pakistani population, as cinemas are a
flop in Pakistan. The prevalent hobby of Pakistanis is watching TV. Viewer numbers run
high for soap operas and movies, which some people follow religiously. Indian channels
are very popular among Pakistanis, especially Star plus. However, some Pakistani
channels, such as Geo TV, ARY Digital, and Indus TV are also popular amongst the
public.
Number of color TV Set: 1990/1995/2000-2003
per 100 households
1990 1995 2000 2001 2002 2003
Color TV set 22.06 28.06 33.59 34.76 35.95 37.09
Cable and Satellite Television
Since the introduction of cable TV in 2000, the Pakistan Media Regulatory Authority
(PEMRA) - the regulatory body in Pakistan - has issued broadcasting rights to 49 TV
channels. However, the unofficial number of channels can go up to 100, depending on the
local cable TV service provider. An average cable connection takes a monthly bill of
PKR 250 to view an array of ‘free’ and pay channels. Satellite channel subscription lost
its popularity with the arrival of cable TV in the major cities. However, it is still used
extensively in distant areas where cable TV is not available. However, there was a 51%
increase in the penetration of cable TV between 2000 and 2003, as compared to a 27%
growth for satellite TV for the same period. These figures support the popularity of cable
TV, but its wide usage is dependent on the availability of a proper infrastructure. With the
development of this infrastructure, penetration levels of cable TV could potentially
increase by 135% between 2005 and 2010.
　
Current Situation: Market Analysis
Market definition
In order to define the market in Pakistan, we need to understand what needs are DTH to
serve?
Need: At present, DTH is serving the entertainment and information need of customers
related to TV. In future, for further growth and with the application of new technologies,
it could also serve this same need of PC users and owners of hand held digital devices.
Thus, the market is currently defined as comprising of TV set owners of Pakistan.
Market size
Proliferation of Televisions
The opening of new channels and cable systems has fanned a buying passion among
consumers. Sales of black and white TV sets have faded out, as locally assembled cheap
color TV sets (around PKR 7,000 for a 21-inch television) are readily available. Sales of
Color TV sets grew rapidly with a 68% increase between 1990 and 2003. Consumers
purchased over 850,000 locally assembled TV sets in June-July 2003-2004 as compared
to 764,000 sets in the previous fiscal year, benefiting from cheap consumer financing and
the explosion of entertainment and news channels. Besides consumer financing, declining
prices of TV sets during the last two years in view of stiff competition have also lured
a sizeable number of buyers. Despite falling prices, however, there is a segment in
Pakistani society that cannot afford TVs at normal rates. For such consumers, cheap
reassembled color TV sets are available.
TV is the biggest source of entertainment for the Pakistani population, as cinemas are
becoming less popular in Pakistan. The prevalent hobby of Pakistanis is watching TV.
For the estimation of the TV sets, Federal Bureau of Statistics was consulted. Data from
FBS has been used to find out the historical growth rate (optimistic and pessimistic) as
well as forecast the market size in the year 2008.
The above analysis shows that the estimated numbers of TV sets are 10 million in year
2008, and this will grow optimistically at the rate of 14% and pessimistically at the rate of
7%.　
Market segmentation
After careful analysis of all of the clusters, it has been revealed that all of the consumers
are same based on all of the demographic variables as far as the TV channel providers are
concerned, except for the Socio-economic classes of them. Hence all of the following
three clusters have been differentiated only on the basis of their corresponding SEC class.
Demographic profiling of clusters
SEC CD prefers customer services, max channel and availability of variety of channels.
SEC AB prefers price and quality. This shows that they are more concerned of the value
for money, rather than the variety of channels or company related aspects of trust and
service.
SEC BC prefers each and every attribute and this is a largest of all clusters. This shows
that they have a mixed feeling about the offerings of current service providers and they
want best of all of the bargains.
Competition and Market Share
Cable and Satellite Television
Since the introduction of cable TV in 2000, the Pakistan Media Regulatory Authority
(PEMRA) - the regulatory body in Pakistan - has issued broadcasting rights to 49 TV
channels. However, the unofficial number of channels can go up to 100, depending on the
local cable TV service provider. An average cable connection takes a monthly bill of
PKR 250 to view an array of ‘free’ and pay channels.
Satellite channel subscription lost its popularity with the arrival of cable TV in the major
cities. However, it is still used extensively in distant areas where cable TV is not
available. About 7% of TV set owners has satellite dishes, which means that given the
number of TV sets i.e. 8 million, satellite TV subscribers are 560,000 in year 2006.

　
Competitor’s Strengths and Weaknesses
Cable TV: Strength
· Availability of variety of channels
· Extensive distribution networks, specially in urban areas
· Economical pricing
· Admirable billing mechanism
· Social network
· Easily available
Cable TV: Weakness
· Poor or inadequate quality of channels
· Frequent interruption in transmission
· Inadequate coverage in remote areas
Satellite TV: Strength
· Access to remote areas
· Easily available
· Good picture quality
Satellite TV: Weakness
· Costly services, for each channel, customers need to buy decoders and pay periodically
· Non-availability of decoders
Terrestrial and antennas: Strength
· Very cheap
· Easily available
· Convenient billing mechanism
Terrestrial and antennas: Weakness
· Poor picture quality
· Fewer numbers of channels
　

Market trends
Market trends in term of demographics, economics, social, technology, environment and
politics have already been mentioned. Some other aspects of market trends are briefly
discussed as follows.
Due to limited sources of entertainment, television is probably the biggest source of
entertainment for Pakistanis. A growing number of private TV channels and cable TV,
providing access to more than 100 channels, has kept consumers watching. Indian and
Pakistani soap operas are the most watched programs. People usually prefer to relax in
their leisure time by watching television with their families.
Watching movies is an alternative to cable TV. Indian and English movies are preferred
over low-budget Pakistani movies. Nowadays, VCRs are becoming obsolete, while DVD
players and large plasma screens are in fashion, adding to the craze for watching movies.
Evening is the prime time, that’s when people get back from their work and switch on the
TV to relax. The prime time for TV is from 8pm till midnight. Board and card games,
once a major source of home entertainment, have been replaced by computers. Now
youngsters prefer to play games on their computer or Sony PlayStation, or perhaps play
chess or pool online with other online gamers. Internet chatting is also quite popular
amongst youngsters, and is an activity carried out in the evening and at late night.
Listening to music is a growing hobby amongst the young generation. New pop bands
have flared up the passion for music. Conversely, the habit of reading is not so popular.
Fashion magazines are preferred over novels and digests.
The once tightly regulated Pakistani media has succeeded in opening its wings, as new
channels have emerged on the scene. Before 1999, only one Pakistani channel, PTV -
Pakistan’s national TV channel - represented the whole nation. PTV was criticized for
being biased towards the government. The new developments are welcome, especially in
a country where the majority of the population is not in the habit of reading. Thus, far
more Pakistanis watch TV rather than read newspapers. Statistics and data from various
sources confirm this trend. According to figures, in 2003 one in 66 people had a
television set, and one in 13 people had a radio, while just 16 per 1,000 people read
newspapers. Furthermore, with a literacy rate of barely 40% and an urban-rural ratio of
31.5% to 68.5%, it is evident that the electronic media has an immense role to play, and
will continue to sway public opinion in Pakistan for a long time to come.
Internet
Through research on internet, we found out following information:
· There are about 970 registered cable operators in Pakistan
· There are about 4.2 million subscribers, amounting to more than 25 million viewers in
Pakistan.
Case Analysis of Tata Sky
Tata Sky launched DTH services on 8th August, 2006. Tata sky has focused on southern
areas of India. Data related to Tata Sky and the challenges experienced in establishing its
customer base are as follows:
· After launch of service, Tata Sky was adding a little over 500 subscribers per day across
1,000 towns. The low subscription figure in the first month of launch is being attributed
to higher installation cost and low-awareness level.
· Sales and distribution challenges along the length and breadth of country.
· Massive logistical challenges for installation of equipment and placement of skilled
labor in all potential areas.
· Government regulations, restrictions and imposition of 10% share of revenue beside
corporate taxes.
· Tata Sky used exhibitions, fairs, and events to demonstrate their service actively.
· Advertisement through recommendations from friends or neighbors and marketing
through word-of-mouth.
· One of the challenges is actually managing this whole constraint of capacity effectively
in terms of selection of channels and managing their costs
Case Analysis of Dish TV
Dish TV is India’s first direct to home entertainment service in India, launched in 2003.
The salient findings about Dish TV are as below.
· Gross subscriber base stands at 2.7 million as on December 31, 2007
· Average subscriber addition of 99,000 per month
· Market leader with 64% share of pay DTH market
· More content - With 180 channels, Dish TV has the widest offering by Tata Sky DTH
service provider.
· Distribution strengthened – Dish TV is now present in over 4,400 towns through 38,000
dealers and over 575 Distributors
· Company focus is on increase in ARPU; value added services, commercial sales (e.g.
hotels, restaurants, pubs, clubs, malls etc), brand building and penetration, service
capability ramp up resulting in value creation for the stakeholders.
· Till now, Dish TV is going in loss. The revenues of Dish TV on 31st December 2007 were Indian Rs.
1,120.65 million whereas the expenditures were Indian Rs. 1,762.26 million, thus operating loss of Indian Rs. 641.41 million.

One important question regarding the market which Dish TV is targeting remains to be
answered, as far as the urban and rural areas are concerned. It has been found that they
are following non-urban (rural), small cities penetration strategy. Surprisingly, they have
opted for rural market not based on market research but due to the fact that they wanted to
avoid cannibalization of their own cable distribution services. Dish TV is launched by
Essel group, the parent company of Zee networks and they were already involved in the
business of cable service provision. This pertinent argument leads us to the problem that
Dish TV was facing in its growth phase. They are still going into financial losses, and this
is because of the two major reasons. One, as discussed above, they have not targeted
urban areas to avoid cannibalization and thus losing on potential sales, and the other
reason is that they offered setup-boxes at 4000 Rs. and subscription fees of 100 Rs per
month, in order to be competitive with the rivals. But because of the relatively huge setup
box prices, fewer than expected consumers switch for the systems leading to low
penetration. Subsequently the lower volume and the low price, failed to generate enough
revenues to cover their expenses. Other reasons for the failure of Dish TV at that time
includes but not limited to are that their product and services were not good, in terms of
large boot time of box, offering only zee channels, considerable service charges and
failed operations in rainy and cloudy days.
Because of increased competition and realizing the shortcomings Dish TV made some
major changes in its strategy. They increased their marketing budget to increase
awareness, appointing Shahrukh Khan as their brand ambassador. They are giving
free set top boxes in order to increase market share hence positive cash flow from
operating activities have been realized in year 2007.
Positioning strategy

To: TV set owners of Pakistan

For: Wateen DTH is a satellite television service brand.

Differentiation: it provides you superior picture quality, control and freedom from cable guy.

Marketing Strategy – Product

Product Mix

Three types of packages with value added features like parental control and programs in regional languages enables Wateen Telecom to capture a large

market share. There are three segments in market, based on different SECs. Different products are targeted to each segment. The product details are as

below:

Basic Package:
This package is targeted to segment “SEC CD”, with basic features of DTH, and with either 100 channels. It is because segment SEC CD is price sensitive

and prefers price over variety and quality of channels.

Premium Package:

This package is targeted to segment “SEC BC”, with basic features of DTH plus internet facility, and with 120 channels. It is because segment SEC BC

demands variety and quality of channels, but also it does not want to pay a higher price for the service. Therefore, a package with more number of channels

than basic package, which fits into their buying capacity, is suggested for segment SEC BC.

Premium plus Package:

This package is targeted to “SEC AB”, with basic features of DTH plus internet facility, and with 150 channels. This segment is not price conscious and

demands better service, quality and more number of channels.

Marketing Strategy – Price

Pricing Objectives

Though Wateen has no direct competitor in DTH field, however, market is predominantly captured by cable TV service providers. Therefore, Wateen is

pricing its products so that people would shift from their existing service provider to Wateen’s DTH. Another objective of Wateen is to increase

penetration and trial rate of DTH among potential customers. Wateen is following price discrimination strategy to siphon as much customers as possible

while ensuring profitability. Wateen is careful to keep its image as “affordable” for larger segment of customers (which is SEC CD) in order to increase its

penetration, else customers will compare the prices of DTH packages with their existing cable TV service and in case if Wateen’s prices would be

perceived too high, customers would probably not shift to DTH.Marketing Strategy – Promotion

Broadly speaking the promotional goals of the company are:

1. To create awareness about DTH

2. To encourage attrition from cable to DTH

The company plans allocate a substantial chunk of its budget for spending on communication through electronic and print media for initially.

. For high success rate of advertisement the selection of channel and timing of the ads are also very important. As almost 68 % of respondents preferred

programs in their local languages and almost 90 % of respondents preferred programs in Urdu, the message can be communicated effectively by utilizing

such preferences. According to our findings, most of the T.V viewing happens between 6 PM to 12 AM. Therefore the advertisements on electronic media

should be aired during this time period. In addition to that the company plans to utilize the substantial subscriber base of Warid as captive audience and

plans to send promotion messages to them, in form of SMS, at least on weekly basis to increase recall and to create brand awareness.

Reema signs as Wateen's Brand Ambassador

Reema, a celebrity with an immense fan following around the world, signs with Wateen as the Brand Ambassador. She was formally introduced to the

media through a press conference

Marketing Strategy – Distribution

Distribution is one of the important decisions to be taken by the company. The company aims for 100% geographical coverage though in phased manner. It

involves delivery of service to end customer, and starts from purchase of equipments, their installation and service. For this our own sales force and trade

partners are very important. For this the company distributes total area of service in to manageable zones for like North, Central and South. The company
plans to open Sales & Customer Service Centers at various major cities and towns in these zones. However, keeping in view of the nature of the service,

new orders as well as customer complaints are managed electronically. For this purpose the website of company is playing a major role. For example if

somebody logs on to website of the company and shows interest in purchasing system of Wateen, he can be asked to fill an information form electronically

proving all necessary information of geographical location of the customer. This information is passed on electronically to the relevant area service centre

or nearest franchisee through MIS of the company to contact and provide necessary service.

References

· Federal Bureau of Statistics, Pakistan

· PEMRA

· Consumer Life Style Reports.

· Economic survey

· http://www.himalmag.com/2002/july/profile_3.htm

· http://www.bluechipmag.com/subarticledet.php?id=184

· http://books.google.com/books?hl=en&lr=&id=lua8BDAwM7sC&oi=fnd&pg=PA236&ots=FUXpcwzXYP&sig=S3TCi-

3pcn85S4lmEPCCtXgfR6U#PRA1-PA10,M1

· http://www.voanews.com/english/archive/2007-11/2007-11-15-voa37.cfm?CFID=239578774&CFTOKEN=51248914

· http://www.economywatch.com/world_economy/pakistan/

· http://www.traveldocumentsystems.com/pk/economy.htm

· www.adb.org/Documents/Reports/pakistan-damage-needs-assessment.pdf

· http://www.buzzvines.com/reema-signs-wateen-s-brand-ambassador-0

· http://greenwhite.org/2007/09/07/wateen-fumbles-with-wimax-launch-campaign/

· http://indexmundi.com/pakistan/economy_profile.html

· Press releases, internet forums.