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2.

9 Organization Structure:
The organogram indicates that the top-level management consists of the MD, the COO and the CFO. The chief operating officer (COO) monitors the direct operations of the company, whereas the chief financial officer (CFO) monitors the financial matters of the direct operations. At the same time, they co-operate each other and report to the managing director (MD). The managing director is the direct supervisor of all the divisions and departments. Currently, there are four divisions and four departments. The chief of the divisions are called the general manager (GM). Conversely, the chief of the departments are called the head of department. Every general manager has an assistant general manager (AGM) and the heads of the departments are on the equivalent rank of the AGMs. Divisions deal with the core activities of the company, whereas the departments deal with the supporting activities. Every division has precise units and there is a head for every unit. Below, a concise description of every unit is specified: 2.9.1 Marketing Division: Marketing division constitutes seven units. A brief description of each unit is given below: Brand and A&P: Brand and A&P denotes to brand and advertising & promotion. This unit deals with the overall brand management and promotion activities of the company. The unit covers both outdoor (billboards, road-overhead etc) media and indoor (print & electronic) media. This unit is also responsible for communicating with the advertising agencies, since AKTEL does not have any in-house agency. A head of the units reports to the AGM of Marketing. Product Development: Product development unit is like the R&D unit of a company, which is responsible for developing new products and services. This unit is closely related to the marketing research unit and together the units come up with new service concepts and ideas. Product development unit is also responsible for monitoring the core services (Pre-Paid and PostPaid). Like other units, this unit also has a head reporting to the AGM.

Potential of SME market for the mobile operators in Bangladesh

Marketing Research and MIS: AKTEL has one unit covering both marketing research and marketing information system (MIS). This unit conducts quarterly research through research firms and in-house interns. The unit is also responsible to keep track on the latest innovations and new offers of other operators. In TMIB, this unit is not a full-fledged unit yet. There is only one full-time employee and three interns working for the unit. SME SME unit right now is composed of five members who are responsible for analyzing the current market situation and about the competitors progress. The SME Team generally reports to the Head of Marketing. Although the SME product not yet launched but the research is going on in full fledge. The SME team also responsible for the PCO (Public Call office) products for the time being. In other way PCO is considered a on of the SME product. International Roaming: International roaming (IR) unit is basically responsible for ISD, international SMS etc services. The core task of this unit is to negotiate with foreign telecommunication companies and to expand the international coverage by making deals with them. There is a head of IR who reports to the AGM. Corporate Sales: Corporate sales unit deals with the sales of products and services to other companies. The unit makes agreements with different companies to be AKTELs corporate clients and only handle the corporate level sales. Direct Sales: Direct sales unit is responsible for the sales of products and services to the mass customers through the customer service centers. AKTEL has eleven customer service centers around the country and these centers sell the services to the customers directly. Dealer Management: Dealer management unit oversees the dealers of the company around the country. AKTEL has four dealers and one agent and they need to be monitored and supervised constantly. The head of this unit reports to the AGM of Marketing.

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2.9.2. Information Technology (IT) Division: IT division constitutes seven units and they closely work together. Billing: The billing unit is responsible for processing and monitoring the billing systems for the PostPaid users. The unit has a manager who reports to the AGM of IT. Value Added Services (VAS): Value added service is a unit that implements the developed concepts and ideas of the marketing division. The unit is responsible for the development of the software, which will be used for the application of the new services developed by the product development unit. Simultaneously, this unit handles the VAS content providers who are the third party to the company. Rating (Post-Paid): This unit is responsible for charging the rates of Post-Paid service. The unit fixes per-minute and pulse rates and also fix the pulse durations. It also changes the rates on demand basis. Pre-Paid: This unit only deals with the Pre-Paid service. It administers the e-fill and scratch card systems. At the same time, it fixes per-minute and pulse rates and fix the pulse durations. Product Configuration: This unit is responsible for designing and developing products and services. It develops the blueprint of the product-design. Billing Operation Team: Billing operation team is responsible for administering the entire billing process and developing required software for collecting bills from Post-Paid users.

Customer Relations Management (CRM):


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This unit supplies required software to the customer care centers and work with these centers side by side. The centers usually inform CRM concerning their necessaries and the unit prepares suitable software for them. 2.9.3. Finance Division: Financial division has eight units dealing with financial matters of the company. Accounts Receivable: This unit keeps track on the accounts receivables of the company while preparing the balance sheet. As TMIB is a large company with thousands of financial transactions everyday, a unit to keep track on the accounts is necessary. Account Payable: This unit keeps track on the accounts payable of the company. Core Account: Core account is an important unit of the finance division dealing with the budget and fixed assets. The annual budget of various departments is prepared under the close observation of this unit. Revenue Assurance: Revenue assurance unit consists of revenue assurance and fraud management. Revenue assurance monitors the transactions and assures full protection of the finances. On the other hand, fraud management protects the fraudulences take place in the daily transactions. Corporate Finance: Corporate finance unit consists of treasury management and L/C. Treasury management deals with the inflow and outflow of the company, whereas L/C (Letter of credits) deals with the L/C opening banks and other foreign banks.

Taxation: Taxation unit takes care of the tax, VAT and tariffs of the company.

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Reporting: The reporting unit reports the entire financial transactions of TMIB to the parent company in Malaysia. Costing: This unit forecasts the costing of different departments and reports them regarding the expected expenditure of any alteration. 2.9.4. Technical Division: The technical division consists of three major units planning, infrastructure and property management. Planning: The planning unit makes plans regarding the technical matters such as the RF, SWITCH etc. They assure the proper placement of technical devices and equipments. Infrastructure: The infrastructure unit selects the locations and builds the base transceiver station (BTS) towers. They are also responsible for the maintenance of the towers. Property Management: The property management unit manages the technical equipments and assets. 2.9.5. Human Resource Department: Human resource department is responsible for the recruitment and training of the employees of the company. They also monitor the performance and handle the promotion and salary related matters. Along with the HR department, there is an Administration. The administration is responsible for supplying furnishings and equipments to all the divisions and departments. They also administer the regulations of the company. 2.9.6. Corporate Strategy Department: The corporate strategy department determines the long-term strategies and the short-term plans. All the corporate level policies come from them and they are also responsible for the implementation.

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2.9.7. Corporate Affairs Department: The corporate affairs department is responsible for maintaining a liaison with other major companies. Through this department, TMIB makes business deals with other corporations and assist each other. 2.9.8. Coordination Department: The coordination department is responsible for the internal and external synchronization. At one hand, they coordinate with outside companies. Along with that, they harmonize among the divisions and departments inside the company.

2.10 SWOT Analysis of AKTEL:


From the SWOT analysis, we will observe the strengths, weaknesses, opportunities and threats of AKTEL (TM International BD Ltd.), which is essential in order to determine the present standpoint of the company. Figure 1: SWOT Analysis

INTERNAL

P O S I T I V E

S O

W T

N E G A T I V E

EXTERNAL

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2.10.1. Strengths: Joint Venture: AKTEL is a brand of TM International (Bangladesh) Ltd. (TMIB), which is a joint venture of A. K. Khan & Co. Limited of Bangladesh and Telekom Malaysia Berhad of Malaysia. A. K. Khan & Co. Ltd. and Telekom Malaysia Berhad comprise 30% and 70% equity capitals respectively in this joint venture. TMIB started its operation in 1997 after receiving the license in 1996 to operate GSM cellular phone services in Bangladesh. This venture has contributed both the companies the advantage of risk diversification. At the same time, Telekom Malaysia Berhad has gained strong local network through A. K. Khan & Co. Ltd., which is a well-established company based in Chittagong. Foreign Knowledge Generation in the Company: The top-level management of TM International (Bangladesh) Ltd., by and large, consists of foreign personalities. Most of the departmental heads are from Malaysia, India, Australia, and Sri-Lanka. Because of this mix and match of local and foreign expertise in the company, there is a blend of knowledge. Moreover, the generation of foreign knowledge in the company has enabled the company to compete internationally. Operation in an Aggressive Market: Currently, there are four major players operating in Bangladeshi market: Grameen Phone (GP), AKTEL, CityCell and Banglalink. All of these companies have foreign alliance and they are highly competitive. To keep pace in this extremely aggressive rivalry, AKTEL has adopted an offensive marketing strategy. Operating in such a market and adopting such strategies have given the company an internal competitiveness, which in turn has allowed TMIB to operate in foreign market with giant foreign competitors. Strong Brand Image: TM International (Bangladesh) Ltd. commenced its journey with the brand AKTEL in 1997 as the 2nd GSM operator in Bangladesh. Since its inception, AKTEL has established itself into a popular name among the community. Being one of the pioneers, AKTEL has a strong brand image in Bangladesh and people recognize the name instantaneously. This recognition has given the company an added advantage, as TMIB is operating in a very competitive market.

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Skilled Human Resource: Because of its attractive incentive packages and strong brand image in the job-market, skilled workforces have grown an interest towards TMIB. This has given the company an extra benefit, as the company can recruit the finest from the pool of employees. Furthermore, TMIB frequently recruits young, enthusiastic, and resourceful employees from reputed academic institutions. It also provide motivation among its employees by offering extra inducements such as: awarding gold medals to best employees of the year, organizing entertainment programs, providing transportation facility etc. These extra services have enhanced employees motivation-level and loyalty. Non-Political Work Environment: The work-environment of TMIB is very friendly and co-operative. The practice of internal politics is completely absent and there is an orderly co-ordination among the departments. As most of the employees belong to the same age group, there is a harmonization in the organization. Collaboration with Diverse Companies: TMIB has alliance with diverse companies to support its service offerings. For an example, recently, the company has launched a club-membership facility for its post-paid subscribers, named Club Magnate. To offer this club-membership, TMIB has collaborated with different companies such as Agora, Malaysia Airlines, Hotel Seagull etc. In a similar manner, TMIB has partnerships with Cineplex, BDJobs, Deshimobile, Fantasy Kingdom etc. These collaborations have contributed the company in cost-efficiency and superior service-offerings. Collaboration with Financial Institutions: Apart from having collaboration with diverse companies, TMIB also has collaboration with a number of financial institutions. For example, TMIB has affiliations with HSBC and Standard Chartered Bank for billing and salary purposes. It also has collaboration with EBL and other banks. Because of maintaining an excellent relationship with these financial institutions, TMIB will get the privilege while taking loans or any type of financial services from these institutions.

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Unique Service Offers: TMIB has a well-known reputation of being The First Ever in the country. It has always tried to bring something new and exceptional in the market. There are countless services, which are brought by TMIB under AKTEL brand. Some of the outstanding services are: EFill, Pulse offer, GPRS (Mobile Internet), Greeting Messages (FunDose), Buy 1 get 1 Free offers etc. By providing distinct services, TMIB has achieved the status of Fast Mover. Customer Care Centers: TMIB has established several customer care centers in major points of Dhaka city, such as Gulshan-1, Gulshan-2, Dhanmondi, Motijheel etc. Moreover, it has set up customer care centers in major districts of the country such as Comilla, Chittagong, Sylhet and Khulna. There are 11 customer care centers in total and these centers have allowed the subscribers to get free services even staying in remote places of the country. Friendly Corporate Culture: The corporate culture of TMIB is famous for being friendly and positive. The company has a Thursday dress-code for the employees. It also assembles money from every employee to have tea-break snacks. There is a pleasing synchronization among the staffs, which has built a positive corporate culture. Societal Marketing: TMIB regularly takes part in charity functions and is renowned for donating money in different deprived institutions around the country. The company has already donated money, free-books, free-medicines, and free-SIM cards in various schools, madrasas, and hospitals. It is also involved in societal marketing advertising. Recently the slogan campaign of TMIB supporting the autistic children has attracted huge attention. 2.10.2. Weaknesses: Poor Work Division Structure: The departmental structure of TMIB is not precise and well thought-out. Each department contains several units. However, the units are not separated by well-defined boundaries and

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it is very difficult to distinguish among them. The employees do not have any specific ID to track them separately department-wise. Lack of Employees: The departments of TMIB do not have sufficient work force to carry on a thorough task. Most of the employees in each unit are loaded with several duties and sometimes it becomes a burden on their shoulders. Lack of employees in each department is an obvious problem of the company. High Fixed Cost: Telecommunication industry has a high level of fixed cost. TMIB, operating in this industry, also faces such disadvantages. Office rent, network tower maintenance cost, operational cost etc are the fixed costs of the company. These fixed costs do not allow the company to gain the advantage of economies of scale, which is essential for the company to perform well financially. Because of high fixed cost and low economies of scale, the company also has a low re-investment rate. High Employee Turn Over Rate: As there are four major players operating in the market, it is apparent that each company will try to draw employees from other companies by offering better incentive-packages. This practice has created a high employee turn over rate in TMIB. Every year, lots of competent workers leave the company to join other companies. This has created a major crisis, as TMIB cannot implement any effective long-term strategy. Poor Network Coverage in Rural Areas: Presently, TMIB has network coverage in 61 districts. However, most of the upazilas of these districts do not have the coverage. Therefore, despite covering 61 main districts of the country, AKTEL users in rural areas do not get the frequency. This has created a disappointment among the subscriber and hence it is a drawback of TMIB. Poor Recruitment Policy: Though TMIB attracts skilled workers from renowned academic institutions all over the country, because of its poor recruitment policy, many undesired employees are hired over

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desired ones. Sometimes people with objectionable background are hired and sometimes, right people are not hired in right positions. Thus it creates a risk of wasting talents in the company. Shortages of Equipment Supports: Many departments in TMIB do not have sufficient equipment support such as: Fax machines, printers, scanners etc. Lack of proper equipments in departments has created work constraint. Dealer Insufficiency: TMIB has only 4 authorized dealers and 1 distributor, which is very insufficient for a company covering network in 61 districts. As a result of inadequate number of dealers and distributors, there is high possibility of Gray Marketing. If the SIMs or cards of TMIB pass on the hands of unauthorized dealers, it would be very difficult for the company to maintain a consistency in price and quality. 2.10.3. Opportunities: Incapable Public Sector: The public sector in Bangladesh is not capable of meeting the market demand of prospective phone users. In addition, the lengthy and bureaucratic process of public offices has discouraged people to use T&T and public mobile phone (TeleTalk). For these inconvenience systems, people in our country have adopted private mobile phone services as an alternative. This is a great opportunity for TMIB to grab this huge market of prospective phone users. Growing Population Income: According to World Bank source, the disposable income of people in Bangladesh is increasing every year. In addition, Bangladeshi market has high mobile phone acceptability. Both the factors are fostering the fact that, Bangladeshis is a potential market for mobile phone companies. Operating in such a market is a lucrative opportunity for TMIB. Business Diversification Opportunity:

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Operating in telecommunication industry has given TMIB with the opportunity of business diversification in related sectors. Having the expertise in telecommunication field for a long time, TMIB can expand its business in mobile phone set business, mobile phone battery business etc. Easy Entrance to Foreign Market: TMIB has joint venture with a prominent Malaysian telecom company, Telekom Malaysia Berhad. At the same time, operating in an aggressive market has enabled the company to become very competitive. These attributes have permitted the company to have an easy access to foreign market and compete with foreign rivals. Easy Loan Access: As discussed before, TMIB has collaboration with a number of financial institutions regarding billing and wage-payment purposes. This has allowed the company to have a good relationship with the institutions. TMIB can take advantage of these collaborations and can have easy access to loans and other financial matters. Full-fledged GPRS Package: TMIB has already brought GPRS (General Package of Radio Service) in Bangladesh. However, the service is in its initial stage. Since no other company has brought a complete GPRS package, TMIB can take this advantage and bring a full-fledged GPRS package. GPRS is a completely new technology in our country and it is obvious that the package will be a hot cake in the market. New Strategic Alliances: Strategic alliance in telecommunication industry is not a new phenomenon. All the four operators in Bangladesh have strategic alliances with several foreign companies. TMIB can form new alliances with eminent companies of different countries to achieve higher competitiveness and bring more expertise inside the company. Network Coverage Expansion: TMIB has already network coverage in 61 districts. However, most of the upazilas and rural areas of these districts are not under the coverage. In this circumstance, to increase the coverage in remote areas, TMIB can utilize its already established towers. Otherwise, they

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can set up new towers. Establishing new towers will not be a barrier for TMIB, as the company can form collaborations with Grameen Phone or other operators who already have towers in those areas. 2.10.4. Threats: Widest Coverage of Grameen Phone: Grameen phone (GP) has network coverage in 61 districts as TMIB. Yet GPs coverage is better than TMIBs coverage, as GP covers all upazilas and rural areas. On the other hand, TMIB provides network only in the city areas. Because of the availability of network in distant places and good frequency, GP has a superior brand image to people. This is of course a threat to TMIB. Political Instability and Natural Calamity: Bangladesh is called red-zone in terms of political risks. The instability of administration has resulted in unstable regulations. With the change of governments, regulations also change from season to season. This volatility has hindered TMIB from making a long-term effective strategy. At the same time, the country also has a high natural calamity tendency. Natural catastrophes damage the network towers situated in different districts of the country. Recession in the Economy: Mobile phone is still considered as a luxury in Bangladesh rather than a necessity. Being one of the poorest nations in the world, the risk of recession in Bangladesh is very high and frequent. During the recessions, people are reluctant to invest behind luxury items such as mobile phones. This is a huge obstacle for TMIB to reach all population sectors in the country. Non-cooperative Telecommunication Regulatory Body: The regulatory bodies in the telecommunication ministry are unfair and biased. Plus, the system itself is bureaucratic and lengthy in Bangladesh. Because of their non-cooperative attitude and injustice, the usual work-pace of TMIB is slowing down. This is of course a risk to the company.

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Customer Resistance against Tariff: Any new tariff or VAT is always a controversial issue to the people of our country. People in Bangladesh are reluctant to accept new tariffs and it takes a long time for them to approve it. In the recent budget, the government has imposed a tax of TK.900 on every SIM card, which has created a huge debate and protest among customers. Many of the customers have stopped buying SIM cards. This tax has also hindered the mobile operators to maintain a constant price level and to offer attractive packages. Existing Competitors in the Market: At present, there are four private and one public mobile phone operators operating in the Bangladeshi market. All of the private operators are aligned with foreign companies. These companies are following aggressive marketing strategy and the level of rivalry in the industry is very high. The companies are trying to bring new and attractive offers every week at a striking price level. This high intensity of competition in the industry is a major threat to TMIB, as TMIB has to survive this fast paced competition. Upcoming Competitors in the Market: Besides the existing competitors, new and large competitors are also trying to enter the Bangladeshi market. Some of these companies are Reliance, Tata etc. These new companies will increase the rivalry level in the industry. Private T&T Phone Companies: Apart from the new and existing mobile phone operators, competition is also expected from private T&T phone companies. Because of the inadequacy of the public T&T Company, many private companies are coming in the market. These companies are also a threat to TMIB, as they offer similar services at a lower price to customers. Possible Health Risk from Mobile Phone: Recently, a scientific study has shown that there is high risk of health hazard including brain tumor and cancer from the usage of mobile phone. The study concluded that long time use of mobile phone might cause such diseases and so people should reduce their use

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of mobile phone. Though there is no solid evidence of this fact, it has created an argument and panic among mobile phone users. This is naturally a threat to TMIB.

2.11. Legal Issues & Problems Faced by AKTEL:


The Legal issues and problems faced by AKTEL are not indifferent from other mobile companies in the industry. The companies more or less face alike problems. The legal issues, procedures and problems are discussed below. 2.11.1. Licensing: By paying some fixed amount of fees one can get the license. But the companies need to pay tariff on monthly basis. There is a clause in the license that for every handset tk.1, 100/ yearly loyalty needs to be paid. The customers are reluctant to pay this, so are the mobile operators. Both of the parties are not paying the loyalty fees and government did not even cancel the clause. So huge amount of money is due by the companies to government. 2.11.2. Reduction in tariff rate: Government pressurizes mobile companies to reduce the tariff rate. Yearly, the companies need to verify with the government regarding the tariff rate. The government makes sure the companies provide standard services to the customers. 2.11.3. VAT: All mobile companies need to pay 15% VAT. This is a sector where the government does not have any investment while enjoying the revenue. This is unique to Bangladesh. Users are paying the 15% VAT which they do not want to pay. 2.11.4. TAX: Every year companies pay large amount of taxes. The companies need to pay taxes even for the equipments they purchase. Recently, the government has imposed a sales tax of Tk. 900 on the purchase of each SIM card. A survey has been conducted to assess the impact of the introduction of the new tax, which shows that the growth of new subscribers dropped by two to seven per cent in June 2005. During June, only 76000 new clients were added.

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2.11.5. Inter-operator Problems: Inter-operator problems came into being when different mobile companies came into the market. When there was GP and AKTEL in the market, both of the companies faced problem while doing business. There was a lack of infrastructure in the industry. Problems aroused in the field of inter-operator connectivity. At that time Sender Keep All (SKA) was in practice. As long as there were equal amount of traffic there were no problem. But there was a time when, more tariff congestion came from AKTEL. GP asked AKTEL to share the profit. As AKTEL denied, GP started to block the calls coming from AKTEL. It created unnecessary system overload. In order to put an end to the problem AKTEL agreed to share the profit thus call termination peak/off-peak was introduced. And equilibrium prevailed in the market.

2.12 Recommendations:
Though TMIB (AKTEL) is a well-established company in Bangladesh and running successfully in the domestic market, it has a handful of internal weaknesses. Together with those weaknesses, the company is facing numerous threats. TMIB has already identified some of the major weaknesses and is trying to recover from them. However, there are some unidentified, neglected areas, for which it has not taken any effective measures yet. Therefore, the company needs to focus on the following recommendations by adopting better strategies: TMIB should develop a well-structured work division by separating the departments and units by a well-defined boundary and assigning specific tasks to each unit. The employees should carry distinct ID cards so that they are identified unit-wise. The company should recruit more employees in each department as it is lacking adequate workforce. Thus, the burden on the shoulders of the employees would be lessened. The company should try to achieve economies of scale by lowering its fixed costs or escalating revenue to build entry barrier in the industry for the new competitors.

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The company should reduce its employee turnover rate by offering high incentives and attractive salary packages, which is crucial for the company to survive in this high competitive industry. Though TMIB has network coverage in 61 districts, most of the upazilas are not covered. Therefore, the company should try to cover its network in all the important upazilas of each district as like GrameenPhone to increase its subscriber base. The recruitment policy in TMIB is not satisfactory. The HR department of the company should be extra cautious while hiring the right employees in the right place. The company is facing equipment shortage in every department, which is of course an obstacle for the employees. The company should bring necessary equipments such as FAX machine, scanners, printers etc for each unit. Because of the insufficiency of authorized dealers, the company is facing the threat of gray marketing. TMIB should employ more authorized dealers in order to prevent gray marketing. TMIB should offer installment system for buying SIM cards, because of the recent VAT of Tk. 900 on each SIM purchase. Many potential customers are reluctant to buy mobile phone lines because of the high cost involved in it. By offering an installment system, these customers would be encouraged to purchase SIM cards. Nonetheless, even after confronting such risks and having internal weaknesses, TMIB has maintained its dominance in the industry. The company has achieved many competencies through its operation since 1997 and is trying to recover from its weak points. Though other operators are trying their best to beat AKTEL, TMIB is still ruling the industry with the promise of being Clearly Ahead.

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