BUSINEES RESEARCH BBA –VII

1. BACKGROUND OF TELECOMMUNICATION

World has become a global village and this is due to prompt, easy and
accessible communication. Telecom segment has changed the shape of
communication everywhere and this is a hot issue in Pakistan now a days.

Telecom sector has emerged, as a fast growing industry during past few years
and now Pakistan is promising as one of the most progressive country where
the number of mobile phone subscribers has reached more than 94.3 million
with more than 90 percent of the country having access to mobile services for
this reason different companies are being attracted to invest heavily in this
division.

Due to the enormous competition among different companies of both service

providers and mobile set providers, mobile phone is almost in reach of every
common man in Pakistan and as a result of this brisk demand; companies are
investing seriously in this section.

Currently there are five major companies operating in Pakistan, Mobilink,

Ufone, Telenor, Zong and Warid. According to the Annual Report for year
2008-09 issued by Pakistan Telecommunication Authority (PTA), Telecom
sector shows 20% revenue growth in 2008-09’ hence sustaining positive
growth trends in the sector. The total telecom companies have invested in the
sector in 2008-09 stood at $1.7 billion. The cellular revenues grew by 16
percent and stood at Rs 212 billion at the end of 2008-09.

Today, if we watch Television no matter which Pakistani channel we tune in

we get to watch every second ad of any of the cellular network .same is
situation when we see a newspaper, listen to any FM radio channel or even if
we using an Internet .the present call rates of all networks operating in Pakistan
are the lowest among other South Asian countries .all cellular networks have
signed some of the famous celebrities of Pakistan for their campaign. The size
of telecommunication section is increasing rapidly in Pakistan and within few
years it has emerge as the most important sector in Pakistan‘s economy.

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Telecommunication sector’s share in overall FDI of the country stand at 27.9

percent in 2007-08. And Mobilink alone is investing around $2.5 billion.
Similarly Telenor and Warid, are investing around $1.8bn and USD 325
million respectively during 2007-09 . The Chinese company ZONG has
invested $1.66 billion so far in Pakistan.

EX Minister for information technology, Owais Ahmed Khan Leghari said the
number of mobile phone users in the country runs in millions, which indicates
improved living standard of the people. He pointed out that telecom sector was
in the midst of a revolution with the overall mobile phone subscriber base
already hitting 20 million mark and registering a tenfold increase in the
customer base which only a couple of years ago stood at 2.8 million.

Every one from top business executives to daily wagers looks busy on mobile
phones in offices, on roads and in market places in the Pakistan.

India might be world’s fastest growing telecom market but the growth is deeper
in Pakistan where a larger percentage of population has a mobile connection. In
contrast of a lower per head income and almost equal prices of handsets as well
as call tariffs as in India, Pakistan has much higher mobile penetration of about
30 per cent. This is more than double of 14.3 per cent in India. (India times
2007)

PROBLEM STATEMENT

Telecommunication has shown an immense rapid growth in Pakistan and it has

become a sizzling concern in different perspectives like economic growth,
foreign investments, a great no of newly well paid jobs and new businesses and
there has been a great research on all these areas. But a very important thing,
which we see that this telecom segment and especially cellular one has become
an essential part of, one’s life and people who are using these services can even
not imagine living without these technologies.

So, it has affected the ways of living of people i-e this telecom has done a great
deal with traditional cultures and social interactions of people. These all things
affect the marketing strategies of companies as consumer behavior’s
knowledge is one the most important factors for successful strategy formation.

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There has not been too much research on this issue, which is a very important
one.

So, for these issues we have chosen our research study in the area that how this
rapid invasion of telecom, specially cellular services have their impacts on
social setups and in order to do this we must have a knowledge of background,
past and future of this sector in Pakistan.

Literature Review

We tried our level best to find any previous studies regarding our proposal so
that we could take help from that and also find the deficiencies in that which
must be overcome in our proposal and also further in our research. We have
found some research work done on the topics that;

 How telecom is reducing the poverty in developing countries and some

other stuff related to Telecenters in rural areas of Pakistan.

 “Study of Telenor in telecommunication sector of Pakistan”.

But these researches were not exactly matching our topic and research
questions.

Research Objectives:

 Why is telecom sector playing an important role in economic

development in Pakistan?

 How it provides the prime services that an economy needs for rapid
growth, development and modernization?

 What are the factors responsible in increasing the mobile users so rapidly
in Pakistan? And what impact it had on the life of common person in

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Pakistan ?

 To what degree the commercials of the cellular networks influence

people in comparison with their requirements?

 What are the different strategies the cellular companies use to compete
with their rivals to capture the bigger market share? And to what extent
these practices are practices ethical?

 Will this sector continue to bring the degree of FDI in Pakistan as in the
previous years and continue to earn previous high revenues as compare
to other sectors in Pakistan?

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