U-FONE

Document Sample
U-FONE Powered By Docstoc
					FINAL PROJECT                                                                 A STUDY ON CELLULAR PHONE USAGE



    EXECUTIVE SUMMARY

                 “Level of customer satisfaction for Ufone
                Compared to other cellular phone services”




    Hypothesis
            o Ufone received a favorable response from consumers at its
                 launch
            o Customer satisfaction for Ufone is higher compared to other
                 cellular phone services




    Introduction
    Mobile phone usage in Karachi has increased with an abnormally
    high rate in the recent years. In short duration, the concept of mobile
    phones has evolved from being a luxury to being considered as a
    necessity. Mobile Phone Service Providers compete actively in this
    highly profitable and growing market, thus making the obtaining of a
    mobile phone account very simple, and reasonable. This research
    study takes an outlook which recognizes the fact that, presently, more
    than obtaining an account, the debate lies in how satisfied the large
    number of service users are in this growing market.




                                                   1
                          PAF – Karachi Institute of Economics & Technology
FINAL PROJECT                                                                 A STUDY ON CELLULAR PHONE USAGE



    Introduction
    The communication industry has experienced an amazingly high rate of growth in
    Pakistan in the last couple of years. This includes internet communication, telephony
    communication and other means of wireless communication.


    Further classifying this huge industry, usage of cellular phones has experienced the
    highest growth rate. According to official statistics, four cellular companies, Mobilink,
    Instaphone, Paktel, and Ufone, share more than three million phones among
    themselves. The cellular phones saw a 142% growth in 2001 and 67% in 2002.


    Pakistan's 149 million people, who for years, had been waiting for the privilege of a
    phone, multiplied cellular phone demand and the company profits as soon as mobiles
    were introduced. Seeing this huge boom, and potential to make money, the
    government launched its own cellular company; Ufone which is wholly owned by the
    PCTL.


    This research study takes an outlook which recognizes the fact that, presently, the
    cellular communication industry is a highly attractive one, requiring huge
    investments but what factors led to the unexpectedly quick success of Ufone in this
    growing market.




                                                   2
                          PAF – Karachi Institute of Economics & Technology
FINAL PROJECT                                                                     A STUDY ON CELLULAR PHONE USAGE




    COMPANY BACKGROUND




    Launched on January 29, 2001, Ufone is a new cellular operator in Pakistan. Ufone
    services are offered to you by Pak Telecom mobile Ltd., which is a 100% owned
    independent subsidiary of Pakistan Telecommunications Corporation Ltd.

    Ufone has been a highly successful venture both in terms of subscriber uptake and
    coverage. Touching 100,000 subscribers in less than four months of operation.

    With fastest expanding coverage, unmatched product leadership, and consistent focus on
    customers, Ufone has emerged to be the most prominent player in the market in the short
    span of its operations.

    Based on its never ending commitment to provide innovative quality and convenient
    accessibility, it offers online access to Ufone services. Customers can now access
    information regarding services offered by Ufone, whenever they desire, just by a simple
    click.
    The company means it when it says “Ufone-last to enter, First to venture-Every time”

    SERVICES                                              Messaging

        o    Internet Access                                  o   MMS
        o    Online Bill Payment                              o   SMS
        o    Power Sim                                        o   Web 2 SMS Chat
        o    WAP                                              o   Global SMS
        o    International Roaming                            o   Email Over SMS
        o    Internet via SMS                                 o   Urdu SMS
        o    Call Management                                  o   Voice Mail




                                                       3
                              PAF – Karachi Institute of Economics & Technology
Objectives
1. What are the attributes responsible for developing consumer preference in the
case of Ufone?


2. What response did Ufone receive from consumers at its launching?


3. What is the level of customer satisfaction for Ufone compared to other cellular
phone services?




                                            4

                     PAF – Karachi Institute of Economics & Technology
Research Methodology
The research methodology we will use in conducting this research is Causal-
Comparative Research. It is the study that investigates a cause and effect
relationship between two or more variables. Some of all the variables involved in a
case-comparative study maybe qualitative i.e. they cannot be expressed in any
standard numerical scale. Independent variables are also involved in a casual-
comparative study.



Research Design
The steps of the involved in the research process are:


      Define the research problem
      Scope and limitation
      Setting of hypothesis
      Identification of target population
      Sample design
      Collection of data
      Processing of data
      Analysis of data
      Testing of hypotheses
      Conclusion
      Research report




                                             5

                      PAF – Karachi Institute of Economics & Technology
Scope and limitations
Considering the large number of users, efficient limits must be applied on the
research, which also benefit the scope of the project. The research is being
conducted for Ufone , to obtain a most appropriate access of GSM network users,
who comprise the majority of mobile phone users.
The research will try to concentrate on the most popular factors that are responsible
for acquiring a Ufone connection. On the basis of such factors, the degree of
satisfaction would be determined. The research would be conducted, keeping in mind
the cost and time constraints that apply on the research.
Although the sample population may be expanded to further authenticate and refine
the research, primarily university students will be the sample for this research.




                                             6

                      PAF – Karachi Institute of Economics & Technology
Hypotheses
           1. Ufone received a favorable response from consumers at its launch
           2.   Customer satisfaction for Ufone is higher compared to other cellular
                phone services



Sampling
A sample is a subset of the population that represents the entire population. In reality, a
sample size decision is usually a compromise between what is theoretically perfect and
what is practically feasible. There is no significant relationship between the size of a
sample and its representatives of the population, from which it is drawn. It is the selection
method (according to the elements of the population), which determines a sample‟s
representative ness.


Instead of determining representative ness, the size of a sample affects the accuracy of
results. The accuracy of a sample is a measure of how closely it reports the true values of
the population it represents.


In the Research process we have utilized Convenience Sampling method.
The respondents targeted were people outside Ufone and Mobilink customer care centres
in Gulshan-e-Iqbal.


Sample Size       60 respondents



Primary Data
Primary Data is the Data that is gathered directly and is specific to the research and thus
it serves an important purpose in the research process and reliable primary data is in fact
a base of a reliable research.


In the research process the main source for collecting data has been questionnaires.


                                               7

                        PAF – Karachi Institute of Economics & Technology
Analysis Of Questionnaire
The basic purpose of this questionnaire is to determine the satisfaction level of the mobile

phone service availed by you. It is designed to survey your opinions and attitudes

regarding the various factors of the mobile phone service that you use.



Please respond to all questions, and feel free to ask for assistance wherever required.



Question 1: Do you use cellular services?

   a. Yes

   b. No



Purpose:

The question was posed in order to discriminate between the total population and the

target population for the research.

                    Yes                                                No
                    60                                                  0


Analysis

This question allowed us to differentiate out target population from the whole.




                                              8

                       PAF – Karachi Institute of Economics & Technology
Question 2. For what purpose do you use the cellular service?

   a. Business

   b. Personal

   c. Other (Please Specify) _______

Purpose

The question was used to find out, what was the major purpose of using the cellular

connection by the people.


           35

           30

           25

           20                                                         Businees
                                                                      Personal
           15
                                                                      Other
           10

            5

            0




           Business                       Personal                               Other
              29                             23                                    8


Analysis

The responses to this question show that most of the people are using their cellular phone

connections for business and personal purposes. The other major purpose was socializing

which somewhat comes under personal. This shows the company that the cellular phone

usage is important towards the customer as he or she is using it for business and personal

purposes.




                                              9

                       PAF – Karachi Institute of Economics & Technology
Question 3. Which sort of mobile set technology do you prefer?

   a. Analog

   b. GSM

Purpose

The purpose of this question was to find out which technology attracts the customer more

either “gsm” or “analog”.



           60
           50
           40
           30                                                             GSM
           20                                                             Analog
           10
            0




                  Analog                                            GSM
                    12                                               48


Analysis


The response to this question indicates that the target population prefers to use GSM

technology. This is a positive finding Ufone as it uses the same technology.




                                             10

                      PAF – Karachi Institute of Economics & Technology
Question 4. Which company’s cellular service do you use?

   a. Ufone                                            c. Paktel

   b. Mobilink                                         d. Instaphone

Purpose

The purpose was to find out which service is most popular amongst the respondent‟s.




           30

           25

           20                                                              Ufone
                                                                           Mobilink
           15
                                                                           Paktel
           10                                                              Instaphone

            5

            0




      Ufone                 Mobilink                   Paktel                Instaphone
       20                     28                         6                        6


Analysis

The responses to this question show that Ufone is the market challenger i.e: it has the

second highest market share.




                                              11

                       PAF – Karachi Institute of Economics & Technology
Question 5. Why do you use cellular services?

   a. Convenience                                      d. WAP

   b. Price                                            e. Roaming Services

   c. SMS                                              f. Other

Purpose

The purpose of this question was to find out which offers of the company are preferred

most by the respondents. At the same time it leads us to find out on which factors the

company should emphasize more in order to keep their customers satisfied.


       60

       50

                                                                 Other
       40
                                                                 Roaming Services
       30                                                        WAP
                                                                 SMS
       20                                                        Price
                                                                 Convenience
       10

        0




Convenience          Price          SMS          WAP        Roaming Services       Other
      50              12             25            5                10               5
(The total of this chart is 107 as people were allowed to select more than one response for

this question)

Analysis

The result of this question shows that most people use cellular service for convenience

but other factors is also important. The response shows that 4.7% of the responses

received used cellular service for WAP services. This service is only available in Ufone

and therefore Ufone has an advantage here.

                                              12

                       PAF – Karachi Institute of Economics & Technology
Question 6. How satisfied are you with the mobile phone services available?

+2|_____________|_________________|__________________|_________________|-2
               +1                                  -1
Very Satisfied Satisfied      Neither/nor      Dissatisfied Very Dissatisfied

Purpose

This question is one of the most important questions. This is because it is directly related

to one of our hypothesis and carries the highest weight in decided whether the hypothesis

should be accepted or rejected.




                       17%         3%
                                                    25%             Very Satisfied
                  7%                                                Satisfied
                                                                    Neither/Nor
                                                                    Dissatisfied
                                                                    Very dissatisfied
                                     48%




Very Satisfied         Satisfied        Neither/Nor        Dissatisfied     Very dissatisfied
      15                  29                   4                  10                    2


Analysis

Most of the respondents for this question were satisfied by their cellular phone service.

25% of the respondent were very satisfied with their service. But about 20% of the

respondents were either dissatisfied or very dissatisfied.




                                               13

                        PAF – Karachi Institute of Economics & Technology
Question 7. What value added services should be added to your cellular service?

   a. Mobile Banking                                   c. Easy Billing

   b. Web services                                     d. Others _______ (Please specify)

Purpose

The purpose of this question was to gather data about which additional features and

services should be added to their cellular connection.




         35

         30

         25
                                                                           Mobile Banking
         20
                                                                           Web Services
         15                                                                Easy Billing
                                                                           Others
         10

           5

           0




 Mobile Banking           Web Services               Easy Billing                    Other
       12                     30                         14                            4


Analysis

Analysis of this question shows that customers would really like the companies to

increase their web based services, mobile banking and easy billing. One other important

feature which came out was the demand of gaming over cellular networks.




                                              14

                       PAF – Karachi Institute of Economics & Technology
Question 8. Payment of your bills is done through:

   a. Personal Means                                   c. Organization

   b. Parents                                          d. Others

Purpose

The purpose of this question is to find out how the users finance their cellular connection

expenses. This will enable Ufone to analyze its tariffs and be able to design better tariff

plans for its customers.



            35
            30
            25
                                                                       Personal means
            20                                                         Parents
            15                                                         Organization
                                                                       Others
            10

             5
             0




 Personal Means               Parents               Organization                  Other
       34                       18                       8                          0


Analysis

The analysis of this question showed that more than half of the respondents use their

personal means to pay their bills. When the customers are paying themselves they will

want the best return on their money and would want excellent service. The company can

use this information to modify its tariffs accordingly.



                                              15

                       PAF – Karachi Institute of Economics & Technology
 Question 9. Is SMS, a high involvement factor?

|_____________|_______________|_______________|______________|_____________|
0%               20%                40%                  60%                  80%             100%



 Purpose

 The purpose of this question to analyze the involvement of the customer with SMS.

                                    INVOLVEMENT IN SMS

            18
            16
            14
            12
            10
             8
             6
             4
             2
             0
                  0-20%         21-40%        41-60%        61-80%        81-100%



     0-20%                21-40%             41-60%               61-80%            81-100%
        5                   13                 16                   20                  6




 Analysis

 The analysis of this question shows that people consider SMS as a very important factor.

 The importance of SMS shows the company that it can use this to its advantage by

 offering various kinds of services on SMS.




                                                 16

                          PAF – Karachi Institute of Economics & Technology
Question 10. What purpose do you use SMS? ( You may tick (                ) more than one)

   a. Friends/Socializing                             c. Chatting

   b. Sending News /Jokes                             d. Others

Purpose

The purpose of this question is to identify why cellular phone users use SMS.




              40
              35
                                                             Friend/Socializin
              30                                             g
              25                                             Sending
                                                             news/Jokes
              20
                                                             Chatting
              15
              10                                             Others

                5
                0




Friends/Socializing      Sending News/ Jokes              Chatting                Other
        35                        6                         16                      3




Analysis

The analysis of this question shows that people are mainly using the SMS for socializing

and messaging friends.




                                             17

                      PAF – Karachi Institute of Economics & Technology
Question 11. What is the most dissatisfying factor of your mobile phone service?

   a. Network congestion                               d. Weak reception

   b. Price                                            e. Less coverage

   c. SMS charges                                      f. Others________(Please Specify)

Purpose

This question serves the purpose of finding out what weaknesses of the company is

dissatisfying customers. The company can work on its weaknesses and improve its

service to reduce dissatisfaction.


         25
                                                                   Network
         20                                                        congestion
                                                                   Price
         15
                                                                   SMS charges
         10
                                                                   Weak
           5
                                                                   Reception
           0
                                                                   Less coverage




   Network                                                    Weak
  Congestion           Price         SMS charges             Reception           Less Coverage
     21                 10               13                     14                     2


Analysis

The responses to this question show that customers are not happy about the network

congestion and weak reception of the cellular phone service. About 17% of the customers

were also not satisfied because of the price and as price is an important factor the

company should consider working on this weakness. Some of them were also not happy

about charges on international SMS.



                                              18

                       PAF – Karachi Institute of Economics & Technology
Question 12. Are you using Pre paid service?

   a. Yes                                              b. No

Purpose

The question leads us to find what kind of connection our target users are using and

which service do they prefer more either prepaid or postpaid.



                      45
                      40
                      35
                      30
                      25                                                   Yes
                      20                                                   No
                      15
                      10
                       5
                       0


                                 Prepaid Vs Postpaid Service



                    Yes                                                No
                    45                                                 15


Analysis

This shows that majority of users use prepaid service and that the company should also

try to increase its post-paid customers.




                                              19

                       PAF – Karachi Institute of Economics & Technology
Question 13. Do you think Pre paid services are designed for low-income groups and

students?

   a. Yes                                                b. No



Purpose

This question was included to find out about the positioning of the target population for

the prepaid service.



                        45
                        40
                        35
                        30
                        25                                                   Yes
                        20                                                   No
                        15
                        10
                         5
                         0




                       Yes                                               No
                       46                                                14




Analysis

From the above results we can say that prepaid services are preferred by most of the

youth and low income group.




                                                20

                         PAF – Karachi Institute of Economics & Technology
Question 14. Which service characteristic you consider most important

   a. Connectivity Time                               c. Geographical Coverage

   b. Voice Clarity                                   d. Other_________(Please Specify)

Purpose

The purpose of this question is find out which feature customers value most, this will

enable the company to focus on those characteristics and make sure that they are

improved to provide more value.




           25

           20
                                                                Connectivity Time
           15
                                                                Voice Clarity
                                                                Geographical Coverage
           10
                                                                Other
           5

           0




Connectivity Time         Voice Clarity           Geographical Coverage                 Other
      18                       17                          24                             1


Analysis

   The response to this question shows that cellular phone service users consider

   coverage as an important factor and therefore the company should make sure that

   there is no deficiency in coverage as this will cause the most dissatisfaction among

   customers


                                             21

                      PAF – Karachi Institute of Economics & Technology
Question 15. Your monthly charges range between.

   a. Less 500                                         c. 1500 – 3000

   b. 500 - 1500                                       d. More than 3000

Purpose

The purpose was to judge the spending power of the users and how many users fall into

each expenditure bracket, so that the company can utilize this information to plan and to

decide their offers and packages accordingly.


              25

              20
                                                                     Less than 500
              15
                                                                     500-1500
                                                                     1500-300
              10
                                                                     More than 3000
              5

              0




  Less than 500             500 - 1500              1500 - 3000             More than 3000
        25                      17                      14                         7


Analysis

According to the above results, we can judge that there is a low volume of people who

are spending more than Rs.3000 monthly so the company can use this information to

provide incentives to people to spend more on there cellular service.




                                              22

                       PAF – Karachi Institute of Economics & Technology
Testing of Hypothesis
   1. Ufone received a favorable response from consumers at its launch


The data collected from our questionnaire shows that Ufone is popular among cellular
phone users and also received a favourable response at its launch. Our findings
confirm this as it shows that the number of users of Ufone are fast catching up to the
number of users of Mobilink, which has the highest number of users in the industry.
Therefore we accept this hypothesis based on our analysis of the data collected.




   2.   Customer satisfaction for Ufone is higher compared to other cellular
        phone services


A thorough and rigorous analysis of each question of the questionnaire has been

conducted. Based on this analysis, and with additional emphasis to the responses of some

key questions, we, to the best of our abilities and understanding, accept this hypothesis

and conclude that the hypothesis stands valid.




FINDINGS
        Research shows that cellular phone are no longer a commodity for people rather
        they have become a necessity.


        Cellular phones with GSM technology are far more popular than Analog cellular
        phones


        Mobilink has the leading market share and Ufone has the second highest market
        share
                                              23

                       PAF – Karachi Institute of Economics & Technology
Mostly students use cellular phones for their personal usage and consider it a
necessity because of lack of law and order in cities like Karachi.


Students prefer Pre paid packages because these packages are affordable to them
and convenient to use. No hassle of billing in excess of their resources.


Research shows that range of pocket money/extra allowance of Students who use
GSM service is between RS 600 and RS 15000. These college going students
belong to upper middle and upper income group families.


Parents pay the bills of their children by giving them extra allowances for cellular
service for the purpose of convenience.


Around 73% of the respondents are either satisfied or very satisfied with their
cellular phone service


SMS is a high involvement factor and is an important means of communication
for respondents for socializing.


50% of the respondents wanted to use web services and therefore companies
which use Analog technology are at a loss as their network cannot support web
services.


Respondents were most dissatisfied because of network congestion due to which
they have to try several times before their call is connected. This dissatisfaction
was mostly noted in customers of Mobilink and Instaphone


Prepaid cards are popular because they have no hassle of payment of bills and
people who have a low number of outgoing calls find it cheaper to use prepaid
cards.

                                      24

               PAF – Karachi Institute of Economics & Technology
 GSM service gives better reception and service as compare to Analog service.


 Customers think that there is no future of Analog service but Analog service
 providers are making their service digital but still they cannot come with par with
 GSM network that gives convenience, low cost, Value added features etc.


 Students need more WAP services added to their cellular network to remain in
 touch with latest updates and entertainment stuff.


 As SMS is a high involvement factor, respondents were very happy with the inter-
 network SMS introduced recently.




RECOMMENDATIONS
 SMS is a high involvement factor for consumers and the majority of them use it

 for Socializing and communication with friends. Therefore Ufone should allow

 them to make a „Friends group‟ in which it would cost them less to send SMS

 within the group. This way the company would increase satisfaction of its

 customers and also increase its preference against competitors.



 Research shows that customers would like „Easy billing‟ facility to be added.

 Therefore Ufone should take the first step in this regard and become the first
                                       25

                PAF – Karachi Institute of Economics & Technology
company in Pakistan allowing consumers to pay their bills and recharge their pre-

paid accounts from its website.



The convenience in pre-paid cards has increased consumers but at the same time

customers spend less because of the six-month validity of cards. Our research

shows that about 42% of the people spend less than Rs. 500 monthly on their

cellular phone service. The company should therefore try to give incentives to

people to use more cellular phone services so that it can increase its income from

sale of pre-paid cards.



Some of the services that customers want are available in Ufone and the voice

clarity of Ufone is considered to be better than others. Therfore there are many

people who would like to switch to Ufone from their current cellular service

provider, but cannot do so because Ufone is not offering new connections at the

moment. Therefore the company should consider offering new connections as this

would increase its customers.



Ufone is the only cellular service provider in Pakistan which is offering WAP

services at the moment. Research shows that customers are interested in using

WAP services and therefore the company should promote its WAP services as a

competitive edge over its competitors to attract customers away from the

competition.




                                      26

               PAF – Karachi Institute of Economics & Technology
BIBLIOGRAPHY

   Moven, John C., Consumer Behavior (Third Edition)
   Pakistan Economist – Feburary 2003 issue
   www.Ufonegprs.com




                                    27

             PAF – Karachi Institute of Economics & Technology