ZONG: CHINA MOBILE IN PAKISTAN

ZONG: CHINA MOBILE IN PAKISTAN

Aiza Azam

July, 2012


China Mobile Limited is recognized as the largest telecom company in the world, ranking 77th on Fortune 500’s biggest companies across the globe.  Keeping in mind the fact that among each ten people in this world, there is one using its services, China Mobile is a considerable communications force to be reckoned with.

Its first overseas venture, Zong, is the brand operating under the subsidiary China Mobile Pakistan (CMPak) and is viewed as a “role model” for the parent company. China Mobile’s decision to establish its first project abroad in Pakistan, as explained by Zong’s CEO Mr. Fan Yunjun, was taken primarily because of the strong and time-tested relationship of the two countries. However, other factors were also involved. Chief among these considerations was the fact that Pakistan is home to the 6th largest population in the world, giving it tremendous potential as a market for the mobile industry, a similarity it shares with its neighboring brother, China. The decision was supplemented by the desire to encourage development in other sectors in Pakistan as well, mobile industry being a strategic area that supports the growth of other industries and that is central to the establishment of further infrastructure.

Zong has also played a major role in providing employment opportunities to the local youth. The company focuses on two areas in generating fresh blood: internal hiring (based on performance) and the hiring of fresh graduates. The latter are chosen from among the country’s top 10 universities and enrolled in a training program. The company tries to avoid focusing on experienced talent only, and prefers training new recruits, keeping in mind support for their long term career growth. For both types of candidates, Mr. Fan explains, it is necessary to provide strong leadership, not only to give guidance but also to identify and unlock potential in individuals. Given that over 99% of the staff consists of Pakistanis, it is a great employment opportunity for the local talent.

The Chinese staff is constituted by qualified employees of China Mobile - possessing extensive experience in the areas of market operations, engineering construction, network development, value added service, and Research & Development - who work closely with their Pakistani peers. In Pakistan they are faced with the twin barriers of language and culture. However, the company has managed to overcome any difficulties by insisting that all employees emulate its core values: hard work and team-spirit. Mr. Fan believes that the industry as a whole needs a larger resource base, for which there is a huge potential in Pakistan. The only obstacles for individuals looking to join the mobile industry are a lack of education and adequate training.

Zong has undertaken several collaborations with local institutions. In October 2011, it entered into a three-year partnership agreement with Manchester United, targeting the sports fans demographic, specifically the estimated 10 million United fans in Pakistan. Using a co-brand SIM card, users have access to contents dedicated to the football club, including updates on their favorite United player, the team’s performances and match highlights; players’ interviews; use of a social networking service that allows fans to interact with each other in an exclusive community; provision of United specific wallpapers, dial tunes and ring tones; and participation in various contests.

In addition, Zong has set up a joint mobile lab with the National University of Sciences and Technology (NUST), one of Pakistan’s leading academic institutions, which provides a fully equipped laboratory to facilitate education, training, and R&D projects in the telecom field. The company is also involved in aid distribution to victims of natural disasters - as in the case of severe floods in recent years - as part of its Corporate Social Responsibility (CSR) activities.

China Mobile is now interested in establishing an English language call center in Pakistan to cater to its millions of globally distributed English-speaking customers. It would use the local human resource and, thereby, generate much needed employment. With this venture, the company also hopes to attract investment in the infrastructure of Pakistan. Another future project is to work towards set sharing, infrastructure sharing and safeguard sharing in the mobile industry by entering into cooperation with other local cellular service providers such as Mobilink, Telenor, Ufone, and Warid, as well as Internet service providers (ISP) that include Cybernet and Wisecomm. The eventual goal for Zong, as stated by its CEO, is to provide one-stop service to its customers. This stands out as the company’s unique competitive edge.

However, the company has faced certain difficulties in operating in Pakistan. Chief among these is the enormous tax burden in the country, which is estimated to be the highest in South Asia.  There are also severe frequency interferences and limitations in acquisition of cell sites which have significantly constrained the network development. Moreover, due to the keen competition in Pakistan, the Average Revenue per User (ARPU) per month is very low.  In Pakistan, it is at less than $2, the significance of which can be appreciated when compared with the ARPU in other countries ($40 in Europe and $12 in China). Despite these difficulties, Zong still believes that there is significant room for long-term development, and China Mobile intends to extend its commitments in Pakistan beyond a purely business purpose.

The company’s stated objective is to become an ‘indispensable digital life partner of people’. Its customer-centric approach requires that it provide its users with high quality network and focus on their particular needs. But its objectives are not limited to this avenue. Zong lays heavy emphasis on contributing to the enhancement of relations between the two countries and bridging the ‘digital divide’.  This commitment is reflected in Zong’s continuous efforts in providing highly cost-effective mobile voice and data packages which facilitate Pakistanis in enjoying mobile communication services.It can also be seen in its desire to invest and attract further investment in Pakistan, not only in the mobile industry but in other ICT sectors as well. The self-declared ‘envoy of friendship’ from China to Pakistan, is working tirelessly to achieve this, and believes that with clear direction and vision, the strategy will pay dividends for both nations. There is a need, however, to make the country’s policies more investment-friendly, so that companies like Zong can act as a stimulant to the stagnant economy of Pakistan and provide jobs for the unemployed youth.

For further information about Zong and its projects please visit
http://www.zong.com.pk/
http://www.manutd.zong.com.pk/
 

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