Marketing plan for a Telecommunications Company

Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition. Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”).

The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.

The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives. Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”.

In our survey we tried to find out the link between different stages of developing a long term marketing plan. For our studies we have selected Sri Lanka Telecom Ltd. Detail analysis of the company and the telecommunication industry situations are given under respective tasks.

Sri Lanka Telecom (SLT) is the market leader in providing telecommunications services and it is the country’s first Fixed Line Operator. With the acquisition of Mobitel in its entirety in October 2002, SLT became the country’s only fully integrated telecommunications service provider to offer Voice, Data and Mobile Services.

Its principal activities include local and international telecommunications services, higher value Broadband and Internet products and services, and communication and IT solutions. In Sri Lanka, SLT serves over more than one million corporate and residential customers, as well as providing network solutions to other licensed operators. SLT vision is “to lead Sri Lanka to become the hub of telecommunications in South Asia” and SLT mission is “to anticipate and fulfill the communications requirements of all sectors of the nation, in a service oriented work ethic which will provide total customer satisfaction through the most modern telecommunications facilities”

A Marketing Plan is a written document that details the actions necessary to achieve a specified marketing objective(s). It can be for a product or service, a brand, or a product line. It can cover one year (referred to as an annual marketing plan), or cover up to 5 years. A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use.

A Strategic marketing plan is an outline of the methods and resources required to achieve organizational goals within a specific target market(s). Strategic planning requires a general marketing orientation rather than a narrow functional orientation.

“Describes the direction [an organization] will pursue within its chosen environment and guides the allocation of resources and effort” – Peter Bennett, Dictionary of Marketing Terms, AMA 1988

For our market survey we have selected Sri Lanka Telecom Ltd. (SLTL). This selection is based on the company’s position in the telecommunication industries. SLTL is only company which can provide total communication solutions to customers.

We have obtained all the information about SLTL through face to face interview with three Sri Lanka Telecom General Managers namely General Manager Sales, Corporate Strategy and Marketing. In addition to this some information were extracted from SLTL intranet site, internal journals, year 2005 annual financial statements, Sri Lanka Telecom corporate web site, some external business journal, magazines and web sites.

Telecommunication industry information also gathered through face to face interview with Mr. R.D.Somasiri, who has more than 20 years of experience in the Telco industry. In addition to this he is a former Telecom Regulatory Commission’s (TRC) chief. In addition to this we reviewed some recent researches which were done recently about Sri Lanka and South Asia telecommunication industry.

Further we referred some business review articles published in the local news papers, web sites etc. We have obtain information from TRC official web sites, other Telco companies web site etc.

4. Task 01

We have selected Sri Lanka Telecom Limited (SLTL) for our survey purpose. Based on our review SLTL company analysis and telecommunication industry analysis are given below.

4.1 Sri Lanka Telecom Corporate profile

Sri Lanka Telecom (SLT) is the market leader in providing telecommunications services and it is the country’s first Fixed Line Operator. With the acquisition of Mobitel in its entirety in October 2002, SLT became the country’s only fully integrated telecommunications service provider to offer Voice, Data and Mobile Services. Its principal activities include local and international telecommunications services, higher value Broadband and Internet products and services, and communication and IT solutions. In Sri Lanka, SLT serves over 954,000 corporate and residential customers with more than one million exchange lines, as well as providing network solutions to other licensed operators.

Sri Lanka Telecom (SLT) is one of the country’s most valuable blue-chip companies with an annual turnover in excess of Rs.30 billion. Today with NTT of Japan as a strategic partner, SLT provides facilities and services to its customers, which are unmatched in scope. The company was also awarded a AAA (sri) rating by Fitch Ratings Lanka followed by a BB international rating by Fitch International and Standard & Poor’s.

a. Sri Lanka Telecom Vision:

“To lead Sri Lanka to become the hub of telecommunications in South Asia”

b. SLTL Mission:

“To anticipate and fulfill the communications requirements of all sectors of the nation, in a service oriented work ethic which will provide total customer satisfaction through the most modern telecommunications facilities”

SLT’s group Strategy is to create value for shareholders through being the best provider of communications services and solutions for everybody in Sri Lanka.

c. Sri Lanka Telecom Ltd. Share holders:

SLT’s Major Shareholders are the government of Sri Lanka, NTT Corporation Japan and the Public. After a successful Initial Public Offering (IPO), SLT became one of the largest listed Companies in the Colombo Stock Exchange.

Table: 4.1 Share holding composition of SLT shares

Share holders Percentage of shares (%)

Government of Sri Lanka 49.50

NTT Corporation Japan 35.20

Employees of SLT 03.30

Public 12.00

Source: Sri Lanka Telecom Corporate web site (www.slt.lk)

For operational & administrative purposes, SLT is divided into 4 regions: Metro, Region I , Region II & Region III.

4.2 Principal Activities

a. Voice Services:

SLT has a communication network that spans the entire country & extends to all parts of the globe. SLT’s major source of revenue is generated by its voice service & in 2005 as much as 68% of the revenue was generated from domestic telephony operations, out of which 60% is from call charges.

b. Data services:

SLT provides data services under the brand name SLTData. The services provided include national & international leased circuits, frame relay solutions and internet leased circuits. Customers include mobile operators, data service operators, internet providers, software developers, banks & other large corporations. SLT’s data circuits have a capacity of 64kbps to 8 Mbps. At the end of 2005., there were 5796 data circuits.

c. Internet Service

SLT’s internet service was launched in 1996 and was re launched in 2000 as SLTNet. As part of this re launch, SLT set up a help desk and lowered its rates. SLT’s Internet marketing strategy is to offer competitive pricing, a high quality of service & high speed access.

SLT has points of presence (POPs) across the country and this allows the subscribers to access the net for the cost of a local call.SLT’s international IP (Internet Protocol) backbone bandwidth is 899 Mbps. SLT currently offers Internet Leased Lines at 64 kbps upto 2 Mbps, client mail service installation, web & DNS Hosting as well as POP internet service.

Internet roaming was introduced in 2000 and this created an interest particularly among those customers who travel frequently. It enables them to use their account while traveling. The roaming service is now available in 150 countries through 15,000 ISP POPs. The Web Mail facility now available in SLTnet web site so that the SLTnet email is accessible all over the world. Web Hosting, DNS Hosting & Top Level Domain Name Registrations are some of the other services the customers have access to. The ADSL will consist of 512kbps & 2Mbps download services along with 128kbps & 512kbps upload speeds respectively. At the end of 2004, there were 8320 ADSL customers.

Revenue composition from above services are given below.

Figure: 4.1 SLT Revenue composition

4.3 Sri Lanka Telecom Market analysis

a. SLT market share as a fixed line operator is given below by way of bar graph. At present only another two players are compete with Sri Lanka Telecom Ltd. They are Suntel and Lanka Bell. Below graph is drawn based on the December 2005 information at Telecommunication Regulatory Commission. This graph clearly shows how the SLT market share is fluctuated over the period of time.

Figure:4.2 SLT Market share among Fixed line operators

b. Now we would like to show what is the market share if we take all fixed and mobile operators together.

Figure: 4.3

Although SLT hold the second place in the total Sri Lanka telecommunication industry, it captured 45% of the total market revenue and the market leader dialog hold only 29%. As per Telecom Regulatory Commission under mobile users they have include prepaid users too but under SLT only fixed lines are taken into account.

In addition to voice line SLT hold more than 80% of the data line and internet market. Further SLT Prepaid card is a another service through which reach the people who are unable bare the telephone cost and budget concuss segments. Sri Lanka Telecom segment the market in the following way.

Figure: 4.4 SLT Customer Segmentation

Individuals Families Professionals Small Business Large & Medium Business

Person who spend less than Rs.1,000.00 as communication expenses. Preferred prepaid solutions and less brand loyalty They can afford to spend Rs.1,000 to Rs.2,500.00. Preferred both prepaid and post paid options. Spend on internet too. Moderate brand loyalty

Spend between Rs.2,500.00 to 5,000.00. Spend less on voice and more on internet. Preferred broad band connectivity. Preferred post paid option. High brand loyalty Businesses which can afford up to Rs.100,000.00. Cost conscious customers. Need post paid option. They need small solutions. Spend on telecommunication more than Rs.100,000.00. They need total solutions, large networks, Large data storage space etc. they look at very efficient, cost effective modern technologies. They wanted inter branch connectivity & communication too.

Sri Lanka Telecom have 64 branches island wide to cater its customers. None of the Sri Lanka Telco has this much of huge customer service outlet in the island. In addition this SLT set up Corporate Sales & SME sales units to cater the medium and large organization segment. Marketing development unit also formed to develop product and services depend on the customer requirements.