Moreover, Telenor has positioned itself as the most innovative mobile network provider on the Pakistani market: more than 95% of the current network has already been upgraded to EDGE today. This opens up further potential for Telenor and secures a competitive advantage with respect to value added services. In the middle of 2008, Telenor acquired the Tameer Microfinance Bank, laying the cornerstone of a structure to address the Pakistani market with respect to financial services, e.g., the awarding of microloans by text message. With respect to innovation and value added services, Telenor Pakistan clearly benefits from the know-how of the parent company, which focuses strategically on delivering broadband services. When 3G licenses are awarded in Pakistan at the end of 2009 (according to the latest information), Telenor has already announced that it intends to invest another USD 500 million in the network, which has been planned as compatible.
The high quality standard in conjunction with the simultaneous fast installation of the network enabled Telenor to attract the higher-income segments of the mass market as subscribers. This aided Telenor in its rise to the position of the second-largest provider in terms of turnover generation on the Pakistani market and in achieving above-average ARPU figures.
Moreover, Telenor’s clientele has grown to more than 18 million customers and, after a tough competitive fight, the company has clearly overtaken Warid Telekom in new customers since the third quarter of 2006 and with respect to market share as well since the beginning of 2007. By pursuing this strategy, Telenor succeeded in posting figures in the black for the first time in the first quarter of 2007 and has achieved positive EBITDA values since then (USD 41 million in the second quarter of 2008).
Telenor’s strategic orientation and the subsequent rapid expansion of the network due to an unquestioned willingness to invest, coupled with aggressive marketing, has made Telenor Pakistan a success story among market latecomers. Telenor Pakistan did not become entangled in a price war; instead, it successfully positioned itself as a quality provider and was consequently able to achieve high ARPUs.
Acquiring customers on the basis of a clear strategy utilizing the company’s own strengths
If we compare the market entry strategies of Astelit in the Ukraine and Telenor in Pakistan, we can discern similarities in the form of the success factor of a fast network installation. Both of these latecomers received the financial support required for this fast buildup from their respective shareholders. Major differences in the market entry strategies are revealed in the market positioning (see Figures 1 and 2):
)
