PESTEL

Analysis

Telenor Group
A Brief Overview of the Business Sector:

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 40
million. For the reason different companies are being attracted to invest heavily in this
division.
Due to the enormous competition among different companies of both services 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
fragment. Currently there are five major companies operating in Pakistan, Mobilink
(www.mobilinkgsm.com), Ufone (www.ufone.com),
Telenor (www.telenor.com),and Warid (www.waridtel.com).
According to PTA (Pakistan Telecom Authority)
telecom companies are going to invest more than USD 2.4 billion just in infrastructure
and Mobilink alone are investing around USD 831 million in next three years. Similarly
Telenor and Warid, the newly licensed operators are investing around USD 495 million
and USD 325 million respectively during 2005-07 in addition to the license fees. Telenor
in next 5 years is going to invest approximately USD 1 billion in Pakistan. (Sargana
2005)
EX Minister for information technology, Awais 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. (The News 2006) 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)

Lets comes to the PESTEL Analysis following are the attributes where the telenor
have been working in order to improve there business strategies more efficiently.

Political

In the context of the political stability: telenor grouuup is working on the

continous building approach.
Taking about in the contaxt of the subcontinent the political conditions are the well
established due to the
Democratic Government holding
Judiciary strengthening
Increased media freedom.

Taxation Policy:_

The mobile sector in Bangladesh contributed a total of BDT 260 billion to the economy
in 2007, representing 6.2% of total GDP.
This is an increase of over 250% since 2004 and represents 2.1% of total GDP. Deloitte
estimates that the mobile communications industry contributed over BDT 91 billion of
value add to the domestic economy in 2007, up from BDT 28 billion in 2004. When the
impact of the economy wide multiplier is included, the value contribution in 2007 was
BDT 128 billion up from BDT 39 billion in 2004. Of this value-add, the largest
contributors are taxes and regulatory fees (68%). The rest is made up of wages, dividends
and expenditures on corporate responsibility (CR).

Foreign Trade Regulation:_

Regulatory uncertainty reduces investment. Governments and regulators must ensure that
a high quality regulatory regime is in place, i.e. put in place clear and credible long-term
plans, a pro-investment, pro-competition regime and a supportive environment for the
entire Internet eco-system.

Economics Factors

Economy (pre–flood)
Real GDP growth 2010 – 4.1%
as a core source of FDI, by contributing to GDP, and by creating an infrastructure that
allows the economy to develop further.
An increase of 10 per cent in mobile penetration will boost the annual economic growth
rate of a developing country by 1.2 per cent.
If the proportion of people with a mobile phone in a country whose economic growth rate
is 4 per cent a year rises from 10 per cent to 20 per cent, it would boost the economic
growth rate of that country to 5.2 per cent a year.

A regression is estimated for almost 60 developing countries in

the Asia Pacifi c region, Africa and Latin America. For this sample,
Deloitte estimates that a 10% increase in penetration could
increase the GDP growth rate of 1.2% . The coeffi cient on average
Mobile penetration is approximately twice as large as the 0.59%
increase in GDP found by Waverman, Meschi and Fuss (2005).
In developing countries, fi xed
phones have often never reached a suffi ciently high penetration
to generate a signifi cant network effect.

The use of mobile phones on the other hand, is continuously expanding and can therefore
be
expected to play the same crucial role for the economic development
that fi xed phones had for developed countries.

Contribution to employment:
Mobile services contribute to employment through several
channels:
Direct employment of the industry and related industries;
Support employment crated by outsourced work and taxes
that the government subsequently spends on employment
generating activities; and
• Induced employment resulting from the above employees
and benefi ciaries spending their earnings, and creating
more employment.

more than 111,790 jobs have been created by the mobile industry in Bangladesh to date.
In Malaysia, employment in related industries (indirect employment) constitutes a large
proportion of the employment created by the mobile industry.
more than 247,000 jobs have been created by the industry to date in Pakistan.
• 94,000 new jobs in Serbia
• 129,000 new jobs in Bangladesh
• 114,000 new jobs in Thailand

Increased Internet penetration has the potential to generate significant economic benefits:
In terms of overall GDP contribution in 2020, the Internet is expected to contribute:
• 2.6 percent in Bangladesh
• 3.8 in Thailand
• 5.2 in Serbia

Important social gains:_

Across all three countries, the Internet is an important infrastructural backbone. Access
can improve a number of social areas, chiefly education, health care and rural
development, for example:
• Education: In remote places, Internet-based self-learning initiatives may supplement
conventional forms of education.
• Health care: In developing countries, where shortage of doctors is a key constraint,
webcams, real-time communication via computers can facilitate health services to more
people and increase the number of patients a physician can serve.
• The Internet can also be a valuable instrument in tracking of disease outbreaks and in
emergency response situations. As well the contribution to economic and social welfare,
for instance through connecting people in remote areas to basic utilities such as banking
and health care, and by making it easier for people to communicate with friends and
family in distant locations.

Technological:

In all the six markets, access to mobile communications can improve information flows,
increase work flexibility, and promote business in previously underserved rural areas.
The Deloitte study found that the annual productivity increase in the six countries ranged
from 6 per cent to 10 per cent.

New Discoveries:

Telenor
• Distribution network
• Marketing and product management

Tameer Microfinance Bank

• License for branchless banking
• Regulated by State Bank of Pakistan

Legal:

Telenor group has provide the product safty awareness to become more stronger in the
industry. These include the new ways to introduced for securing the customers.
• Insurance
• Bill payment
• Mobile top up
• Salary disbursement
• Corporate payments