PROJECT REPORT

ON

Zong

By

Muhammad Sajid Taj Class No. 203

BBA (Hons) (FINANCE) Session 2007-2010

INSTITUTE OF BUSINESS MANAGEMENT SCIENCES KHYBER PAKHTUNKHWA AGRICULTURAL

UNIVERSITY PESHAWAR-PAKISTAN

Muhammad Sajid Taj Class No. 203

BBA (Hons) (FINANCE) Session 2007-2010

A project report submitted to the IBMS, Khyber Pakhtunkhwa Agricultural University, Peshawar in partial fulfillment of the requirement for the degree of

BECHLORS OF BUSINESS ADMINISTRATION (FINANCE)

Approved by:

___________________________ (Advisor)Mr. Shams ur RehmanLecturer

___________________________ (Co-Advisor)Mr. Haroon Marwat Lecturer

___________________________ (Co-Advisor)Mr. Zeeshan Kattak Lecturer

___________________________ (Head of Management Sciences)Mr. Mohammad Fayaz

___________________________ (Director)Dr. Farzand Ali Jan

INSTITUTE OF BUSINESS MANAGEMENT SCIENCES KHYBER PAKHTUNKHWA AGRICULTURAL

UNIVERSITY PESHAWAR

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PREFACE

It is an academic requirement for a student of Bachelor in Business Administration to

undergo an internship program of eight weeks duration. This requirement provides

with an opportunity to acquaint the student of BBA (H) with practical working of an

organization.

I selected Telecom Sector, Zong CM Pakistan, And Main Branch Islamabad Blue

Area for my internship report. During my work, I was rotated in different departments

of Zong Main Branch Islamabad and got some understanding of their operations and

procedures.

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ACKNOWLEDGEMENT

I am very thankful to all the Zong CM Pakistan staff at main branch Islamabad, who

supported me on every step & guided me in routine transactions. Special thanks to

Mr. Zahid Anwar (Regional Manager North Region) who helped me a lot in gathering

data about Zong CM Pakistan. I say thanks to all those who supported me in preparing

this internship report & provided me assistance at crucial times. I am also very

thankful to Mr Asmar Shah & Naeem Shah for his guidance & assistance during repor

preparation.

I am also very thanked full to my adviser Shams-ur-Rehman and my Co-advisers

Haroon Marwat and Zeeshan Khattak.

Muhammad Sajid Taj

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TABLE OF CONTENTS

TABLE OF CONTENTS.....................................................................................5

Executive Summary...........................................................................................8

CHAPTER 1......................................................................................................9

INTRODUCTION...............................................................................................9

1.1 Telecom Sector of Pakistan......................................................................................9

1.2 About China Mobile Pakistan (CMPak) .................................................................9

1.3 About ZONG .........................................................................................................10

1.4 Commitment to Customer Satisfaction..................................................................10

1.5 Passion for Business Excellence............................................................................10

1.6 Trust and Integrity..................................................................................................11

1.7 Respect for People..................................................................................................11

1.8 Responsible Corporate Citizen...............................................................................11

CHAPTER 2.................................................................................................................12

Product and Services...................................................................................................12

2.1 Post paid ................................................................................................................12

2.2 Prepaid ...................................................................................................................12

2.3 ZONG 65 Package.....................................................................................132.4 ZONG Free Package..................................................................................132.5 ZONG 12 Anny Package............................................................................132.6 ZONG Z20 Package...................................................................................132.7 ZONG Aik Second Package.......................................................................13

2.8 Other Services and Offers .....................................................................................14

2.9 Break Time Offer (BTO)............................................................................152.10 Late Night Offer (LNO)...........................................................................15CHAPTER 3.....................................................................................................163.1 Location Base Charging (LBC)..................................................................163.2 Friends and Family (FNF)..........................................................................163.3 Happy Hour................................................................................................163.4 Super Free Number....................................................................................163.5 Conference Call..........................................................................................163.6 SMS Packages............................................................................................163.7 GPRS Packages..........................................................................................173.8 Ramzan Value Time Offer.........................................................................173.9 E-Care ........................................................................................................17

CHAPTER 4 ...................................................................................................20

BUSINESS OPERATIONS..............................................................................20

4.1 SWOT Analysis of ZONG Customer Service Center............................................20

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4.2 Strengths of ZONG Customer Service Center.......................................................20

4.3 Weaknesses of ZONG Customer Service Center...................................................21

4.4 Opportunities of ZONG Customer Service Center................................................21

4.5 Threats of ZONG Customer Service Center..........................................................21

4.6 SIM Replacement.......................................................................................224.6 ZONG Intranet.......................................................................................................22

4.7 Knowledge Base System (KBS)............................................................................22

4.8 CRM System..........................................................................................................23

CHAPTER 5

COMPANY ANALYSIS....................................................................................25

Network........................................................................................................................25

Operational Departments..............................................................................................26

Subscribers and Market Share......................................................................................27

5.3 Financial Analysis..................................................................................................28

Operational Results......................................................................................................28

Balance Sheet Results..................................................................................................29

5.4 Ratio Analysis........................................................................................................30

Current Ratio....................................................................................................305.5 Fixed Assets Turnover...............................................................................305.6 Debt Ratio..................................................................................................30Return on Common Equity..............................................................................31

5.7 Human Resource Assessment................................................................................31

CHAPTER 6.....................................................................................................33CONCLUSIONS AND RECOMMENDATIONS...........................................33

Bibliography.....................................................................................................36

Web Resources.............................................................................................................36

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List of Tables

Table 2.1 SMS Packages 17

Table 2.2 Structure of CSC Islamabad 21

Table 2.3 Overview of Zong Network 24

Table 2.4 Number of Zong Subscribers 24

Table 2.5 Zong Market Share 25

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Executive Summary

This report consists of three chapters. In first chapter I talked about all the telecom

companies in Pakistan. After the introduction of telecom sector of Pakistan I

introduce China Mobile Pakistan (CMPak). And also a little bit introduction of

ZONG. Than I talk about mission and vision of ZONG. Its core values are also a part

of this chapter. I also mention the competitors which are competing with ZONG. And

after that I talked about mission of the customer service centers and a brief

introduction of Customer Service Center of Islamabad. I also talked about the

products and services of ZONG that ZONG offer to its customers and explain the

packages and other special and exciting offers of ZONG in this chapter. In second

chapter of this report organizational structure and the structure of CSC Islamabad is

shown I also do SWOT analysis of Customer Service Center of Islamabad in this

chapter. Marketing strategy of ZONG and competitive strategy of ZONG also

included in this chapter. Business processes are also included in this chapter. I also

briefly discuses about ZONG intranet, Knowledge base system, complaint

management system, CRM system and business process management. In the last

chapter of the report I have written all my working which I had done during my

internship. Also write down about task which was assigned to me. I also discussed

about accomplishments, new knowledge which I had acquired during my internship.

Problems which were encountered in doing work and how this experience impact my

career? I also discussed in this chapter.

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CHAPTER 1

INTRODUCTION

This chapter is all about introduction of ZONG and CSC Islamabad. This chapter

consists of nine parts. First, I have offered introduction of telecom sector of Pakistan

and China Mobile Pakistan (CMpak). Than a little bit introduction of ZONG. After

that I come to tell about ZONG’s vision and mission and core values. Products and

services which ZONG is offering to its customers are also included in this chapter.

1.1 Telecom Sector of Pakistan

Pakistan mobile industry at the moment is experiencing growth explosion. Though the

existing players are trying hard to meet the growing demand still there is a huge

amount of unmet demand in the country as against the supply of connection by the

operating mobile companies.

Currently there are five mobile operators operating in Pakistan, Which are:

Mobilink

Ufone

Warid

ZONG

Telenor

1.2 About China Mobile Pakistan (CMPak)

China Mobile Pakistan (CMPak) is 100% subsidiary of China Mobile. The pioneering

overseas setup of China Mobile came through acquisition of license from Millicom to

operate a GSM network in Pakistan. So far CMPak has invested more than US$ 1500

million in telecom sector in Pakistan till the end of year 2008. With ambitious plans to

cater to the fastest growing Pakistani market and win over the demanding Pakistani

customer, it will be offering unprecedented coverage, voice and data services as well

as wide range of tariff options to choose from. CMPak’s edge comes from the

experience and expertise of running the world’s largest telecom service and the

commitment they make to setting quality and customer relation standards. CMPak is

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geared to offer neatly packed VAS product that will benefit the individuals, cooperate

as well as small business. Led by a team of professionals from the field of cellular

Communication, CMPak is determined to make its mark in Pakistani market and

change the way people communicate.

1.3 About ZONG

Recently China Mobile Company in Pakistan after replacing the code 0304 with 0314

now introduced its new brand called “ZONG” formally “paktel”. With introductory

slogan “Say everything” or “Sub Kah Do” and started its advertising campaign at

popular print and electronic media outlets. ZONG is the first international brand of

China Mobile being launched in Pakistan. The company often cited as China Mobile

Pakistan. It meant to empower and liberate the people of Pakistan in every nook and

corner of country. It will become a part of their hearts, their minds and bring about a

change in their lives that every one desired but few thought would be possible. The

core essence of ZONG is to allow people to communicate at will. Without worrying

about tariffs, network coverage, capacity issues or congestion. ZONG will be

supported by ground breaking communications, trend setting customer service and

unmatched product offering which will refine rules of game and establish ZONG as a

serious contender for number one spot. ZONG would offer its customers with

entertaining and innovative VAS and will empower them by giving a wide verity of

products, services and content to choose from. We are privileged to be the pioneering

country introducing this brand with others to follow. And GOD willing, together we

will also make ZONG a success story for others to try and replicate.

1.4 Commitment to Customer Satisfaction

Customers are the heart of our success. Customers placed their confidence and trust

on ZONG. In return, ZONG will make sure to anticipate customer’s needs and deliver

and deliver services, quality and value beyond their expectations.

1.5 Passion for Business Excellence

ZONG try for excellence in all that the do. This commitment to delivering world-class

quality translates to unmatched service and value for our customers and all stake

holders.

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1.6 Trust and Integrity

ZONG take pride in practicing the highest ethical standards in an open and honest

environment. ZONG take personal responsibility for their actions and treat everyone

fairly, and with trust and respect.

1.7 Respect for People

ZONG’s relationship drives their business. ZONG respect and esteem their employees

and all stakeholders. ZONG believe in team work empowerment and honor.

1.8 Responsible Corporate Citizen

As the market leader, ZONG recognize and fulfill its responsibility towards our

country and the environment we live in. ZONG contribute to worthy causes and are

dedicated to the development and progress of society.

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CHAPTER 2

Product and Services

ZONG offers a wide range of new services to serve customers even better. Below is a

brief introduction of all these services.

Postpaid

Prepaid

Other services and offers

2.1 Post paid

Exciting news for ZONG,s postpaid customers, ZONG has introduced some new

postpaid packages and may be the most feature rich in market. Now, ZONG’s

postpaid packages comes with the free mins on-net and off-net, and also unlimited

SMS, 15 MB of free GPRS quota and many more. Packages are given below:

100 Line rent package

300 Line rent package

600 Line rent package

1200 Line rent package

2000 Line rent package

If customer comes to purchase postpaid SIM than he can avail packages which are

given above. On post paid SIM there is no default package customer will select any of

the above packages according to his need and deposit line rent according to the

package and package will be changed.

2.2 Prepaid

When a customer purchase a prepaid SIM its default package is 80 piasa per 30

second but customer can avail any of the following packages:

ZONG 65 package

ZONG free package

ZONG 12 anny package

ZONG Z20 package

ZONG aik second package

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2.3 ZONG 65 Package

ZONG 65 package offers its customer:

ZONG 65 offers call rate of 65 paisa per 30 second any time any network

2.4 ZONG Free Package

ZONG free package offers its customer:

For the first time in Pakistan you can make free calls for life!

Choose one favorite ZONG number and call from mid night to 7am-absolutly

free!

During break time hours call all ZONG numbers at Rs.3.99 per hour from

noon to 2 pm.

Now you can call up to 10 FNF numbers.

The free number can be modified once in a month.

2.5 ZONG 12 Anny Package

ZONG 12 anny package offers its customer:

Call or SMS for only 75 paisa to any network and any time!

30 second billing.

Talk for an entire hour of your liking-any hour, for only Rs. 4.99 and for first

time in Pakistan you can change the hour every day!

Happy hour needs to be activated by customer; every action/modification will

be charged at Rs. 5.

FNF rate apply for 24 hours, for those customers who have subscribed for

happy hour, FNF rates will not be applicable during that hour.

2.6 ZONG Z20 Package

The concept of behind this package is to promote the value of time and the

importance of “choti but zaroori baat”.

2.7 ZONG Aik Second Package

ZONG aik second package its customer:

Per second billing.

Make call for just 4 paisa per second any network any time!

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Call five FNF numbers for just 2 paisa per second.

2.8 Other Services and Offers

ZONG has always provided its customer with the best offers and services some of

them are given below:

BTO

LNO

LBC

FNF

Happy hour

GPRS packages

Ramzan value time offer

E-care

Missed call alert

Dial tune

ZONG Mobile offer

Black Berry special discount offer

Call forwarding

BYN

Call waiting

ZONG bijli offer

ZONG fone on hai offer

ZONG family pack

Voice bundle

Achi SIM

Bara recharge

Block unwanted call and SMS

MNP

Mobile Music channel

Unlimited free number

ZONG weekly infotainment

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SEP

2.9 Break Time Offer (BTO)

ZONG offers Break time offer now call on any ZONG number at Rs.3.99 from noon

to 2 pm, and on Friday from noon to 4 pm. This offer is on ZONG free package.

2.10 Late Night Offer (LNO)

ZONG offers late night offer now add call from mid night to 7 am @ Rs. 3.99 per

hour. This offer is on ZONG free package.

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CHAPTER 3

VALUE ADDED SERVICES

3.1 Location Base Charging (LBC)

ZONG has always provided its customer with the best offers and services and in

continuation of efforts ZONG now brings LBC. LBC is in more than 40 cities through

which the customer can enjoy free ZONG to ZONG calls @ only Rs. 7+tax per day.

3.2 Friends and Family (FNF)

ZONG brings special rates for your friends and family members add FNF numbers in

almost all prepaid and postpaid packages.

3.3 Happy Hour

ZONG brigs happy hour talk for an entire hour of your liking-any hour, for only Rs.

4.99 and for first time in Pakistan you can change the hour every day.

3.4 Super Free Number

ZONGS gives you an opportunity to talk to one number free whole month @ 499 Rs.

+tax.

3.5 Conference Call

Now five members can talk to each other at one time ZONG brings to you conference

call service. Now activated on all prepaid and postpaid numbers.

3.6 SMS Packages

ZONG now introduces its newest and most competitive SMS bundle @ Rs. 2.5 plus

tax daily. New unlimited SMS bundle Offers:

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Table 1.1:

Packages SMS Limit PriceDaily SMS bundle 500 SMS 100 MMS per day 1 day 3.99+taxWeekly SMS bundle 1000 SMS 7 days 10+taxFortnightly SMS bundle 500 SMS per day 15 days 50+taxMonthly SMS bundle 500 SMS per day 30 days 80+tax

3.7 GPRS Packages

Please be updated that now ZONG have a new and exciting GPRS packages for

ZONG customers.

Packages are as fellows:

Hourly package(Time Based Package)

Monthly packages- for prepaid user

o 2 GB bundle

o 4 GB bundle

o Truly unlimited

3.8 Ramzan Value Time Offer

By subscribing to ZONG’s ramzan value time offer, all ZONG customers can avail

lowest call rates from 1st – 29th ramzan.

By subscribing to ZONG’s ramzan value time offer, all ZONG customers can avail on

net call rates of 2.99/hour.

3.9 E-Care

No need to walk into a Customer Support Center or make a call to get such

modifications done. Our customers now have this facility in the comfort of their

homes and offices. Through Prepaid eCare, customers can enjoy the following

features online:

Web Portal Activation / Subscription for:

SMS bundle

GPRS

Call/SMS Block

FnF

BYN

Queries like:

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Customer information query

Recharge history

Call record

Change requests like:

Package change

Change FnF

Change call forwarding

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CHAPTER 4

BUSINESS OPERATIONS

Second chapter of this report is devoted to the business operations of ZONG. In this

chapter first departmental structure of ZONG CSC department is discussed and also

structure of CSC islamabad also describe in this chapter. I also offer SWOT analysis

of ZONG CSC islamabad. Marketing and competitive strategy is also offered in this

chapter. In the end of this chapter business operations of CSC islamabad are

discussed.

4.1 SWOT Analysis of ZONG Customer Service Center

The SWOT analysis covers strengths, weakness, opportunities and threats. Strengths

and weakness are generally internal attributes. Opportunities and threats are generally

external attributes. So, SWOT analysis of CSC Islamabad is given below:

4.2 Strengths of ZONG Customer Service Center

Strengths are defined as any activity the organization does well or any unique

resources the organization has. Some strengths of ZONG Customer Service Center are

given below:

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All the products and services which ZONG is offering are available here in

this CSC of Peshawar. And also all the services of ZONG are activated and

deactivated here.

Motivated, educated and qualified staff makes services more reliable and

satisfy customers.

4.3 Weaknesses of ZONG Customer Service Center

Weaknesses are defined as any activity the organization does not do well or the

resources the organization needs but it does not posses. According to my point of

view following are the some weaknesses of ZONG Customer Service Center:

Number of CSR is not sufficient here in CSC Sahiwal, customer some time

should have to wait for their turn a bit.

The staff of CSC is not involved in more outdoor activities.

4.4 Opportunities of ZONG Customer Service Center

Opportunities are defined as positive trend of organization in external environment.

According to my point of view following are the some opportunities of ZONG

Customer Service Center:

Sales of this CSC can be increased if more and more outdoor activities

(establish stall outside like in market or anywhere) are being done by the

management of this CSC.

SEs are very good for this CSC because customer get information on the go.

4.5 Threats of ZONG Customer Service Center

Threats are defined as the negative trends of organization in environment.

According to my point of view following are the some threats of ZONG Customer

Service Center:

Competitors are the biggest threat for any company. Here also exist Warid,

Ufone and Telenor’s CSCs so they are biggest threat for ZONG CSC.

Policies of TMA are also some time threatening when they are on outdoor

activity. When staff of CSC Islamabad wants to do outdoor activity it must

have to get NOC from TMA Islamabad and TMA Islamabad has its own

limitations.

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Another threat is that according to PTA rules any one can switch to other

mobile network which they think are reliable and due to signal problem and

call drop complains customers are leaving ZONG.

4.6 SIM Replacement

Customer walks in to replace his/her SIM following are the required steps to follow:

CSR will verify the customer as per verification parameters.

CSR will inform the customer about SIM replacement charges (if any).

CSR will fill CSF and get it signed by the customer and attaches a copy of

CNIC.

CSR will process the SIM replacement in BOSS.

CSR will hand over the customer copy and finance copy to customer and

guide customer to cash counter.

Cashier will get CSF copies and payment from customer.

Cashier will record transition in BOSS.

Cashier will hand over SIM and payment receipt to customer.

CSR will CSF to data warehouse for filling.

4.6 ZONG Intranet

ZONG intranet is software program which have each and everything in it about

ZONG. And this can be opened only in the arena of CSS. Loaded with everything this

is very useful thing for CSR and other employee.

4.7 Knowledge Base System (KBS)

This is also software program which is loaded with all the activities and other

information like:

Products and services

Basic VAS

New VAS

Retailer information

789 activation and deactivation SIM

668 campaign

Office timings

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And many more.

4.8 CRM System

CRM system where from CSR can login the system and do his work or duties.

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CHAPTER 5

COMPANY ANALYSIS

Network

Zong was awarded a 15-year license in July 2007 to establish and operate a digital

cellular telecommunication system using the GSM 900 standard and to offer

telecommunication services in Pakistan. Before that, all previous operations were

using the AMPS technology. Since then Zong has been growing its network,

providing 2G, 2.5G, GPRS and EDGE compatibility. Zong was the first operator to

start rolling out the Enhanced Data Rates for Global Evolution (”EDGE”) in Pakistan.

In addition, Zong also launched its BlackBerry service in December 2005 through its

GPRS platform. Furthermore, Zong’s license was renewed on July 6th, 2007 for a

further period of 15 years.

Zong is committed in providing the best network to their customers, which in recent

times has expanded to more than 9000 cities and reaches over 66% of the total

population and 99% of the urban population as of December 31st, 2007.

Table 1: An Overview of Zong’s Network

Cities 9000+

Investment USD 1 Billion+

Switches 63

Cell sites 6300

Optical cable development 5,000 KM

Switches Nokia, Siemens, Alkatel, Huwai

Radio based stations Motorola and Alkatel

Intelligent networks Siemens

Microwave equipments NEC/ALKATEL

Operating frequency 900/1800 MHZ

SMSC Logical CMG

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Not only is Zong’s network very modern and technologically advance, but it is also

very competitive, when compared to other mobile networks.

Operational Departments

Zong is headed by President and CEO Zouhair A. Khaliq, who reports directly to the

Chairman and CEO of Orascom Telecom Naguib Sawiris. Furthermore the operations

of Zong are divided into eight different departments, which are as follows:

1. Human Resource

2. Administration and Security

3. Sales

4. Marketing

5. Customer Services

6. Corporate Affairs

7. Technical

8. Finance

Furthermore, these departments are further divided into sub departments to ease

operations within Zong. Also all major decisions are taken centrally, in Islamabad.

These decisions for example include, the financing required by Zong (local and

foreign), decisions regarding import of goods etc.

Furthermore, to assist the operations of Zong, which include more than 500 franchises

and 16 Customer Services Center’s, operational departments are located in all the four

main regions:

1. North

2. South

3. Central

4. AJK

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Subscribers and Market Share

Zong had a great advantage for years as being the only GSM mobile operator in

Pakistan, however with the entrance of Ufone in 2001 and later on by Telenor, Warid

and Zong, the competition in the mobile sector is heating up. However the subscriber

base Zong has remained steady and growing as seen in the table below:

Table 2: Number of Zong Subscribers from 2008-July 2009

Although the number of subscribers has increased over the years, the same cannot be

said about the market share of Zong, which has gradually decreased over the year.

However, although

the market shares of Zong might have decreased over the years, but it still remains the

market leader in the mobile sector. The market shares of Zong are as follows:

Year 2007 July-2008

Subscribers 26,466,451 32,056,336% Change 53.8 21.1

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5.3 Financial Analysis

No company can remain in business if it cannot sustain and grow its profits and

telecom companies are no exemption. If Zong wants to remain the market leader in

the mobile industry and wants to satisfy its customers, it itself needs to remain a

profitable company.

Zong is a private limited company and due to this reason, its financial statements are

not made public. However it does provide its financial information to different

financial institutions and companies that have invested in Zong, examples include

companies that have bought TFC’s issued by Zong

An extract of the Balance Sheet and Income Statement for the year 2007, can be seen

in the appendix.

Operational Results

Table 3: Profit Comparison between 2007 & 2008

Description December 2007 December 2008 In Pak Rupees

Revenue 70,914,424,384 55,871,865,120Profit Before Taxation 6,976,257,786 7,372,726,009Profit After Taxation 4,151,660,417 4,100,392,601

Interpretations

As major portion of Zong is on prepaid basis, including SIM sales, securities and

balance recharges the revenues for Zong have increased from December 2007 to

December 2008, this increase is because of the large increase in the consumer base of

Zong in 2007. The increase in revenue has led to an increase in the profit before

interest and tax, and although the costs of services and selling and administrative

charges in 2007 have increased from the past year, the increased revenue helped in off

setting the increase in the expenses.

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Another problem in the profit and loss statement of Zong is the increased financial

charges or interest charges for the 2007. In the mid of 2008, Zong issued a TFC more

than Rs 3 billion, and the interest of which is paid semi annually. Furthermore, most

of Zong’s growth is financed through long term loans, which have also increased in

2007, increased the financial charges.

The increase in financial charges and provision of taxes in 2008, ultimately lead to

profit after taxation, which when compared to the profit of 2007, to not increase by

much. The increase is only 1.25% from the previous year.

Balance Sheet Results

Table 4: Balance Sheet Comparison between 2008 & 2007

Description December 2007 December 2008 In Pak Rupees

Fixed Assets 138,159,488,742 104,896,145,585Current Assets 16,313,779,738 18,193,085,605Current Liabilities 51,742,026,278 50,934,936,367Shareholders Equity 23,523,324,157 16,329,320,280Long Term Liabilities 79,207,928,045 55,824,974,543

Interpretations

As the above table shows, there has been a significant increase in the fixed assets of

Zong in 2007; this has been due to the increase in the property, plant and equipment,

long term deposits and other receivables and license fee. However, the current assets

have decreased, but not by much. This small decrease is mainly due to the decrease in

stocks in trade.

The current liabilities have also increased in 2007, again by not by much. This

increase in current liabilities is associated with the increase in short term financing

and the current portion of long term financing.

The increase in shareholders equity is associated with the increase in the shareholders

equity and the increase in the accumulated profits, while the increase in the long term

liabilities is associated with the large increase in long term financing and the license

fee payable, which was made due, to the renewal of Zong’s license.

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5.4 Ratio Analysis

Current Ratio

Table 5: Current Ratio Comparison between 2006 & 2007

2008 20070.31:1 0.35:1

Current ratio is a liquidity ratio that measures how easily a company can pay off its

current liabilities using its current assets. For Zong although most of its revenues are

on a prepaid basis but still the current assets fall short to pay off the current liabilities

in both 2007 and 2008. Furthermore the current ratio has fallen in 2008, which again

shows that there aren’t enough liquid assets to pay off the current liabilities and may

affect Zong’s solvency in the short term.

5.5 Fixed Assets Turnover

Fixed Asset Turnover, an asset management ratio, shows how effectively a company

uses its fixed assets. That is using its assets to generate sales. Most of Zong’s assets

are fixed, major of which include cell sites and other equipment. As the figures show,

the ratio has decreased in 2007, from 0.53 to 0.51.

Although the decrease is very small, the major reasons associated are the large

increase in the fixed assets and the small increase in sales. The fixed assets rose by

29.3%, while the revenue rose by 26.3%. The major reason for the small increase in

the sales could be associated to the rather small increase in the total subscribers in

2008, as compared to 2007.

2008 20070.51 0.53Table 6: Fixed Assets Turnover Comparison between 2007 & 2008

5.6 Debt Ratio

2008 200784.7% 86.7%

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Table 7: Debt Ratio Comparison between 2007 & 2008

The Debt Ratio measures the percentage of funds provided by sources other than

equity. For zong, most of its growth is funded through long and short term financing,

and even though zong has expanded its operations during 2007, but still the debt ratio

fell in 2007, but only by 2%, which is mainly because of the large increase in the total

assets, when compared to long term liabilities. The rise and fall of current liabilities

and currents assets respectively is not much.

Return on Common Equity

Table 8: Return on Common Equity Comparison between 2007 & 2008

2008 200717.6% 15.1%

Return on common equity, a profitability ratio, measures the extent to which the

shareholders of a company are getting returns on their investments. The ratio for Zong

has decreased significantly in 2008, a decrease of 7.5%. This decrease can be

associated to the small income available to the shareholder. Most of the net income

has to be paid out in financial charges, which leaves less or the shareholders, which in

2008, expanded their investment in the company.

5.7 Human Resource Assessment

Zong, the largest cellular company of Pakistan, is made of a team of over 4500 of

unique individuals. They are the best minds in the industry today, being exposed to

the best practices and an enabling environment.

Employees at Zong are treated as a big family, where their growth is as important as

Zong’s. Capability building programs equip employees with all the skills and

techniques needed for them to realize their ambitions, while diversity and wellness

initiatives help employee’s further reach new heights and achieve their goals.

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Zong’s hiring takes place through its website which is being powered with a

partnership with Rozee.pk, one of Pakistan’s premier website. This website provides

updated information on job openings, as and when they happen. Furthermore the

website is divided into three sections, all providing information accordingly:

• Internship Candidates

• Entry Level Candidates

• Experienced Candidates

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CHAPTER 6

CONCLUSIONS AND RECOMMENDATIONS

6.1 CONCLUSIONS

The current ratio of Zong is below 1, which means that if it is liquidate in the

short run than it will not be able to pay its current liabilities.

In the first three years there is a negative trend in the cash ratio and the best

ratio is for year 2007 i-e 0.35 In 2008 it again show negative trend and the ratio

fall to 0.31.

The debt to assets ratio Zong for 2007-2008 is very high which ranges from

0.86 to 0.84. Such a high debt to assets ratio makes creditors reluctant to lend

their money.

The Total assets turnover has shown negative trend from 2007 i-e from .53

while in 2008 it has fallen to .51. The fall in the ratio shows that the

administration has not been working properly and the authority needs to

concentrate on the management.

The Return on Assets/ Investment is negative from 2007 to 2008, any how it

shows improvement and in 2008 its value is 0.69 which shows that the assets

are utilized more efficiently and effectively as compared to the previous years.

Return on Equity for the first year of analysis is negative but in 2008 the ratio

is 17.4 which is a good sign for share holders.

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6.2 RECOMMENDATIONS

The quality of the current ratio can be affected through increasing accounts

receivable turnover ratio which is very low. It will increase current assets and

hence current liabilities will be easily dealt.

Cash ratio can be improved by recovering the lended cash. Also selling the

worn- out and idle assets will improve the cash ratio.

The debt to assets ratio can be decreased by issuing more shares and

increasing capital

Total assets turnover can be increased by improving the administration by

training, seminars, workshops, technological developments and research etc.

Return on Assets/Investment has shown improvement however it can be

increased by improving supervision and skill of the employees so that assets

are properly utilized and misuse of the assets can be prevented.

A/R turnover ratio can be increased by improving the terms and conditions for

the repayment of accounts receivables.

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Glossary

VAS: Value Added Service

CSC: Customer Service Center

UAE: United Arab Emirate

FNF: Friends and Family

MB: Mega Byte

BTO: Break Time Offer

LNO: Late Night Offer

LBC: Location Base Charging

SMS: Short Message Service

GPRS: General Pocket Radio Service

BYN: Book Your Number

MNP: Mobile Number Portability

SEP: Student Entrepreneur Program

GB: Giga Byte

NP: Non-Personal

MMS: Multi-Media Messaging Service

ATM: Automated Tele Machine

CSR: Customer Service Representative

CNIC: Computerized National Identity Card

CSAF: Cellular Service Agreement Form

CSF: Cellular Service Form

CRM: Customer Relationship Management

SIM: Subscriber Identity Module

IMEI: International Mobile Equipment Identity

NADRA: National Database Registration Authority

MSISDN: Dial able Number that Caller Use to reach a mobile subscriber

35

Bibliography

Web Resources

• Wikipedia (wikipedia.com)

Articles used:

o Mobilink

o Ufone

o Telenor Pakistan

o Warid Telecom (Pakistan)

o China Mobile (Pakistan)

• Mobilink (mobilinkgsm.com)

• Pakistan Telecommunication Authority (pta.gov.pk)

• Ufone (ufone.com)

• Telenor (telenor.com.pk)

• Warid (waridtel.com)

• Zong (zong.com.pk)

• Orascom Telecom (otelecom.com)

• The News (thenews.com.pk)

• PTA website

• Zong CEO speaks about 2008 plans (www.telecompk.net)

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