Study of telecommunication services and their promotional strategy in Nepal

ACKNOWLEDGEMENT

This report has been prepared as per the course requirement of the MBA in the first semester.
This report enlightened our knowledge towards the telecommunication operators in Nepal.

We are grateful to our Lecturer Dr. Nishakant Ojha, all our respondents and School of Business
Studies for providing with the necessary guidelines and support during our research activities. We
express our gratitude to all our colleagues for their guidance and valuable comments on the contents of
this report. Without their valuable support, we would not have been able to complete this study.

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 Study of telecommunication services and their promotional strategy in Nepal

ABSTRACT

Ncell and NTC are the two major network operators in Nepal. This study mainly aims to
compare the promotional strategies of the two network operators in Nepal. NTC is a state owned
telecommunication service provider in Nepal with 91.47% government share while, NCELL is a
privately owned GSM mobile operator in Nepal which was established in 2004 A.D.

Ncell became a part of Axiata Group Berhad on 12 April 2016, when the Group bought 100%
shares of Reynhold Holdings, which holds 80% shares of Ncell. On 21 December 2015 TeliaSonera
announced plans to sell its 60.4% ownership in Ncell to a Malaysian telecommunication conglomerate
Axiata.

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 Study of telecommunication services and their promotional strategy in Nepal

TABLE OF CONTENTS

INTRODUCTION ..................................................................................................................................... 4

1.1. Background ..................................................................................................................................... 4

1.2 Statement of problem....................................................................................................................... 9

1.3 Objectives of the study .................................................................................................................. 10

1.4 Research methodology................................................................................................................... 10

1.5 Source of data collection. .............................................................................................................. 10

1.6 Limitation of study ........................................................................................................................ 10

CHAPTER TWO ..................................................................................................................................... 18

FINDINGS, CONCLUSION AND RECOMMENDATIONS ................................................................ 18

4.1 Findings ......................................................................................................................................... 18

4.1.1 Ncell........................................................................................................................................ 18

4.1.2 NTC ........................................................................................................................................ 19

4.2 Conclusion and Recommendations................................................................................................ 19

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CAPTER ONE
INTRODUCTION

1.1. Background

Telecommunication services

A service provided by a telecommunications provider, or a specified set of user-information transfer

capabilities provided to a group of users by a telecommunications system is called Telecommunications
service. The telecommunications service provider has the responsibility for the acceptance,
transmission, and delivery of the message and the telecommunications service user is responsible for
the information content of the message.

Telecom services now include fixed-network services (data retail, Internet retail, voice retail and
wholesale) and mobile services. Fixed-data services includes all dedicated/private line, packet and
circuit-switched access services (for example, frame relay, asynchronous transfer mode, IP, Integrated
Services Digital Network, DSL, multichannel multipoint distribution service [MMDS] and satellite)
retail revenue. No differentiation is made between the type of traffic or application carried by these
services. All types of transmissions non-voice data, image, video, fax, interactive services and even
voice can be carried by these services regardless of whether the source format is analog or digital. All
revenue reflects service provider annualized retail revenue paid for by the business and residential end
user of the service; no wholesale or carrier-to-carrier revenue is included.

Fixed-voice services is another service that reflects retail voice service revenue for all services that are
sold as such to end users and includes the provision of local and long-distance services related to voice
(calling charges, line rental/subscription and connection fees are included in this category), enhanced
voice services, data and fax transmission over the circuit-switched PSTN, and retail voice over IP
revenue paid for by the business and residential end user of the service; no wholesale or carrier-to-
carrier revenue is included.

Mobile telecom services generate income from mobile telephone calls and mobile data usage (Short
Message Service [SMS] and mobile data access) from all mobile operators in that regional market..
Income from mobile telephone calling charges, mobile data access, SMS charges, line
rental/subscription and connection fees are included in this category. Wholesale/carrier services are not
included as a component of business IT spending. Wholesale/carrier services reflect carrier revenue
from carrier-to-carrier service transactions. Telecommunications services are a global market worth

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over US$ 1.5 trillion in revenue. Mobile services account for roughly 40 per cent of this, while mobile
subscribers worldwide currently outnumber the use of fixed telephone lines by more than two to one.
Over the past decade, the market has witnessed far-reaching changes, with the introduction of
competition into a sector that was once principally a monopoly. There are large numbers of the players
providing the telecommunication services in recent days.

Telecommunication services in Nepal

In Nepal, telecom service was formally provided mainly after the establishment of MOHAN
AKASHWANI in B.S. 2005. Later as per the plan formulated in the First National Five year plan
(2012-2017); Telecommunication Department was established in B.S. 2016. To modernize the
telecommunications services and to expand the services, during third five-year plan (2023-2028),
Telecommunication Department was converted into Telecommunications Development Board in B.S.
2026.After the enactment of Communications Corporation Act 2028, it was formally established as
fully owned Government Corporation called Nepal Telecommunications Corporation in B.S. 2032 for
the purpose of providing telecommunications services to Nepalese People. Nepal Telecommunications
Authority (NTA) is the regulatory body of telecommunications in the country. Today, there are two
Major telecommunication providers in Nepal, which have penetrated the market.

Major telecommunication providers in Nepal:

NCELL

Ncell (Nepali: ), is a privately owned mobile network operator in Nepal. Ncell was the
first private company to operate public GSM services in Nepal, initially under Mero Mobile brand, re-
branded to Ncell on 12 March 2010. It broke the monopoly held by the then state-owned, now public
telecommunication company Nepal Telecom. On 12 April 2016, Ncell has officially become a part of
Axiata Group Berhad, a Malaysian telecommunications group.

The company is owned in 80% by Axiata Group Berhad. Ncell has 6.73 million data
subscribers as of mid-February 2017. Ncell has 15.21 million mobile subscribers as of Mid-February
2017.

Mission:

To provide network access and telecommunication services

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Vision:

To contribute to a world with better opportunities

Strategy:

Solutions based on deep understanding

The major services offered by the Ncell:

Entertainment Messaging

Bonus Packs MMS

Afnai Dhun Short Number and Bulk SMS
Daily Packs SMS
Music and Fun SMS 2 Email
PRBT Voice SMS

Utilities Ncell loan

Balance Notify Me
Call Forwarding Video Call
Call Waiting Voice Mail
Conference Call Call Me
My5
Missed Call
Notification
Ncell Kosheli

Ncell provide services relating to the devices like iPhone, Ncell connect and to buy the smart
phone. Ncell has new technologies and thoughts that attract many customers across Nepal which leave
behind other telecommunications in competitive market. However, People across Nepal complain about
the charges and taxes it takes. It organizes several IT related programmes, Sport-tournaments and sales
smartphones being a carrier. It is continuously making effort on its promotional activities. It is very
good at advertising.

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NTC:

Nepal Doorsanchar Company Ltd. (Nepali: ), popularly known

as Nepal Telecom (Nepali: ) is state owned telecommunication service provider in
Nepal with 91.49% of the government share. The company was a monopoly until 2003, when the first
private sector operator UTL started providing basic telephony services. The central office of Nepal
Telecom is located at Bhadrakali Plaza, Kathmandu. It has branches, exchanges and other offices in
184 locations within the country.

It is the sole provider of fixed line, ISDN and leased-line services in Nepal. Following the entry
of Ncell (previously called Mero Mobile) into Nepal's telecommunications industry in 2005, it is no
longer the only provider of GSM mobile service. With more than 5,400 employees, it is one of the
largest corporations of Nepal. It has a total of 262 telephone exchanges in various parts of the country
serving 603,291 PSTN lines, more than 5 million GSM cellular phones and more than a million
CDMA phone line as of July 2011. According to recent data, there are about 10 million users of
Nepal Telecom including all those of fixed landline, GSM mobile, CDMA and internet service. Nepal
Telecom Launched 4G LTE Service on 1 January 2017. It is the first operator to provide 4G LTE
service in Nepal on technology neutral frequency band of 1800 MHz as standard for 4G in Nepal.

Mission

"Nepal Telecom as a progressive, customer spirited and consumer responsive Entity is committed to
provide nation-wide reliable telecommunication service to serve as an impetus to the social, political
and economic development of the Country"

Vision

"Vision of Nepal Telecom is to remain a dominant player in telecommunication sector in the Country
while also extending reliable and cost effective services to all"

Goal

"Goal of Nepal Telecom is to provide cost effective telecommunication services to every nook and
corner of country"

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Major services offered by NTC

Basic telephone, Internet PSTN Service

Mobile telephone
Local calls
National Trunk Calls
International Trunk Calls
International Telegram
Domestic Telex
International Telex
Leased Lines
Operator -Assisted Int'l Telephone
Packet Switching Data Communication
ISDN (Integrated services Digital
Network)
Pay Phone
Intelligent Network Services
PCC Easy Call Service
HCD Service
AFS Advanced Free phone Service
Universal Access Number service
PSTN credit Limit service

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CDMA Internet and E-mail.

Fixed Postpaid. Dial -up Internet /Email Access

Fixed Prepaid. PSTN Dial-up
SKY phone. Fixed hour package
Data Services. Night Surfing Package
Fixed hour / month package
Mobile Unlimited Single User Package
PSTN Bills in the Internet
Postpaid
Post-Paid Mobile Bills
Prepaid
Telephone Inquiry
Roaming (Incoming & Outgoing)
ISDN dialup
SMS
Leased Line Connectivity (n*64kbit/s)
3G Service
Web SMS
VAS Services
E-mail Alert

1.2 Statement of problem

The telecommunication companies such as Ncell and Ntc are competing in the market to
become number one in the field of telecommunication industry of Nepal. They have been investing in
promotional activities to a great extent in order to attract the customers. Ncell has made almost all the
Medias like news publication companies, FM, TV, various regional Medias as the advertising partner
in Nepal. Similarly, NTC as well use effective means of promotion that has made it the market leader.
They sponsor most of the national and international sports and cultural programme. There is strong
competition between Ncell and NTC. Nepal Telecom use to be one of the leading government
telecommunications in Nepal. The rise of the private telecommunication in Nepalese market, such as
Ncell is now penetrating the market. Thus, through this research is needed to find out the promotional
strategy of both the Ncell and Ntc, compare and evaluate them in order to reach to conclusion as
which one of the company is best in promoting the services to the customers?

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1.3 Objectives of the study

To study the different services provided by NTC and Ncell.

To compare the promotional strategy of Telecommunication industry (NTC and Ncell).

To compare and evaluate them in order to reach a conclusion as which one of the company is
best in promoting the services to the customers.

1.4 Research methodology

The first step in preparation of this report is to design the framework of the research. The task
begins with the collection of necessary data and information concerning the study. The data and
information collected has been studied carefully and presented them systematically and get them
analyzed so as to meet the objective of the report. All data provided has been thoroughly studied and
then search design was planned. The problem is identified and data are collected as per the research
framework. The collected data are further analyzed to come up with the valid conclusion.

1.5 Source of data collection.

Data are collected both from primary and secondary sources.

Primary data:

The data collected for the very first time is based on our own personal experience and a short
survey conducted with the people known to us. We all team members also visited the Nepal
Embassy in New Delhi to collect more information about the telecom service providers in
Nepal.

Secondary data:

The data were collected from various booklets, pamphlets, magazines and websites.

1.6 Limitation of study

The time to complete this report was very limited.

We were unable to interview top managers of selected organizations.

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Some of the information was extracted from the website, magazines so that data may not be
accurate and updated.
Insufficient budget for the research activities is another problem of this research.

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CHAPTER TWO
LITERATURE REVIEW

Marketing is a social and managerial process by which individuals and groups obtain what
they need and want, through creating, offering and exchanging products of value with others. Philip
Kotler. Marketing has great role for the success of any organization. Marketing includes all those
activities having to do with effecting changes in the ownership and possession of goods and services. It
is that part of economics which deals with the creation of time, place and possession utilities and that
phase of business activity through which human wants are satisfied, by the exchange of goods and
services for some valuable consideration- American Marketing Association. Marketing consist of
several activities defined as marketing mix. It consists of product, place, price and promotion.
Promotions refer to the entire set of activities, which communicate the product, brand or service to the
user. The idea is to make people aware, attract and induce to buy the product, in preference over others.
There are several types of promotions. Above the line promotions include advertising, press releases,
consumer promotions(schemes, discounts, contests) while below the line include trade discounts,
freebies, incentive trips, awards and so on.
According to the U.S. Communications Act of 1934 and Telecommunications Act of 1996, the
definition of telecommunications service is "the offering of telecommunications for a fee directly to the
public, or to such classes of users as to be effectively available directly to the public, regardless of the
facilities used." Telecommunications, in turn, is defined as "the transmission, between or among points
specified by the user, of information of the users choosing, without change in the form or content of
the information as sent and received. In Nepal there are two main telecommunication providers i.e.
NTC and Ncell.

In the present competitive scenario, Nepal Telecom is the only service provider that has been
providing rich and quality network services at affordable price throughout the country. NT serves over
45 percent of voice customers and over 57 percent of the total data users across the country. This
growth in market share has been possible even in the presence of stiff competition with other telecom
operators and the ISPs. As the incumbent operator, Nepal Telecom is concentrating its efforts to expand
service coverage in remote areas of the country and reach the under-served population. In the FY
2012/13, the customer-base had grown by 18.30 percent than that in the year earlier to reach 9.17
million. In comparison to this, customer base has grown by 18.83 From the Desk of Managing Director

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percent to reach 10.9 million in the FY 2013/14. Similarly, the Internet customer base has grown by
1.42 million than that of the previous year and has exceeded 4.7 million in the FY 2013/14.

Corporate Communication Director of Ncell Sanju Koirala says, We believe in living in the heart of
Nepalese people. We continue make efforts to provide better services to our customers with the
effective communication. Ncell is with you always. Ncell has new technologies and thoughts that
attract many customers across Nepal which leave behind other telecommunications in competitive
market. People across Nepal complain about the charges and taxes it takes. It organizes several IT
related programmes, Sport-tournaments and sale smartphones being a carrier. Recently, the company
announced that it will be launching 4G technology in the near future. Ncell is continuously making
effort to provide better services to the wider Nepalese customers. It is spending millions of rupees on
the promotion of its services. Erim Taylanlar, CEO of Ncell says that the slogan Ncell. With you,
always, has created the sense of belongingness to the Nepalese people. Ncell is continuously making
effort to promote its services in Nepalese market. There is revelry between Ncell and Ntc to surve the
Nepalese society. However, the main concern is if they are fulfilling all the services to the customers as
per their claim during their promotion.

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CHAPTER THREE
DATA PRESENTATION AND ANALYSIS

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Glimpse of telephone subscribers in one year

S. 2073 2074
No Operat
. ors

As Bh As Ma Po M Fal Ch Bai
ha Shra adr hwi Ka ng us ag gu aitr sha
d wan a n rtik sir h h n a kh Jestha

15,53 16,2 16,48

15,01 15,249 2,85 15,79 16,03 40,5 5,13 16,72 16,92 17,10 17,27
1 NDCL 4,434 ,778 9 3,498 7,633 73 4 0,305 1,403 6,833 7,117 17,442,330

526,6 526,72 526,7 526,7 526,8 527, 526,8 526,8 526,8 526,8 526,8
2 UTL 35 3 54 91 12 121 45 54 57 61 67 526,868

14,38 14,9 15,02

14,14 14,260 8,17 14,48 14,67 17,0 5,83 15,15 15,21 15,40 15,49
3 Ncell 5,758 ,970 9 4,137 2,441 84 4 1,528 5,701 1,960 5,158 15,628,945

2,98
4 STM 2,987 2,987 2,987 2,987 2,987 7 2,987 2,987 2,987 2,987 2,987 2,987

371,6 371,66 371,6 371,6 371,6 371, 371,6 371,6 371,6 371,6 371,6
5 NSTPL 68 8 68 68 68 668 68 68 68 68 68 371,668

1,42
1,389 1,406, 1,406 1,413 1,443 9,71 1,411 1,430 1,493 1,501 1,531
6 STPL ,864 235 ,235 ,957 ,261 5 ,630 ,409 ,922 ,269 ,148 1,600,901

1,74
7 Others 1,742 1,742 1,742 1,742 1,742 2 1,742 1,742 1,742 1,742 1,742 1,742

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3.1 Data Analysis

Statistics of Nepal Telecommunications Authority (NTA) reveal that Ncell exceeds NT in
terms of active SIM users by almost four million. As per NTA data, there are 11 million
active subscribers of Ncell SIM across the country against only seven million of NT.
NTA, the countrys telecom sector regulator, had carried out a one-day cross-monitoring of
active users of both Ncell and Nepal Telecom in October.
However, NT is ahead of Ncell in terms of total SIM distribution till date. While NT has
distributed 15.7 million SIM cards, Ncell has distributed only 14.9 million SIM cards.
It is interesting to note that though NT has distributed more SIM cards than Ncell, it actually
has lesser number of active callers.
The government has 91.49 per cent share in NT.
Nepal Telecom also lags behind Ncell in terms of proper use of frequencies provided by NTA
to generate revenue.
According to Digambar Jha, chairman of NTA, NT was able to generate only Rs 40 billion
revenue using frequencies under different bandwidth in the last fiscal year, while private
operator Ncell generated revenue of Rs 56 billion in the same year though Ncell has been
assigned limited frequency by the government.
NTA has provided 70 MHz frequency to NT on different frequency band while Ncell enjoys
only 29 MHz frequency under different frequency band.
Meanwhile, Nepal Telecoms share in overall telecommunication services is better than Ncells.
According to the telecom regulator, NT and Ncell dominate the telecommunication market of Nepal
with 49 per cent and 44 per cent share, respectively.
NT is probably lagging behind in output due to ineffective network planning, use of technology and
marketing.
Meanwhile, mobile penetration in Nepal has exceeded 110 per cent today in terms of number of SIM
cards registered. However, it does not fully reflect the actual per cent of people with mobile phone
subscription as people often have more than one SIM card under their name.

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CHAPTER FOUR
FINDINGS, CONCLUSION AND RECOMMENDATIONS

4.1 Findings
From the data we found that the Ncell has been using best promotional strategy. We found the
following reasons for choosing Ncell as a best advertiser by the respondents.
Ncell uses best promotional strategy. Its video advertisements are very creative and
worth watching. Ntc doesn't need any advertisement. It's more on demand despite any
advertisements. However, it would be better if Ntc too brought creative
advertisements like that of Ncell. The promotional attempts of Ntc is really lesser than
that of Ncell.
Ncell focuses on marketing and ability to decide/implement quickly.
Ntc don't need it but Ncell has been using good PS for adding more customer in their
list.
The effort of Ncell can be seen in promoting its services all over the country.
Ncell is more reliable.
Ncell frequently introduces various promotional schemes which matches customer
needs and their promotional activities are focused on attracting youths.
Ncell spends higher in advertisements.
Ncell using best promotional strategy with customer satisfaction.
Ncell spends higher in advertisements.
Ncell, customized service and different ads.
Ncell is attractive and touches human feelings.
Ncell has strong brand
Ncell uses best promotional strategy because it has a lot of advertisements as well as
brings various plans on different occasions.

4.1.1 Ncell
During our secondary study we found that the Ncell is following several promotion strategy. Some of
the major strategies are following:

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Ncell Nepal Literature Festival

Ncell makes calling India more reasonable

Short Number and Bulk SMS Service

Ncell Purple Saturday 2070 ( Durbar Marg street festival)

Ncell Recharge and Win

Ncell reduces rates to Rs.1.99 per minute

Sajilo starter SIM of Rs.99 only

Ncell Gaun

Flash moves

4.1.2 NTC
NTC is also spending its resources on the promotion of its services. During our study we found that
NTC is conducting following promotion strategy that has got the light of importance:

1. Bagmati clean-up campaign

2. NTC provides solution to result query
3. Nepal telecom corporate futsall league
4. Dashain, Tihar and Chat offer
5. Football sponsorship with Nepal Police
6. Prabhatpheri
7. International telecommunication day( night data package) on 2073-2-3
8. SLC sim offer

4.2 Conclusion and Recommendations

Promotional strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable, competitive
advantage. Through this study we can conclude that Ncell uses a better promotional strategy than
NTC. Much things are done by Ncell to promote the brand and bring more awareness among the
people. Ncell is a private entity and such things are highly important for its promotion and awareness.
However NTC is a state owned entity and nothing much is done for its promotion. During this study
we also found that Nepalese trust state owned entity more than a private one. Hence, this factor i.e.
trust for a public entity requires much lesser promotion of NTC in Nepal.

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Moreover, Ncell does many of the things that would attract more audience and compel people
to use their services through different innovative ideas and offers. Ncell believes in continuous
research activities so that it could address the recent need of the people. This study shows that NTC
does not work even half for such activities unlike the Ncell does.

This study further helps t draw several conclusion regarding the comparison between NTC and Ncell
in terms of satisfaction through service, internet facilities, roaming facilities, instant text replying,
instant receiving and calling and so on.

This study is an inspirational case study which compares the two biggest telecommunication
services in Nepal in terms of the satisfaction among people through their services and the best
promotional policies they use to promote their brand. This study can be helpful for the further
research activities in the telecommunication field.

Through this study the following recommendations can be made:

NTC and Ncell are sort of competitors in Nepal, Ncell works very hard on promotional
activities but NTC does not work much, hence it would be good if NTC could make a little
more efforts for its promotion.
Ncell does many activities that touches the heart of people and compel them to use Ncell, but
the only factor that pulls them down is the cost factors, hence Ncell could capture high market
share if it could lower its cost of services.

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References:
http://www.roshanjoshi.com.np/web/attitude-survey-of-ntc-vs-ncell-mobile/
https://w4university.wordpress.com/2013/05/20/ntc/
http://www.abconsultant.com.np/article/Promotion.pdf
https://thehimalayantimes.com/business/nepal-telecom-lags-behind-ncell-number-active-sim-
users-revenue/
https://www.telegeography.com/products/commsupdate/lists/country/nepal/
file:///C:/Users/HPW/Downloads/NTA-MIS-123.pdf

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