A Frame Of Telecommunication Sector Marketing Essay

Published: 2021-08-10 05:45:05
essay essay

Category: Marketing

Type of paper: Essay

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Hey! We can write a custom essay for you.

All possible types of assignments. Written by academics

Egypt’s telecommunications sector is one of the largest in the Middle East and Africa, with an estimated US$2.6 billion in revenue annually. The Telecommunication industry in Egypt began in 1854, when the first telegraph line connecting Cairo and Alexandria was started to work and in 1881, the first telephone line was started too between Cairo and Alexandria. Until 1996, the Arab Republic of Egypt National Telecommunications Organization (ARENTO) was the only provider of all public telecommunications services in Egypt, and after was renamed Telecom Egypt, (El-Shinnawy and Handoussa, 2003; NTRA, 2010).
Egypt has always recognized the importance of communication in the economic and social development. But due to political, financial and war reasons, communications services were not on the top of priority list during the sixties and seventies, which caused significant failure in the efficiency, size and vision of the services provided.
Starting 1982, Egypt embarked on a serious and ambitious program to improve its communication services and networks as they refocused on the social and economic development of the country.
Telecom Egypt was established in 1918 as the Egyptian administration for telegram & telephone. Dramatic changes have occurred in Egypt's telecommunication sector since Law 19 of 1998 replaced Telecommunication Law 153 of 1980. The Telecom Law 19/1998 made Telecom Egypt a joint stock organization 100 percent owned by the Government of Egypt. Formation of Egypt's Ministry of Communications and Information Technology in October 1999 also marked the beginning of a new era for Egypt's telecommunications and information technology sector. This is represented in the development of new services like Smart Services Networks & the Integrated Digital Network. Both represent an efficient infrastructure, (NTRA, 2010; MCIT, 2010).
Despite relatively strong economic growth during the 1990s, Egypt was an IT laggard, even by regional standards, as recently as the latter part of the decade. Fixed-line telecoms penetration was low, services were of a poor quality and there was no Internet or mobile-phone provision. This has changed as the government has recognized that a properly functioning telecoms infrastructure is essential for attracting foreign investment and enabling a more efficient functioning of the private sector and government, (NTRA, 2011).
The government has also made strenuous efforts to support the development of the IT sector. In October 1999, in a step that signaled that the sector had been marked out for special attention, the telecoms portfolio was separated off from the transport and communications ministry and a new portfolio, "information technology", was added to the ministerial responsibilities. A number of initiatives were launched by the Ministry of Communications and Information Technology (MCIT), including the establishment of "smart villages". Tailor-made IT communities with the synergies to foster research and development and the creation throughout Egypt of some 810 IT "clubs" where IT skills can be developed. The authorities have encouraged foreign organizations to sponsor training facilities. The government also launched free Internet services in January 2002, and late that year set up a program to enable the purchase of computers. By November 2004 there were 3.8 million Internet users, up from 535,000 as recently as 2000. Personal computer (PC) ownership stood at an estimated 2.2 per 100 persons in 2003, (El-Shinnawy and Handoussa, 2003; NTRA, 2010; EIU, 2005; Kamel and Wahba, 2004).
Egyptian telecom provision has developed significantly over the past two decades. Until the mid-1990s the state-owned telecoms monopoly, now called TE, dominated all aspects of telecoms. Since then, the government has liberalized many aspects of the industry, in an effort to attract private capital and expertise in order to speed up the rollout of new services.
In 1995-96 the authorities began to issue licenses to private organizations for more sophisticated services such as Internet service provision. In 1998 the government corporatized the Arab Republic of Egypt National Telecommunication Organization (Arento), which dominated Egyptian telecoms, and named the operation TE. The government in 1998 also created the Telecommunications Regulatory Authority (TRA) to manage competition. The TRA was later replaced by the National Telecommunications Regulatory Authority (NTRA), created under a new law passed in February 2003, (NTRA, 2010).
3.2 Mobile Communication in Egypt
Mobile communication has become a necessity for everyday life. Its convenience and value-added to quality of life have led to mobile communication’s covering approximately all of Egypt. Wireless mobile communication is a promising and growing area of the telecommunication industry due to technical advances and increasing market demand. Additional market growth is still expected in the upcoming years. The market potential and opportunities have brought about severe competition among service providers. Sever competition has driven the need for increased network coverage and the enhancement of capabilities to meet market demand. This, in turn, has resulted in consolidation activity among major wireless carriers, (Kwon et al., 2008; Chiu and Hsu, 2010).
The telephone coverage in Egypt has rapidly changed through the last two decades. The number of mobile phone subscribers in Egypt has continued to grow whereas fixed phone subscribers have started to decline, (Kamel and Wahba, 2004).
The global wireless communications market has undergone remarkable growth since its initial years of operation during the late 1980s. The most widely used system for mobile communications networks is the Global System for Mobiles (GSM), which is used by roughly 62 per cent of global mobile telephony. In the Middle East region, more than 90 per cent of mobile telecommunications is dependent on GSM 900 networks. The Middle East region accounts for a relatively small share, 2.7 per cent, of the world GSM market, (MCIT, 2011).
Mobile phone devices are becoming more and more popular. In developed countries the mobile is being entering the market approaching saturation. Compared to other emerging markets, the Egyptian mobile telephony sector has changed and liberalized early, which allowed the private sector to invest in mobile communication networks. Due to the increasing popularity of the mobile phones, the structure of telephone ownership is rapidly changing in many countries. Nowadays, some households are not equipped with traditional landline phones but with only mobile phones instead. Previously, households living without a landline telephone usually did so because they could not afford a telephone. Now, a growing proportion of households living without a landline telephone may have chosen to do so because of lifestyle preferences. During the period 1998/2001, the Egyptian mobile telephony market has experienced high growth in terms of the number of subscribers, exceeding world growth rates as well as those in other Middle East and North Africa countries, (EIU, 2005 and 2012).
An association consisting of France Telecom, Motorola, Orascom of Egypt and other local partners bought the state-owned Global System for Mobile Communications (GSM) monopoly. The network had been built by Alcatel in May 1998 and named the organization the Egyptian Organization for Mobile Services (Mobinil). The government sold a license for a second network to an association led by Vodafone of the UK, and Misrfone as it was then called, launched its services in November 1998 under the brand name Click GSM, (NTRA, 2011; MCIT, 2010).
Orange, owned by France Telecom, owns 36.3% of Mobinil, Orascom holds 31.3% and the remaining 32.4% is floated on the stock exchange. Vodafone controls the second mobile system, under the name of Vodafone Egypt. Both organizations paid a US$516 million for license fee in 1998, (NTRA, 2010).
Telecom Egypt planned to establish a third GSM network when the exclusivity period for the first two licenses expired in late 2003. However, a deal between Telecom Egypt and the two mobile service providers was instead concluded in which Telecom Egypt agreed to give up its plans to set up a competitor. In December 2003 Telecom Egypt announced that it would give up its operating license for a GSM network and instead buy 25.5% of Vodafone Egypt, which took from Vodafone Group with 16.9% and 8.6% from minority shareholders with the E£1.9 billion license fee reimbursed by the NTRA, (NTRA, 2010).
Vodafone and Telecom Egypt jointly established a new organization named Wataneya, which holds 51% of Vodafone Egypt. Vodafone, however, has kept a 24.6% share in Vodafone Egypt directly, in addition to its stake in Wataneya, thereby retaining management control. Following the announcement, Vodafone Egypt was listed on the Cairo and Alexandria Stock Exchanges, allowing other shareholders to liquidate their holdings. Before the agreement with Telecom Egypt, Vodafone Egypt was 67% owned by Vodafone, 10% by the Alkan Group and 5% by the state-owned Banque du Caire. The balance of the organization was held by a number of organizations and individuals, (EIU, 2005; MCIT, 2012).
The NTRA mentioned that a third mobile network was not economically feasible because of the major hard-currency outlay, over US$250 million in network equipment and a further E£2.5 billion in investments over five years, according to local press reports.
Besides, the operator would have to compete against two of the world’s largest telecoms organizations. As part of the agreement Telecom Egypt has consented to stay out of the mobile market until November 2007. Instead, Vodafone Egypt and Mobinil will each pay the NTRA E£1.24 billion over four years for the use of Telecom Egypt’s vacant frequency, allowing for expansion and improved service. Telecom Egypt has been keen to add a mobile operator to its portfolio to make it more attractive to prospective investors, (MCIT, 2012).
The final auction round was held on July 4, 2006 where the third mobile operator license was granted to an association led by Etisalat of Emirates. The association also includes Egypt Post, National Bank of Egypt and Commercial International Bank.
The pressures of global competition and privatization in telecom industry are driving the service providers to improve their products and services. Earlier in the monopolistic environment, quality of services was not the priority for the service provider and customers had no choice but to accept whatever was delivered to them. With the introduction of full competition in cellular mobile services, quality improvement has become vital to telecom organizations trying to succeed in an increasing competitive environment, (Seth et. al., 2005).
Nowadays Egypt has three mobile service provider organizations, Vodafone, Mobinil, and Etisalat. Vodafone and Etisalat are global organizations entered the Egyptian market when they found opportunity to work in this market and both of them have a well known brand. Mobinil is the only domestic organization that works in this industry in Egypt. The three organizations has its’ corporate social responsibility programs and activities. It's important for these organizations to know if these corporate social responsibility programs and activities affect their customers attitudes and behavior or not and does it affect their service evaluation or not especially for Mobinil and Vodafone because they are in the market for the same period of time rather than Etisalat that entered the market in 2007. The review of the information about the three operators working in the Egyptian market – Mobinil, Vodafone and Etisalat – allows us to observe their active behavior in terms of social responsibility.
Vodafone is dealing on 43.54% of the mobile service market according to 2011 market statistics, while Mobinil has 40.86% of the market and Etisalat has 15.6%, (NTRA, 2011).
3.3 Vodafone and its’ CSR activities
The name Vodafone comes from voice data fone, chosen by the organization to reflect the provision of voice and data services over mobile phones. Vodafone is a british organization that launched on 1 January 1985.
In March 1998, the Egyptian Ministry of Telecommunications announced that Misr Fone Group (of which Vodafone owned a 30% share) was awarded the second license for GSM operations in Egypt (under the brand name of Click GSM). This decision was part of the move to privatize and liberalize the Egyptian market at the time, (MCIT, 2011; Vodafone, 2011).
Vodafone Egypt is one of the first organizations in Egypt established a department dedicated to corporate social responsibility activities in 2004 and has since been engaged in several philanthropic and community support projects.
One of the unique corporate social responsibility activities of Vodafone is that every year in 14th of February which is Valentine’s Day, 30 of the organization employees volunteer to visit the patients of the Public Heart Institute, and spend time with them to cheer them up. In the same time Vodafone donated medical equipment to the Laser Unit in the Public Heart Institute.
As many organizations in Egypt who concerning about learning and know its’ importance Vodafone have several activities on education such as the following:
In 2005 started a program in partnership with a group of non-governmental organizations (NGO) to establish computer labs for poor children. The program aims at helping them get familiar with new technologies and prepare them to the future. Vodafone donated around 560 PCs to nongovernmental organizations in different governorates.
In 2006, Vodafone started its annual Back to School program. This charity program aims to encourage poor people to educate their children through distributing thousands of school bags filled with school supplies to students in needy areas throughout Egypt.
In 2006, Vodafone started its program for renovation and reform of Schools: Madrasty. This program focus in primary education as cornerstone of children's education, according to this program Vodafone searches for the most poor communities and the most poor primary schools in villages across Egypt and works on developing a healthy environment at these schools to promote quality education. This program was implemented through partnering with developmental organizations and local non-governmental organizations, as they are the most integrated amongst local communities, (Vodafone, 2010).
Another unique corporate social responsibility activity for Vodafone in a campaign of blood donation that done on 14th of June 2008 in Alexandria which is the World Blood Donation Day. This campaign was in partnership with the "Society for urgent relief of chronic diseases", (Vodafone, 2010)
Vodafone is trying to help the society it works in with several ways. On the 18th of January 2010, floods hit several cities and governorates across Egypt, leaving hundreds of families homeless; particularly in Aswan which is located along the river Nile in the southern area of Egypt. Vodafone in this time started a disaster relief program led by the corporate social responsibility team to support the families impacted by the floods. The team provided families with basic food necessities, blankets, and clothing. Vodafone also provided the families the needed materials to reconstruct their homes, (Vodafone, 2011).
In order to maintain the health of school students, Vodafone completed a program of building 2000 clinics in schools across Egypt. During this program, each time a customer made a call, customer donated one piaster in addition to a piaster donated by the Vodafone in order to maintain a healthy environment and provide health care for children in schools, (Vodafone, 2010).
One of the unique corporate social responsibility activities of Vodafone is its’ annual mobile usage and safe driving awareness campaign. The campaign aims to notify car drivers and the public in general with the most important safe driving tips while using mobile phones. Special booklets have been distributed including information and instructions for safe driving and the right way to use mobile phones, especially on highways. These campaigns are timed at the beginning of the vacation season when traveling increase on highways, especially to the North Coast and Alexandria, (Vodafone, 2011).
Finally as part of corporate social responsibility activities of Vodafone started the literacy program that aims to eradicate illiteracy in Egypt within five years started from 2012. This program was launched in association with the United Nations Educational, Scientific and Cultural Organization (UNESCO) and the Life Makers Association, as well as several civil society organization and relevant entities, in coordination with the Ministry of Education. Vodafone provides funds as a contribution to this program to enhance knowledge and cultural awareness, which are the cornerstones of the next phase in developing Egypt, (Vodafone, 2012).
3.4 CSR in Mobinil
The first license was given to the national incumbent who had launched the first mobile service in 1996 (Mobinil). The Egyptian Organization for Mobile Services (ECMS), known in the market as MobiNil, started as a consortium of France Telecom, Motorola and Orascom Telecom. However, Motorola left the consortium in 2001 to avoid the negative consequences in the telecommunications equipment market as a result of being identified as a shareholder in one of the competing service providing organizations in Egypt, (MCIT, 2010; NATRA, 2010; Mobinil, 2011).
ECMS acquired the state-run network in May 1998 and enjoyed the advantages of the first mover. It is a joint stock organization with 51 per cent of its shares owned by Mobinil, 16.6 per cent by Orascom Telecom and 32.4 per cent by stockholders. Moreover, Mobinil’s shares are divided between France Telecom (71.25 per cent) and Orascom Telecom (28.75 per cent), (El-Shinnawy and Handoussa, 2003; Mobinil, 2010).
Not only has ECMS managed to overcome the restructuring challenges in upgrading the 100 inherited stations and recruiting skilled labour in the emerging field of telecommunication, but it has also improved its managerial and technical capacities to meet global standards.
The number of subscribers jumped from 83,000 to 2 million between 1998 and 2001, enabling the organization to grow at an annual rate of 686 per cent, on average, during the same period. ECMS has also introduced new services to the local market such as the Wireless Information Services in May 2000. The organization also launched the first General Packet Radio Service (GPRS) in 2002. These efforts for continuous improvement were aimed at preserving the organization’s leadership position and market share in Egypt.
Mobinil is one of the most active and leading corporate citizens in Egypt. As the leading mobile operator in Egypt, Mobinil believe that they have duties and responsibilities towards the society being served. The organization philosophy has, and continues to be, that success is not merely measured in financial terms, but in organization commitment to serving the community and investing in its welfare, (Mobinil, 2010; EIU, 2012).
Mobinil has several CSR projects in several areas. One of the CSR project is train and employee 2000 hands. Mobinil has partnered with top Egyptian non-government organizations (NGO’s) in an unprecedented initiative that aims to participate in boosting the country’s economy through creating 100,000 jobs in order to provide more and more opportunities for people to develop and earn a decent living.
While Mobinil initiated the program with its partners, its ongoing role will be to provide funding as well as publicity for the whole initiative in various media in order to maximize exposure and impact of the program. The NGO’s will train the candidates, execute the projects and provide regular project progress reports.
Mobinil academy is another CSR project the scope of it is to support education and development in the Egyptian society; as well as open career opportunities through equipping them with the required business skills and exposure that sets them up for promising career paths, (Mobinil, 2011; Mobinil, 2012).
To fulfill its objectives, Mobinil continuously outreaches and partners with educational entities and NGOs to support youth development in Cairo and regions at a large scale. This project go through giving scholarships and funding post and under graduate studies in different majors, providing university students with telecom related topics and data for graduation projects or thesis, and sponsoring universities competitions tackling business and telecom related projects. The project consists of much more activities related to business awareness events such as participation in career and business awareness workshops, and research and development support.
As the leading mobile operator in Egypt and the first to be ISO 14001 certified organization in the Middle East, Mobinil recognized the importance of environmental responsibilities through best practice and consultation, aiming to manage the impacts and keep up the excellence of its products and services. The organization community investment includes supporting projects that encourage sustainability and environmental protection, such as Waste Battery Collection and Recycling, and the tree planting initiative.
Mobinil also operate a checklist to help minimize the visual and environmental effects of their mast sitting and base station building – for example where schools or places of natural beauty are concerned. Mobinil believe that if they help to protect the environment, the health and safety of communities, they also enhance their reputation as a
sensitive and sustainable business.
Mobinil has many other social activities. Mobinil collaborated with the Egyptian Association for Diabetes Care in a campaign to Empower people with diabetes in order for them to better manage their condition. Mobinil's contributions to the campaign include offering an answering service that operates daily from 9.00 am - 11.00 pm with guidance and advice for people with diabetes, Offering monthly education session 20 hours courses conducted by certified diabetes educators for children, adolescent and their families with a focus on type-1 diabetes and type-2 diabetes. They also providing of medical supplies, tapes analysis for diabetes, syringes and equipment blood pressure analysis devices at subsidized prices, launching a Foot Clinic for early detection of diabetic foot and a series of school visits for awareness about diabetes among school students, (Mobinil, 2011).
Many other social activities for Mobinil such as distributing food for poor people especially in Ramadan, hosting Ramadan iftar for orphans, blood donation campaign, and sharing on a campaign to safe flood victims, (Mobinil, 2012).
3.3 CSR in Etisalat
Emirates Telecommunication Corporation ( Etisalat) was founded in 1976 as a joint-stock organization between International Aeradio Limited, a British Organization, and an emirates partners. In 1983 the ownership structure changed as the Emirates government held a 60% share in the organization and the remaining 40% were publicly traded.
In 1991 the UAE central government made changed in laws that gave the corporation the right to provide the telecommunications wired and wireless services in Emirates and other countries. It also gave the organization the right to issue licenses for owning, importing, manufacturing, using or operating telecommunication equipment, (Etisalat, 2010).
Today’s Etisalat is one of the leading international telecom organization operating in 18 countries around the world. Egypt is one of the countries where operation was launched in 2007. As shown from 2011 statistics etisalat has 15.6% market share of the mobile Egyptian market.
Likewise, Etisalat Misr is an active corporate citizen, the official sponsor of Egyptian football and the Egyptian national team taking every opportunity to engage in many social activities to serve the various groups of the Egyptian society.
Corporate Social Responsibility is a commitment from corporations to be ethical and contribute to the social and economic development of the society they operate within. CSR is slowly gaining energy in Egypt and the region and Etisalat Misr is one of the leading organizations in the CSR arena, (Etisalat, 2010).
Etisalat Misr regards Corporate Social Responsibility as an on-going commitment. The organization which is a participating member of the United Nations Global Compact has revolutionized the concepts of CSR, introducing trends like "Cause based CSR" and leading several initiatives in the fields of environment, special needs, humanitarian aid and sustainable development.
Although the highlight of Etisalat Misr’s program is the water related "origin" initiative, there are several other initiatives like the sponsorship of the Egyptian Paralympics committee and the creation of "ro’ya" the special tariff for the users of sign language that utilizes the Etisalat’s technological edge and wide 3G coverage, (Etisalat, 2011).
Etisalat continuously investing in mobile applications portfolio so that all visually-impaired customers can stay connected. The program of "Etisalat Masmou" application enables blind people to use the mobile service.
"Origin" is a nation-wide project Etisalat has devised to counter Egypt’s water dilemma. The initiative is in partnership with the giant international organization "Care" as well as renowned Egyptian non-governmental organizations like "Resala" the "Egyptian Society for integrated development" and others as well as a large number of community development agencies. It is estimated to directly aid hundreds of thousands of beneficiaries in 7 governorates in its first year, (Etisalat, 2012).
The initiative has five main components; the first and main component is bringing safe drinking water to the homes, schools and medical units of deprived villages that have suffered from thirst and have little or no access to drinking water. The second component is water purification which entails supplying villages, rural areas and squatter settlements suffering from polluted or contaminated water with purification plants and systems to filter the current water supply and turn it into usable drinking water. The third component consists of irrigation water interventions planned closely in collaboration with care's "water and stability" project officials, it features aiding villages suffering irrigation water difficulties to overcome their problems, this area includes construction, redigging and clearing kilometers of watercourses as well insulating them with stonework amidst other irrigation water management activities. The fourth targets kidney failure, a direct result of declined water quality; this includes providing hospitals with dialysis equipment and water treatment facilities enabling them to provide the patients with free dialysis treatment. It is worth mentioning that Etisalat supports underprivileged families with an average monthly income less than EGP 90. The fifth component is Water conservation; under the slogan "save water… save life", Etisalat introduced this fifth component as a call for action, (Etisalat, 2010 and 2011).
Etisalat believes in engaging its customers and the society in its CSR cause. Saving water in the homes and workplaces can greatly contribute to water provision. The capacity and reach of the water network will greatly improve if water is conserved. This component is of increasing importance given Egypt’s rapid population growth rate. All the mentioned components are complimented with the necessary preliminary researches to assess the needing villages and the suitable type of intervention. The initiative also labels awareness and education as a cross cutting theme; capacity development workshops for the CDAs taking part have already started, awareness programs for the beneficiaries and field trips for the school children of the target locations are also commencing shortly, (Etisalat, 2012).

Warning! This essay is not original. Get 100% unique essay within 45 seconds!


We can write your paper just for 11.99$

i want to copy...

This essay has been submitted by a student and contain not unique content

People also read