UNIVERSITI PUTRA MALAYSIA TRI/CELCOM: Fixed …psasir.upm.edu.my/8107/1/GSM_1998_17_A.pdf ·...
Transcript of UNIVERSITI PUTRA MALAYSIA TRI/CELCOM: Fixed …psasir.upm.edu.my/8107/1/GSM_1998_17_A.pdf ·...
UNIVERSITI PUTRA MALAYSIA
TRI/CELCOM: Fixed Services Division Strategic Analysis Factors and Strategies
SITI NORAINUL AZAM BT HJ. GHAZALI
GSM 1998 17
UXIVBRBITI PUTRA. lWIALAYIlIA MALAYSIAN GRADUATE SCHOOL OF MANAGEMENT
MASTER OF BUSINESS ADMINISTRATION SUMMER 19981 1999
TRI I CELCOM : Fixed Services Division Strategic Analysis Factors and Strategies
PREPARED BY SITI NORAINUL AZAM BT HJ. GHAZALI
51377 8th September 1998
PENGESAHAN KEASLIAN LAPORAN .
Dengan ini saya ,Siti Norainol Azam Bt. HaH Ghazali ,No
Matrik, 51377 pelajar kursus Master of Business
Administration, mengaku bahawa Kertas Projek atau Kajian
Kes ini adalah hasil usaha asal saya sendiri.
-------------------------- -------------------
Nama: Siti Norainul Azam b t Hj. Ghazali Tarikh: 07.09.98
DEDICATED TO MY FAMILY FOR
THEIR LOVE AND SUPPORT.
TR IIC e i c o m : F ixed S e rvic e s D ivision
CONTENTS
Part A
CHAPTER ONE 1.0 INTROD UCTIO N
1 . 1 History of TRIICeicom 1.2 B ackground of TRIIC eicom 1.3 Background and History of Fixed S ervices D ivision
CHAPTER TWO 2.0 Fixed Services S tructure 2.1 Fixed S ervices D ivision, Mission S tatement 2.2 High Level Roles and Responsibi l ities
CHAPTER THREE 3.0 Wor k C ulture in Fixed S ervices D ivi sion
CHAPTER FOUR 4.0 Fixed S ervi ce s Products and S ervices 4.1 D etai l s on Existing Product and S ervic e s
4.2 Future Products 4 . 2 .1 I SD N
4.2. 2. Global C alling C ard S ervices 4.2.3. Prepaid C ards
4.2.4. Video Conferencing 4 .2. 5 C entral Exchang e Syste m (CENTREX) 4.2.6. Global Frame Relay
CHAPTER FIVE 5 .0 Current Financial Performance
CHAPTER SIX 6.0 Telecommunication Industry in Mal aysia 6 .1 The Market: Businessl Residential
6.2. Th e MARKET: The Industry Players 6.3 JTM Regulatory: Government Policy
6 .4 B udget Perspec tive: Th e S eventh Malaysia Plan 6.5 Malaysia Fixed Line Market: O verview 6.6 Payphone Market: Overvi ew 6.7 Other S ervices : Internet S ervices
Page 1 SITI NORAINUL AZAM HJ GHAZALI
Page
4 7 9
12 13 14
22
24 26 30 30 33 36 34 39
42
44 4S
47 49 57
60 66 68
T R II Celcom : F ixed S e rvices Di visio n
cont. CHAPTER SIX 6.8 F ix ed L in e Mark et: N etwork Provi ders 6.8.1. Major Network Provi ders: O wn ership 6.8.2. Maj or Network Providers: Network D evelop men t 6.8.3. Network Provi ders: Tariff an d Rates 6.8.4. Net work Provi ders : Man power 6.8.4. 1 Celc om(Fixed Li n e) Man power.
Page 2 SITI NORAINUL AUM HJ GRAULI
71 73 74 75 76 77
TRIICeic o m : Fixed S ervices D ivision
PART B
CHAPTER SEVEN 7. O. Introduc tion 7 . 1 . Strength 7. 2 W eaknesses 7 . 3 Opportuniti es 7 . 4 . Threats
CHAPTER EIGHT
79 8 1 83 86 88
8 . 0 Competitive Analysis on the Market Leader(TMB) 9 1 8 . 1 . Competitive Analysis on other major network providers 94
CHAPTER NINE IFAS (Internal Fac tor Analysis S ummary) EFAS ( External Fac tor Analysis S ummary) SFAS( Strategic Fc ator Analysis Summary)
CHAPTER TEN 1 0 . 1 Details of the Profit and Loss for 3 1 . 1 2. 97 1 0 . 2 Details of B al anc e Sheet at 3 1 . 1 2 . 9 7 1 0 . 3 Acc ounting Ratio
CHAPTER ELEVEN 1 1 . 1 Key Strategic F ac tors 1 1 . 1 . 1 Growth through Conc ep tric Diversific ation 1 1. 1 . 2 . Pause and S tability Strategy 1 1 . 2 Rec omm ended Strategy IShort Term Strategy 1l . 3 Long Term Strategy 1 1 . 4 Imp lementation 1 1 . 5 Evaluation and Control
Refer enc es
Pag e 3 SITI NORA/NUL AZAM HI GHAZALI
96 98 9 9
1 0 0 1 0 1 1 02
1 04 1 04 1 0 5 1 06 1 0 7 1 0 7 1 1 0
1 1 1
T RIICeicom : Fixed S erv ices D ivis ion
CHAP T E R O N E I NTRODUCTIO N
1.1 History of TRI I Celcom
Cellular Communications Network S dn Bhd was formed as a private
limited company in January 1 988 , under the name of STM Cellu lar
Communications S dn Bhd which was initially owned by Syarikat Telekom
Mal aysia ( S TM) , now known as Telekom Malaysia . In December 1 989
after it has commenced operation STM sold 51 % of its stake to Alpine
Resources S dn Bhd . During thi s time the C ellular Communi cation s
Net work SIB customers base is already about 6,800 subs cribers . The
company l ater changed its name to C el com S dn Bhd .
Technology Resources Indust ries (TRI) was incorporated in 1 966 as a
private limited comp any in Malaysia and its shares was l isted on the
Kuala Lumpur Stock Exchange in 1971 . TRI was initially known as Roxy
El ectri c Industri es S dn Bhd .
P ag e 4 SITI NORAINUL AZAM HJ GHAZALI
TRI IC ei c om : Fixed S erv ices D ivis ion
TRI indirectly held 5 1 % stake of C ellular Communications N etwork S dn
Bhd through its subsi diary company Al pine Resources S dn Bhd and later
TRIICei com w as eventually formed when TRI acqui red the remaining
49% equity interest in C el lul ar Communi cations N etw ork (Malay sia) Sdn
Bhd for RM271, 705,000 and RM14,700,000 representing 36,750,000
ordinary shares of RM 1 . 00 each and RMI4,700,000 ( 8 %) Irredeemable
convertible cumulative preference shares of RM I . 00 each resp ectively .
The Cellular Communications N etw ork( C elcom) w as initially s et up back
in 1 9 8 8 by five y oung Malay entrepreneurs headed by E ncik Rosh Man .
TRII C elcom held maj ority shareholders of C elcom as well as s everal
other comp anies such as Alp ine Resources ( 1 0 0 % equity interest) , TR
International Ltd , TR(U S A) Ltd, and C elcom Ventures (Mal ay si a) S dn Bhd
as wholly ow ned s ubsidi aries . The exis ting list on TRIICei com
s ubsidiaries i s on Appendix ,Figure 1 .
Page5 SITI NORAINUL AZAM HJ GHAZALI
TRII Ce ic om : Fix ed S ervic e s D ivision
TRI ac t as a holding c ompany . throug h its subsidiaries an d assoc iated
c ompam es ,c ompany is pri marily eng ag ed 10 the provisi on of
telec ommun ic ation s servic es inc luding the provI si on of c ellular voic e an d
data tran smission , mic rowave lin k n etwork servic es ,the sale of pag ers,
an d provision of p ag ing servic es , the s al e of trun k radio equipmen t an d
the p rovision of radio trun king s ervic es ,the provi sion of radio
c ommun ic ation servic es an d the developmen t an d operation of
telec ommun ic at ion s n et work an d servic es .
In addition c ompany subsidiaries are also eng ag ed 10 property
developmen t an d in vestmen t, dealing in marketab l e s ec urities an d the
provision of s ec urities related servic es ,m otor home ren tals , t h e provision
of r ec reation al an d sport fac iliti es an d telec ommun ic ation s in dustry
train ing related servic es . It has also assoc iated c ompan ies an d j oin t
ven ture operation s in , The People Republic of Chin a ,B ang l adesh, Iran ,
C ambodia ,Tanz an ia, Hong Kong an d the Un ited States .
P ag e6 SITI NORAINUL AZAM HJ GHAZALI
TRIIC elcom : Fixed Services Division
1.1 Background of TRI/Celcom
After the revamp an d reorgan is ation of C ellular C ommun ication s N etwork
(M) S dn B hd i s n ow official ly kn own as C el com . A n ew corporate iden tity
accompan ied by a n ew logo called "S ayap Gemilan g" was laun ched in
199 7 . The logo embodies the freedom to commun ic ate without any
boun daries ;men tal, human or geographical . It als o portrays C el com as a
s in gle source that brin gs together the l atest commun ic ati on s an d reaffirms
the customer focused orien tation ; warm , approachab l e an d fri en dly. More
importan tly the "S ayap Gemilan g" en c apsulates our desire to be a ful ly
in tegrated commun ic ation s provider for the b en efit of customers an d the
comp any itself . A n ew in tern al taglin e was also p ro moted "Straight Talk"
con veys sin cerity to serve the bets to customers an d busin es s partn ers .
Lookin g b ack to its history an d compann g it to the presen t situation
C elcom tn its first year of operation was abl e t o secure about 6,800
subscribers in year 1 989 . And in 1 994 there are about 300,000 cellular
phon e users subscribin g to C elcom' s Art 900 system with accumulated
turn over of RM300 million un til that year.
P age 7 SITI NORA/NUL AZtM HJ GHAZtLI
TRIICelcom : F ixed S erv ices Divis i o n
Starting in from a team of tw enty five p eople 1 9 8 9 i t then doub led up
to over one thousand six hundred staff w here the company at pres ent has
almost four thousand staff throughout Malaysia .
The pos itive progress marked b y C elcom proved to b e succes sful In
strengthening its position in the cellular market w here it i s ab le to have
almost 9 4 0 , 0 0 0 s ub s crib ers b y end of year 1 9 9 7 .
I n line w ith TRIIC eicom mi s si on of b ecoming the region ' s premi er
telecommunications company , it has set its goal to b ecome a company
fully focused on telecommunications Thus to operate as a total
telecommunications s ervi ces provider it has ob tained l icenses for
International Gatew ay in 19 9 3 , digital c ellular and transmis sion in 1 9 94,
and offered fixed l ine s ervices I n 1 9 96, the l a test is to offer Internet
s ervices through its s ub sidiary C elcom Technology S IB in 1 9 9 8 .
The continuing market exp ans ion and market p enetration added w ith the
exp ansion of its line s er vic es the c om p any is con fiden t of its fu tur e to
propel ahead of the increas ed competition.
Page 8 SIT! NORA/NUL AZAM HI GHAZALI
TRIIC ei co m : Fixed S ervices D ivision
A t the s ame time Celcom' s operations internationally have continued to
expand in terms of market penetration and range o f services . This is due to
the development and accelerate growth of its transmission network and
international gateway .
1 .3 Background and History or Fixed Services Division
The Fixed S ervices Divisi on was s et up In 1 99 6 and still i n its infant
stage as it has only b een in the telecommunic ations for ab out one and half
year only . The division is meant to concent rate and o ffer s ervices
ranging from voice , image and data . The division started off b y offering
POTS ( Plain Old Telep hone System) to its fi rs t customer at Tasik Bukit
Merah , Perak .
Fixed S ervices Division ( F S D) is regarded as a p roduct hous e and operates
on its own although certain aspects of funding and infrastructure are still
implemented through TRIICelcom. Presently there are about eighty nine
staff stationed at various departments .
P age 9 SITI NORA/NUL AZiM HJ GHAZALI
TRII C ei com : Fix ed S ervi ce s Division
Staff ranges from management, tec hnic al as well as s up po rt s taff . The
Divi si on i s headed by i ts S eni or Vic e Presi dent , E nci k B adrul H assan
Mohamed Kassi m, who was p revio usly attac hed as the General Manager
for No rthern Regi on .
At present there are about 1 60 0 li nes b ei ng subsc ri bed and the divi si on i s
o pti mi stic that i t wi l l b e abl e to ac hi ev e thei r target of havi ng about 5 00 0
li ne i ns talled b y the end o f 1 9 9 8 .
One fac tor i s based o n the rec ent openi ng o f Mal aysi a Internati onal Ai rport
,KLIA S epang where they hav e been awarded the co ntrac t to i ns tall almo s t
2000 li nes i n the ai rport i tse lf b ei ng the s eco nd provi der o f i ts
teleco mmunic ati ons li nes B esi des upo n c ompletio n o f the
i nterc onnec tio n n etwo rk between o ther o pe rato rs and i nterc onnec tio n
agreement wi th Teleko m F S D wo uld b e abl e to o ffer a new produc t,
kno wn as Integrated S e rvic es Di gi tal N etwo rk(ISDN) to the public by
S eptember , 1 9 9 8 .
Apart from that Leased li nes s ervic es suc h as Internatio nal and Do mestic
,i t has also been o ffered but i t i s managed by C elc om Tec hnology S dn
B hd (CTSB) whic h wi ll als o o ffer Internet S ervic es Pro duc ts(ISP)
before the end o f thi s year.
Pag e lO SITI NORAINUL AZAM HJ GHAZALI
TRIICelcom : F ixed S er vi c e s Division
FSD ac ts indep endentl y b ut st i l l work together with other dep artment,
Divi sion or group that is th e Sh ared Infrastruc ture wh ich s upports In
terms of p roviding on time on budget exec ution of raw infrastruc ture and
equipment bes ides integrating end to end operations and maintenanc e of
th e network infras truc ture. FSD is al s o working cl osel y with th e Group
Marketing to as sist th e divis ion in giving inputs s uch as market res earch
and marketing tool s to promote th e produc ts .
I n addition s upport from Shared S ervic es are al s o obtained in order to
h el p c entral ised th e bill ing and c redit man agement as well as th e
information tech nol ogy needs .
Page 1 1 SITI NORAINUL AZA.M HJ GHAZA.LI
TRII C e lc om Fixed S ervic es Division
CHAPTBR T'1lV'O
O RGA N I SAT IO N S T RUCTURE
2.0 Fixed Services Structure
B ased on the C elc om organisational struc ture F ixed S ervic es Divi sion
(FSD) i s regarded as a group . How ever they still report to the
Management S e rvic es and in the divi sion itself there are eight
departments reporting direc tly to th e management , headed by a
S enior V ic e President � they are
• Strategic Planning and Regulatory A ffair s
• F inanc e and Acc ounting
• Human Resourc es and A dministration
• Produc t M anagement
• Tec hnic al! Produc t S upport
• B us iness S upport
• Greenfield I n itiatives
• CUC I n itiatives
For an overVI ew of the Celc om Organisation struc ture and F ixed
Servic es struc ture refer to Appendix ,Figure 2.
Page 12 SITI NORA/NUL AUM HJ GHAZALI
TRIIC elcom Fixed S ervic e s Divi sion
2. 1 Fixed Services Division, Mission Statement
FSD mIS Si on I S "To become the customers preferred network in
Fixed Line "
C elcom' s overall strategic vI si on I S to b ecome a customer focused
,integrated telecommunications company . With th i s Vision , C el com
b uilds and maintains relationsh ip s with th e h igh est values b usiness and
residential customers in Malay si a offering integrated mix of products and
s ervices th at suits th e c ustomers needs b esides gradually enh ancing its
l evel of tech nology to contrib utes s ignifi cantly to th e national goal
, making Malay sia a h igh tech nology and information - intens iv e society .
Th e divis ion ' s mis s ion i s translated th rough its roles and goals th at i s to .
develop and manage Fixed S ervices N etwork S ervi ce ' s strategic and
tactical b usiness plan th at s atisfy th e stake h older' s expectation; to b uild
h igh quality future ready network ;to strive and deliver personal ised and
customised product and s ervices any time ; to promote rich ,h armonious
and satisfy ing working environment th at s upports and nurtures a deep
sense of p urpose , contrib ution and personal congruence .
Page 1 3 SITI NORAINUL AZAM HJ GHAZALI
TRII Ceicom : F ix ed S e rv ic es D ivision
O verall the mission and goal s i s f ocused on comp eti ng on the basi s of
superior val ue, s ervic e and reli abi li ty over an increasi ng ly broad array of
products and s ervices. Thi s means C el com, F S D wil l agg ressi vely but
selecti vely move f orward into fi xed n etwork servi ces as a market ori en ted
en terpri se .
2.2 Higb Level Role, and Responsibilities.
E ach departments in F S D has it' s own mission statemen t wi th their own
roles and respon sibilities .
a)Strategic Planninl and Regulatory Affairs
The dep artment mission statemen ts are :-
To develop an d manag e Fix ed S ervices D ivision strategic an d tactical
business plan that s atisfy stakeholder ' s ex p ectation s .
Roles and G oals of each i ndi vi dual i n the departments are g enerally to
look i nto diff erent maters of the fol lowing ;
1 ) Strategic Plan nin g and C on trol where i t i nvolves developing strategi es
an d obj ectives f or N etwork S ervi ces, Marketing an d B usin ess O perati on s .
Page 1 4 SITI NORAINUL AUM HJ GHAULI
TRIICelc om : F ixed S ervic es Divi sion
2)To develop F SD Business Pl an and c onduc t process and operations
audit on business plan implementation.
3 )Contribution Management - wil l analys e ,rec ommend revenue sharing
mec hanis m between F SD and its Business P artners and to have the
opportunity to rec ommend , agree and monitor implementation of policies
and obj ectives with regard to contr ibutions by P roduct/ revenue lines .
4 )Preparing an intel ligence c ompetitive analys i s ( market, competitor and
tec hnology) , ex ternal analysis on e conomic s and industry as well as,
organisation and proces s analysi s .
5 )Tariff and D emand F orecasting will also b e done i n line with the
c ompetitors tari ff/rate offered.
6)Regulatory matters are to be observed to liase with Group Corporate
Planning , l ie __ I s ing and other b usiness matters and interconnection
matters .
P ag e 1 5 SITI NORAINUL Az.tM HJ GHAZALI
T RII C elcom : Fixed S ervi c e s Division
b) Network Services
The department ' s mis sion IS mainly "To build High Quality Future -
Ready Network ".
In s upport of its mission their roles and goal s are divi ded into typ es of
services offered by F S D
Public Switched Telephone Network (PSTN)
• To provide Technical switching and Access Network Plan
• To implement P S TN
• To operate and maintain P S TN switches and networks
DATA
• To develop local and inte rnational S trategic Alliances
• To provide Technical D ata Network Plan
• To implement Data Network
• To operate and main tain Data Network
VIDEO
• To develop local and international Strategic Alliances
• To provide detail network plan for Video S ervi ces
• To implement Video Network
• To operate and maintain data
P age 16 SITI NORA/NUL AZAM HJ GHAZALI
T RI IC e i c o m : F ix e d S erv i c e s D ivisio n
Access Network
• Access Network Technology identification
• To obtain approval fro m local authority
• To develop Access Netwo rk
• To operate and maintain Access Network
c)Business S upport
Mission S tatement of this department reads as "To continuously strive
Gnd deliver personalised and customised services and support, anytime.
"
Their roles and goals are mainly to ensure the fol lowings'
• To forecast S ervices directly to market centres
• To provide highly visible and acce ssible product
• To strive for strategic advantage and continuous improvement through
advance technology appli cations .
• To increase acquisition and retention of high value customer
• To enlarge corporate market share .
P ag e 1 7 SITI NORA/NUL AZiM HJ GHAZALI
T RI IC elcom : F ixed S e rvice s D ivis i o n
Responsible for billing and after s ervi ce requirements , also maintain
business relationship wit h other parties in other departments and group s to
standardise the operation systems .
d)Finance and Ad ministration
Th is depar tm ent is r esponsible for moni tor in g accounts and
prepan ng budget figures for the divis ion to follow . Their miss ion is
"To be Efficient, Understandable and Cost effective in providing
the service in Fixed Services Division II
Therefore the goals of this department is : -
eT o show the precise financial forecast for decision making
eT o be cost effective organis ation in order to realis e higher profits
eT o analyse the financial viabi lity of the future business
eTo be accountable in reporting the business operation
Pag e 18 SITI NORAINUL AZtM HJ GHAZ1LI
TRII C e i c o m : Fixed S erv ices D ivis i o n
F inance and Administration dep artment runs operations o n its own
however capital funding is obtained from holding group company, C elcom
S IB and budget figures will be in line with the whole I overall comp any
budgeted figures . Finance and Administration liase directly and indirectly
with certain dep artments in the division as well as other groups in the
comp any .
e)Human Resources Department
This dep artment manages employees activitie s s uch as Training and
Professional Development. It is also responsible for the employee
recruitment as well as deployment to other departments in the division and
company itself . The dep artment also acts as the repres entative for the
Human Resources Group .
P age 1 9 SITI NORAINUL AZAM HJ GHAZALI
TRII C eicom : F ixed S ervic e s Division
F) Product Development
This department is responsible for handling the development of the
existing as well as new p roducts and s ervi ces of F S D . E ach product
manager in the department prepares their own product plan and marketi ng
plan . Thi s m eans that the department provi des i np ut for all department in
F S D .
G) Corporate Urban Centre (CUC) I Greenfields
Thi s department is responsible for marketing the products and s ervices
of F S D and to generate and conduct market research on the most viable
area or regi on for FSD to p enetrate in the near future . They are also
responsible to implement the promotional activities that are being
planned and generated by the Product development to achieve targets set
by the SPRA, to accumulate profits proj ected by the Finance and
Administration department .
CUC which stands for C orporate Urb an C entre i s responsible to market
products around the urban areas especially in big established township
such as Kuala Lump ur, Ipoh , l ohor Bahru and other major township while
focusing more on business and commercial parks/b uil dings .
Page 2 0 SITI NORAINUL AZiM HJ GHAZALI
T RIIC elcom : Fixed S ervic e s Division
As for Greenfields it will look more on the new an d emergin g town ship
preferably in the more rural areas . examp le new business parks , technology
parks or new resi dential areas .
Page 21 SITI NORA/NUL AZAM HJ GHAZALI