competitive analysis of gsm based cellular services providers in pakistan using house of quality

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Competitive Analysis of GSM Based Cellular Services Providers in Pakistan Using

House of Quality.

Imran Ghafoor Chaudhry

Department of Management Sciences

COMSATS Institute of Information Technology, Islamabad, Pakistan.

[email protected]

Dr. Qasiar Abbas

Department of Management Sciences

COMSATS Institute of Information Technology, Islamabad, Pakistan.

[email protected]

Muhammad Bilal Butt

Department of Engineering Management

Center of Advanced studies in Engineering, Islamabad, Pakistan.

[email protected]

Khalid Abbas Gondal



[email protected]

Muhammad Khurram Riaz



[email protected]

Abstract

The Telecom sector all around the world and especially in Pakistan has experienced a tremendous growth in the

last few years. However, through our research we have identified a shift in the buying pattern of the cellular

services subscribers as they are now becoming more conscious of the quality of services (QoS) which are being

offered to them rather merely the availability of economical packages.

We have used the House of Quality model to ascertain the level of quality consciousness among the

customers/firms and how these firms are undertaking quality related initiatives to create differentiated

products/services for one of the rapidly growing market. It is also one of our main findings that more engineering

efforts are required of the cellular services providers as far as following the rules & regulations, voice quality

and expansion of network is concerned.

Keywords: QFD, House of Quality, Cellular services provider, QoS and Pakistan.

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I. Overview of Cellular Services Providers

The telecommunication sector of Pakistan was awarded the status of industry in 2005 and since then it has

been one of the fastest growing sectors of Pakistan quite eminent from various factors such as the mobile

density reaching 52.87 in April, 2008 and the number of mobile subscribers reaching 85 million. (Source:

Pakistan Telecommunication Authority, Annual report 2007-2008).

Figure: 1 Cellular Mobile Projection

(Source: Pakistan Telecommunication Authority Annual Report 2007-2008)

This has been a trend in all of the developing economies of Asia and also in the South Asian region where the

mobile penetration is highest in Pakistan.

Table 1: Mobile penetration of Regional Countries (%)


The cellular service sector is now contributing more than 2.0% of Pakistan’s GDP and annual GST/CED

collections from this sector was 8.89 billion rupees during Jan-Mar 2008 (Pakistan Telecom Authority, 2008).

And at the same time Foreign Direct Investment has been the highest in the Telecommunication’s sector of

Pakistan reaching to almost 35.6% in 2006-2007.

Table 2: FDI in Pakistan Leading sectors Including Telecom Sector


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One reason that can be attributed to such an enormous influx of FDI in the Telecom Sector of Pakistan has

been the de-regulation policy adopted by the Pakistan Telecom Authority (PTA) inviting more/new

investments by world renowned telecom/cellular services providers such as Eitalsalat, Warid, Wateen,

Orascom, China Mobile and etc.

Figure 2: Investment by Cellular Mobile Operators (2006-2007)


The annual gross revenue (recent & forecasted) of the cellular companies again shows that the Mobilink will

continue to show its domination and will continue to earn many times more than its competitors.

Table 3: Total Revenue by Mobile Operators 2004-2007


II. Model

Although Quality Function Deployment (QFD) does not result in reduction of the product development time

but it does helps in the development of better product resulting in better customer satisfaction (lager, 2006).

Various researchers have analyzed the use of QFD in better product development such as Barry & Gabriel

who studied the application of QFD for interactive games development. At the same time it is been studied

that the structured processes like QFD have been used to identify and influence customer requirements (Tidd

et al., 2006).

House of Quality being a graphic tool for defining the relationship between customer desires and the

firm/product capabilities is a part of the Quality Function Deployment (QFD). It utilizes a planning matrix to

establish relation between what the customer wants and how a firm can develop products that is going to meet

those wants.

“Quality Function Deployment (QFD), as a customer-driven tool, is generally used in the early phase of new

or improved products/services design process, and therefore most of the input parameters are highly subjective in nature” (Raharjo et al. 2008). Also “QFD is a system for translating customer requirements (government

regulations, operating conditions and buyer expectations) into suitable technical characteristics and ensuring

that important ones are prioritized in the design” (David Joaquin et al. 2007). Thus it was decided to conduct

various surveys in order to obtain the data characteristics or the quality of services determinants directly from

the concerned stakeholders to be later incorporated in the model.

As the first phase of the research we have confined ourselves to the House 1 of the House of Quality where

the relationship matrix is built between the customer requirements in terms of quality of services and the steps that Mobilink is taking/plans to take to match those requirements. The same matrix is also loaded with the

information of the closest competitor Telenor in order to evaluate the competitive positioning.

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Figure 3: House of Quality

(Source: Thomas Lager, The industrial usability of quality function deployment: a literature review and synthesis on a meta-

level)

III. Customer Requirement Acquisition

Methodology

There are different mechanisms that an organization can use to collect data. The organization can

search (solicited) for the information, or the information can be volunteered (unsolicited) to the

organization. Solicited and unsolicited information can be further categorized into measurable

(quantitative) or subjective (qualitative) data. In the solicited, measurable way we can gather the

information by customer surveys, market surveys and trade trails like working with preferred

customers, analyzing products from other manufacturers etc. We have used customer surveys

approach to determine the factors/features which contribute to the quality of services provided by

any mobile service provider.

In House of Quality the voice of customer is very important rather it is one of the fundamental

elements. To get the feed back of the customers for the House of Quality we conducted a survey. The

survey was divided into two phases. First phase of survey was regarding identification of data

characteristics and the second phase was about rating Mobilink and Telenor based on these data

characteristics.

Survey Phase I

The first phase of the survey constituted of asking cellular services subscribers regarding the

factors/features which they think are determinants of the quality of services provided by any mobile

service provider. The respondents consisted of literate people of Islamabad and Rawalpindi who

have been using any cellular services. It was an important limiter as a good level of thought process

and observation was required of the respondents.

The survey Phase-I revealed that better connectivity/reliability/Network Availability was the main

quality determinant of quality of services followed by help line/better customer support and

customized new applications. All other factor along with their weightage is given in the following

graph:

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Figure 4: Results Survey Phase-I (Customer Requirements Acquisition)

Survey Phase II

In the second phase of the survey a survey form containing the QoS determinants identified as result of survey

Phase I and asking respondents to rate Telenor and Mobilink against the quality factors/ features. Limiter at this stage of survey was that the respondents are either subscriber of Telenor, Mobilink or of both. The results

obtained shows that Mobilink has edge over Telenor in terms of country wide coverage and otherwise as far

as other determinants are concerned Telenor has the edge.

0

2

4

6

8

10

12

14

16

Results: Survey II

M OBILINK 8 7 6 6 5 5 4 6 6 5 5

TELENOR 7 7 7 8 6 7 7 8 6 7 7

Country

wide

coverage

Internatio

nal

Connecti

Customiz

ed/new

applicatio

Better

Voice

quality

Help Line/

Better

Customer

Better

Connecti

vity/Relia

No

Hidden

Charges

GPRS

Facility

Number

Selection

Inter-

network

rates

Better

Security

Figure 5: Results Survey Phase-II (Customer Requirements Acquisition)

IV. Technical Requirements Acquisition This stage consisted of collecting data about the technical descriptors i.e. how the firm describes its quality

consciousness embedded in the future plans. A mix of interviews and surveys was used in order to obtain

these descriptors.

Methodology

To acquire the technical feedback we adopted an approach consisting of both interviews and surveys.

However, the limiter at this stage was to obtain the data from the technical team and management people

working in these firms who have a say in the organizational decision making or in process/product designing.

PHASE-I

In this phase various senior managers of Telenor were interviewed and information about quality determinants as perceived by their organization were obtained. The basic aim is to identify the technical descriptors which

then can be used to carryout the next phase whereby we evaluated the competitive positioning of Telenor

against Mobilink based on these technical descriptors. The technical descriptors identified in this phase are

listed below:

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Table 4: Results Phase-I (Technical Requirements Acquisition)

Sr. Technical Descriptors

1 Innovative value added services 2 Improving quality of services

3

Enhanced data rates for GSM Evolution (9.6-114)kbps

4 Strictly follow the PTA security procedures

5 Install best possible billing solutions

6 Can work to provide number on will

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5-6 International roaming partners are signed monthly

8 Voice quality monitoring via vendors

9 Aggressive approach towards expanding network

10 Mark areas where there are only outdoor clients

11 Trying to offer more economical package

PHASE-II

In this phase we distributed the questionnaires based on the technical descriptors identified in Phase I. Here

limiter was again that the respondents should be the subscriber of Telenor, Mobilink or have used both in past.

The basic idea is to ask the respondents to compare and rate the competitive ratings of the firms in question

based on the technical descriptors identified previously.

Result-Phase II

0

1

2

3

4

5

6

7

8

9

Rating

Technical Descriptors

TELENOR

MOBILINK

TELENOR 8 8 8 9 7 7 9 7 9 8 9

MOBILINK 7 7 7 9 6 6 8 6 8 8 8

Innovati

ve value

added

Improvi

ng

quality

Enhanc

ed data

rates for

Strictly

follow

the PTA

Install

best

possible

Can

work to

provide

5-6

Internati

onal

Voice

quality

monitori

Aggress

ive

approac

Mark

areas

where

Trying

to offer

more

Figure 6: Results Phase-II (Technical Requirements Acquisition)

The results shows that Telenor is ahead of Mobilink in almost all of the technical descriptors such as in

offering innovative value added services, improving quality of services and etc. However they are equal in

some descriptors such as in strictly following PTA rule and in marking & providing services where there are

only outdoor clients.

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V. House of Quality

As mentioned earlier that because of various research constraints we have confined our research to

building house 1 at this moment. Using the information collected in the Phase-I & II of collecting

information on the data characteristics, Phase-I and II of the identification of the technical

descriptors and after doing relevant computations the house-1 of house of quality model is given

below.

Figure 7: House of Quality (House-I)

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VI. Findings & Discussions

Step 1: customer requirements

This stage is marked by the identification of the factors or variables by the customers which defines the

customer requirements. This in fact determines the quality parameters as perceived and required by the

customers. In order to remove any bias from this process we use the Factor Rating method and using the

Survey 1 form let the customers themselves first identify the important factors/variables. Along with the identification of the variables/factors another important step completed at this stage was the estimation of the

weights of the said factors.

Using the number of responses as the basis of assigning weights we identified three important facts. Firstly all

the identified factors/variables can be divided into two groups namely features and performance. Secondly the

factors and variables with most weight age when ranked in descending order revealed that better

connectivity/reliability/availability got the most weightage by the consumers closely followed by a desire of

customized/new features, better customer support services and enhanced nation wide coverage. Third important fact that needs attention is that the customers of cellular service providers are so tuned to low

quality at economical packages that although this survey is about QoS but most of the customers still believe

that offering an economical package is still a quality factor.

Step 2- technical descriptors

In this stage it is required that technical descriptors be identified. As our base firm is Telenor so we carried out two detailed interviews in order to present before them the customer requirements and also to find out what

the Telenor is doing or plans to do to cater for these factors/variables.

After detailed discussion and analysis of the interview sessions we identified eleven technical descriptors.

These technical descriptors are:

� Innovative value added services

� Improving quality of services

� Enhanced data rates for GSM

� Strictly follow the PTA security standards

� Install best possible billing solutions

� Can work to provide number on will

� Signing 5-6 international roaming partners each month

� Voice quality monitoring via third party

� Aggressive network expansion strategy � Mark areas where there is outdoor traffic only

� Try to offer more economical package

Important point to note over here is that most of these are solutions to already existing quality related issues.

This shows that these are remedies and not prevention mechanisms.

STEP-3 Developing the Relationship Matrix between What’s and How’s

This stage is marked by establishing the relationship between customer requirements and the technical

descriptors. The basic idea is to mark the relationship as High (9), Medium (6) and low (3) depending upon

the correlation between what’s and how’s.

It is found that the strongest correlation exists between the strictly following the PTA security procedures and

other customer requirements. This was followed by the correlation between the innovative value added

services and voice quality monitoring via 3rd

party vendor. However, very less correlation exists between the

intention to work for providing the number on will and other customer requirements.

STEP- 4 Inter-relationship Matrix between HOW’s

This is the stage where we completed the hut of the house of quality be establishing cross-correlation among

the various technical descriptors. Firm carries out this stage as it helps them to identify those features that

might have more than one positive impact on the future products or services.

There are four levels of inter-relationships namely positive, strong positive, negative and strong negative. In

our research project we have find out that there again exists a very string correlation between the strictly

following the PTA security procedures and other technical descriptors. The reason is obviously the big brother

role of PTA and therefore every new policy or tactics of a cellular firm entirely depends on these guidelines

issued by the PTA.

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Another important consideration at this stage is the relationship between the aggressive plans for expansion

and other technical descriptors. This rather shows an overall negative correlation which simply shows that

expansion of the existing network not necessarily means that the company will also improve on other quality

related issued raised by the firm itself.

Step-5 competitive assessment

Competitive assessment means the assessment of the firm and its competitor by the customers. At this stage

we carried out the Survey 2 and asked the consumers to rate the service offered by the Telenor and Mobilink

on the basis of the performance and features already identified during the Survey 1.

It has been found that Telenor is ahead of Mobilink in all performance and features accept they are equal in

offering international connectivity and Mobilink is ahead only in the offering of more country wide coverage.

This is indoubtly true as Mobilink is still offering more coverage in Pakistan.

Another important finding of this stage has been the large difference that exists in the minds of the consumers

when they compare the services of these two firms in terms of hidden charges. Consumers believe that there

are less hidden charges in Telenor packages as compared to that of the Mobilink.

STEP-6 Developing prioritized Customer Requirements

These are based on the results of Survey 1 whereby the consumers were asked to identify the most important

factors/variables that they take in consideration while selecting the cellular service provider. On the basis of

this survey we were able to compute the weigthage that customers have given to each of these required

features or performance parameters.

According to the results following are the factors along with their ranking in terms of weightage:

Table 5: Prioritized Customer Requirements

Better Connectivity/Reliability/Network Availability 7

Customized/new applications & Features 5

Help Line/ Better Customer support 5

Country wide coverage 5

Better Voice quality 4

GPRS Facility 1

Better Security 2

Inter-network rates 1

Number Selection 1

International Connectivity & SMS 1

No Hidden Charges 0

This clearly shows that the consumers give more weightage in the availability of un-interrupted services

through better connectivity and reliable network availability.

Target value

The target value cell helps the firm to identify and define its future directions. On the basis of the interviews

conducted by us with the Telenor authorities we find out that they are more concerned with the enhancement

of the existing network more than any thing else.

At the same time they feel contempt with level of reliable network, internet work rates, GPRS facility and the

level of hidden charges (if any). However the improvement of the quality of service and offering innovative

and customized features has a secondary importance.

Scale-up factor

This sub-stage tells us the level of improvement that the company requires in its product/service offerings in

comparison to the customer requirements. Here it is our finding that the customers of the Telenor requires

them to work more harder in their efforts of offering more country wide coverage, option of number selection

and especially in offering of better help line/customer support services.

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Sales point

During our interviews we asked questions to analyze how the Telenor executives feel about the technical

descriptors they are offering or plans to offer and about the sale-ability of the customer required

factors/variables. In this regard we have observed that as far as the features are concerned offering better help line and customer support services have more attractive opportunities in the market. At the same time as far as

the performance is concerned, the Telenor executives feel that by offering better coverage, better voice quality

and reliable connectivity and network services will help them to better attract new and serve existing

customers.

Absolute weight

Absolute weight helps us in prioritizing the customer requirements by taking in consideration the importance

to customers, scale up factor and the sales point. Following are the results of the computations done by us:

Table 6: Absolute Weights

Customized/new applications & Features 6

Help Line/ Better Customer support 12

GPRS Facility 2

Better Security 2

No Hidden Charges 0

FEATURES

Number Selection 1

International Connectivity & SMS 1

Better Voice quality 8

Country wide coverage 13

Better Connectivity/Reliability/Network availability 14

PERFORMANCE

Inter-network rates 1

It is clear from the above mentioned results of computations customers are more concerned for the better

connectivity/reliability/network availability closely followed by better coverage and then by better help

line/customer support services. This is the one of the most important finding of our research project as it

clearly highlights the desire of the main stake holders namely the consumers, cellular service providers and

the PTA to offer quality services and features. This is however a main shift from the results of our earlier

research. The results of earlier research had showed more inclination of the consumers towards the desire of

economical packages as compared to the quality of services.

Step-7 developing prioritized technical descriptors

This stage is marked by the comparative analysis of the technical descriptors as being offered by the Telenor

and the Mobilink. For this another important stage we carried out Survey 3 whereby we involved only the

technical team members of the two firms in question and asked them to rate there services against the

technical descriptors already identified. The results shows that the firms are at par as far as following the PTA security regulations is concerned but Telenor is ahead of Mobilink when it comes to the rest of the customers

services and technical department technical descriptors. Following is the summary of results of the Survey 3:

Table 7: Prioritized Technical Descriptors

Customer Services Technical Department

Inno

vat

ive

val

ue

add

ed

serv

ices

Impro

vin

g q

ual

ity o

f se

rvic

es

Enh

ance

d d

ata

rate

s fo

r G

SM

Evolu

tion

(9.6

-11

4)k

bps

Str

ictl

y f

oll

ow

the

PT

A

secu

rity

pro

ced

ure

s

Inst

all

bes

t poss

ible

bil

ling

solu

tio

ns

Can

work

to p

rov

ide

nu

mb

er

on

wil

l

5-6

Inte

rnat

ional

roam

ing

par

tner

s ar

e si

gn

ed m

onth

ly

Vo

ice

qual

ity m

on

itori

ng v

ia

ven

dors

A

ggre

ssiv

e ap

pro

ach t

ow

ards

expan

din

g n

etw

ork

M

ark a

reas

wh

ere

ther

e ar

e

only

ou

tdo

or

clie

nts

T

ryin

g t

o o

ffer

more

econo

mic

al p

ackag

e

TELENOR 8 8 8 9 7 7 9 7 9 8 9

MOBILINK 7 7 7 9 6 6 8 6 8 8 8

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Degree of difficulty

This sub stage helps the firm to evaluate that what is the degree of difficulty that the firm has to bear when it

intends to offer the technical descriptors it has planned for. It is our finding that Telenor feels that it is very difficult for them to offer the customers with a number of

their choice under the prevailing PTA rules and regulations. Another difficult task that the firm feels is to

constantly enhancing the international connectivity opportunities.

However Telenor feels that they feel at ease when it comes to follow the PTA security procedures as

compared to other technical descriptors.

Target value

Target value helps the firm to establish a base level that they have to use for comparison when they are

comparing their current level of technical offerings. The interviews that we conducted during this project have

also helped to determine the target value for Telenor.

Telenor feels contempt when they are comparing the level of current technical offerings such as the

installation of the best possible billing solutions, procedures already adopted for the provision of number on

will, voice monitoring through third party , innovative value added services, enhancement of data rates and

marking the out door traffic areas are concerned.

That means that the firm feels that it needs to work on improving the quality of services and on efforts to offer

more economical packages.

Absolute weight

The absolute weight for each technical descriptor is determined by taking the dot product of the column in the

relationship matrix and the column for importance to customers. It is our findings (after appropriate computations) that the absolute weight of following the PTA security

procedures is the highest followed by the importance of voice monitoring through the third party.

At the same time relative weight of trying to offer more economical package in the presence of quality

parameters is very low. Thus it again proves our point that there is a shift observed by us in this research from

a desire of economical packages towards quality enhancement.

Relative weight

The relative weight for each technical descriptor is determined by taking the dot product of the column in the

relationship matrix and the column for absolute weight in the prioritized customer requirements.

The pattern is the same as that of the absolute weight which is that the weightage of following the PTA

regulations is highest followed by the monitoring of the voice of quality by third party and aggressive

approach towards expanding the network.

Higher absolute and relative ratings identify those areas where engineering efforts need to be concentrated.

The primary difference between these weights is that the relative weight also includes information on

customer scale up factor and the sales point.

In short, more engineering efforts are required by the firm when they have to follow the PTA regulations,

monitoring the voice quality and the expansion of the network.

VII. Conclusion

Telecom sector is one of the growing sectors among the South Asian countries and especially in Pakistan. It is not only bringing in Foreign direct investment but also more competition for the existing services providers

forcing them to offer better products/services to its subscribers. At the same time market trends have revealed

that the subscribers are now asking for quality products/services in addition to economical packages. But it is

quite difficult to determine the determinants of quality of services (QoS).

In this research we have conducted the surveys from the subscribers in order to find out the determinants of

QoS as perceived by the subscribers themselves. The main finding of this research is that customers are

inclined towards using quality products/services rather merely using economical packages. Also as already mentioned more engineering efforts in terms of enhancing quality of services (QoS) is required as far as

following PTA rules and regulations, voice quality and expansion of network is concerned.

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VIII. References

Delgado-Hernandez, D. J. , Bampton, K. E. & Aspinwall, E. Quality function deployment in construction.

Construction Management & Economics; Jun2007, Vol. 25 Issue 6, p597-609, 13p.

IP, Barry. & Jacobs, G. 2006. Quality Function Deployment for the Games Industry: Results from a Practical

Application. Total Quality Management, Vol. 17, No. 7, 835–856, September 2006.

Larger, T. 2005.The industrial usability of quality function deployment: a literature review and synthesis on a

meta-level. R&D Management 35, 4, 2005. Blackwell Publishing Ltd, 2005.

Pakistan Telecommunication Authority, 2008. Annual report 2007-2008. [Online]. Available at :

http://www.pta.org.pk.

Raharjo, H., Brombacher, A. & Xie, M. Dealing with subjectivity in early product design phase: A systematic

approach to exploit Quality Function Deployment potentials. Computers & Industrial Engineering; Aug2008,

Vol. 55 Issue 1, p253-278, 26p.

Tidd, J. & Hull, F.M. 2006. Managing service innovation: the need for selectivity rather than ‘best practice’.

Journal compilation 2006 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350

Main St, Malden, MA, 02148, USA.

competitive analysis of gsm based cellular services providers in pakistan using house of quality

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