The recently released PTA report on cellular subscribers showed ZONG as the clear winner for the third quarter of 2010, with a net addition of over 740,000 subscribers in the period.
This brought the total number of subscribers under the company to just around 7.5 million. If numbers were the only way to analyze companies, one would certainly have to commend ZONG on its performance. However, if you put aside quality and other metrics, the company has truly proven how a clear vision in market segmentation can help to establish a base of one’s own.
It was in 2008 that the disturbed and troubled carcass of PakTel was bought out by China Telecom, making it the first international endeavor for the Chinese telecommunication giant.
With over 500 million subscribers, China Telecom is regarded as the largest cellular service provider in the world, followed by Vodafone. While the latter is spread over several countries and continents, the former has been largely concentrated to its home country.
In the 2 years since its foray into Pakistan, China Telecom has invested over $1 billion into establishing itself and its brand, and it seems that some return is slowly starting to creep in.
For PakTel, the trouble lay in the lack of resources available for the company to innovate its systems, which was essential in the eye of increasing competition from Mobilink, Telenor and Ufone. However, that has not been an issue for China Telecom, which has ensured that Zong remained as innovative and competitive across all fronts in the Pakistani market. The differentiator, however, is the vision with which Zong has approached the local market; segmenting down to the low income users and ensuring that the packages it promotes provide the most benefit to these users.
This approach symbolizes a lack of aggressiveness on part of Zong against its market competitors; at least not directly in the established segments of the market. While the company offers an enhanced portfolio including Blackberry services, its focus appears resolute to the far-flung areas and the consumers seeking more value out of little. The company seems content on keeping its creativity locked on finding ways to gain loyalty from this segment. And we can witness this in all their communication.
The credible factor is that it is paying off for the company. People are responding in the positive and in the droves. They did that when Zong opened its operations promising everyone their personal choice of numbers, and while that may not be the case every day now, the company’s consumer-centric offerings are keeping its subscriber base quite steady. Furthermore, an informal survey of consumers reflects that Zong is commonly referred to as ‘China Mobile’, and viewed as cheap and low-quality. However, for the masses who are already burdened with daily expenses of survival, the brand brings a link between their needs and affordability. Handsets and double credit; all I need to remain in touch longer.
Kudos to Zong for finding their customers and addressing the needs in packages, hardware and communication. One hopes that this remains a long-term vision of the company, allowing many more from the rural areas to ‘Say it All’.