Ins and Outs of CEOs, What are Telecom Companies Up to?

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The local business market has for years worked on a top-down approach. What it signifies is that the initiatives and operations tend to come into play within organizations from the senior management, with little to low incorporation from the general staff. In fact, the old-age software development principle would also share this trait; create the application without taking into account the needs of the end-user.

2011 has awoken with news of moving and shaking in the management of cellular companies across the industry. While some remain still to be confirmed, analysts have begun to look at implications that the changes could have over the operations of each change, as it has been rare for new management to continue with the vision of their predecessors.

The first wind of change is with Telenor, which has announced its new CEO, CTO and other reshuffle at VP level management. Prior to the announcement, a lot of chatter pointed towards a local company loyalist finally assuming the role of the head honcho at the telecom giant, but it seems that the Norwegian owners still feel the need to have an expat in charge.

One of the reasons for this could be keeping a synergy within the group over the operations and strategy; Telenor has strived to incorporate a different culture within the corporate fabric of Pakistan, and it is unlikely to be replicated with the same ease by other personalities.

After all, a strong understanding of the tried-and-tested system of the company is essential to growing the portfolio.

At this stage, analysts are little reluctant to comment, but are surely thinking of this massive reshuffle at Telenor’s F-7 office as a sign for possible change in policy, strategy and probably the investment plan of Telenor in the country.

Only time will tell what Telenor is up to, but it would be a different company than the one we have been witnessing for last 6 years. Let’s not rule out the influence and impact of Uninor’s experience in India, which has made Telenor lot more careful now.

Warid’s dilemma remains the talk of the town. Rumored to have been at the brink of acquisition, something denied again recently by the top management, it seems to be pushing away all conflictions by bringing back their old CTO and retaining all current staff.

However, analysts have not been able to identify a particular market strategy from the company or its management. In the cut-throat price war among all operators, Warid has taken a subdued approach by stepping away from the main fight and letting the three big guns go all out.

Its share of subscribers has taken a hit across 2010, and the probability of merger cannot be ruled out in terms of the overall market condition. A 15% salary rise announced recently could end up being the last sweetener for 60% of the management and staff, should some M&A activity transpire.

Local cellular leader Mobilink seems to be holding steady on all corporate levels. There has been little to no change in management over the last year, and the company has managed to stay at the top of the revenue and subscriber numbers.

However, with Orascom Holding looking to hand over to Vimpelcom as soon as it clears regulatory and legal hurdles, analysts are expecting a slow transition to appear, if it ever happens.

For one, the number game is unlikely to be the only factor in play as the market gets saturated. Mobilink will need to push back on innovation; something the company has become devoid of in the recent few years, prompting a ‘follower’ approach. One of the reasons often stated is the cost-cutting exercise undertaken by the company after the years of boom. But its management must realize that in today’s competitive world, research and development must continue unhindered in order to keep a strong footing when the market rises again.

Ufone’s CEO is reportedly continuing on, despite reports of a proposed move to the parent giant, Etisalat. The company has remained at the forefront of the price war, with regular promotions and offerings.

Ufone’s innovative abilities have been applauded by industry analysts, with a steady format followed for the last three years. With budding leaders existing among the Ufone management fray, it seems to be in an ideal position to ensure some long-term stability to the processes and strategies currently in place.

At the end of the cellular operator lineup is Zong. With a CEO transition expected in March 2011, the company is unlikely to see a step-up by one from local management, as parent China Mobile hopes to retain its strong control on the operations of its first foreign venture.

2010 proved to be a good year for the company, with alignment to a vision and understanding of its target market. However, one is keen to wonder the long-term approach that Zong is likely to take as subscribers start to dry up.

There is also talk of a possible sale by the Chinese telecom giant, with the possibility that another Middle Eastern owner could soon be in the telecom market after Etisalat.

2011 is likely to offer its share of complications for the cellular companies. With PTA sounding the bell on 3G implementation and subscriber market at stagnation, the need for innovation and diversification is now evermore necessary, despite the signs being present for many years.

Direction for each company resides with its leadership, and among the current crop, there is not much speculation needed to assess the change that could transpire.

Along with political and economic turmoil, disaster recovery and consumer demands have made the Pakistan market a challenge for the leadership of any corporation, let alone the cellcos. However, one hopes that a rise in proactive understanding might produce a better environment for all.