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

corporate

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.


  • Saad Durrani

    No one is noticing but the shuffles at Telenor and Warid are happening almost on similar days.

  • Nice observation Saad.

    The market is not large enough for this many number of operators to exists. PTA has on a few occasions also highlighted this.

    A merger or acquisition is definitely inevitable.

  • Unman Q

    This is most interesting because the performance of these two companies. Both telenor and Warid are losing money and changing the whole management in such a short time is probably a result of getting ready to fire many people and reduce cost! It is easier to be less emotional if you don’t know the people you are firing.

    I predicts telenor will have a big redundancy program before the middle of the year, in technical! HR and Commerical

  • umair

    guys grow up Telenor has its Ceo and Cto and CMOs for a set time period .. after that rotation has to occur and that is what happened.. stop creating all hoobla :P

    • Carl

      But to make so many changes at the same time is typically a sign of failure! Also I hear that many people haven been sent to work in HR as they have lost their position in technical

      • Saad Durrani

        So many changes does not need to spell “FAILURE” anywhere. It only means “CHANGE”.

        Please keep in mind that Pakistan really requires an upgrade in the current GSM technology. We need to start implementing some kind of 3G or 4G upgrade. That would only come if top echelon knows what they are doing.

  • umair

    and who said telenor is losing money .. rofl .. they made more money than ever before lol … and hiring was frozen for long it just opened up :S

  • Saad Durrani

    I do not think Telenor is losing any money. I think people who are seem to desperate for money is Ufone. Too many packages, too many non-sense gimmicks.

  • g3

    Rotation/change is an essential part of growth. It is also an important ingredient of management careers and plans.

    Reshuffle Case of Telenor. CEO remains a CEO and moved to another Telenor venture in Thailand.

    CTO moved to next level. After serving Telenor Pakistan for 6/7 years he is now moving to Telenor Group Head Office in Norway. It’s indeed a recognition of his services.

    CSO/VP moved to CMO/VP Commercial position within Telenor Pakistan as the previous moved as VP Commercial for Asia Head Office for Telenor Group.

    All these rotations are part of normal exercise for change and growth. They are being made after every 2 years.

    I don’t know what was going in mind of Fawad when he wrote this piece. It’s a duty of every writer to first investigate a story/lead and then write something.

    Creating a hype for nothing will not serve the cause.

    • Truthless

      It is a bit more complicated than that. The out going CEO had not commitment to Pakistan he had to run away becuase he was nervous about security. The old CMO was never there and Aamir had to take over. The new CEO is very old and will most likely stay for only a year while they look for a more permanent person. The CTO is not going to Norway – he is going to swap with the new incoming CTO in Europe.
      ry

  • Raza

    PTA has screwed the industry by offering 5th license to ZONG

  • It may not be taken in -ive way. Movement of seniors show a healthy sign of organization who moves their seniors in within the group. I must say CTO is very capable in the industry and already served in Telenor Pakistan more than 6 years so he should avail this opportunity to work in the Telenor group (Head Office Norway).