Jazz, the current telecommunications leader of Pakistan’s domestic market, operating under the VEON Group faces some challenges when it comes to the general environment. Following is an analytical account of the general environment of Jazz.
Jazz, a telecom company of Pakistan, is the market leader in the arena and has been part of the sector for the past 20 years (Exhibit 12). Offering a complete ecosystem to its consumers through Jazz Cash, Jazz Super 4G, and Jazz WiFi Devices (Exhibit 1). With the mantra of "Dunya ko bata do" Jazz aims to fully garnish the growth and connectivity index of its users. An undisputed and undeniable market leader with the established repute of being the biggest mobile operator in the region.
Through integrated and cutting edge communication solutions, Jazz is Pakistan’s strongest telecommunications brand, with the largest value-added digital services portfolio. The company’s mission is to digitize Pakistan and equip the consumers with tools that are a must to excel in the digital arena. Jazz, with the 40% customer base in the market, bridges this digital divide through the tactics of its own. The core values of Jazz, drive the company towards exploring new avenues of market success chiefly being: truthfulness, innovation, customer obsession, collaboration and entrepreneurship.
With the innovation potential yet at hand and the creativity index high,
Jazz a domestic organization having attained an exclusive status due to its operations within Pakistan tackles the challenges in its general environment well to ensure efficiency and effectiveness on the end of the company. The VEON groups domestic and global operations have been highlighted in (Exhibit 2). Jazz falls under VEON group, that is an “integrated telecommunication service operator globally.” (Exhibit 11)
2018 political scenarios of Pakistan and policy changes witnessed ahead made the environment more competitive for the leader. Jazz Mobilink was called for a tax evasion prosecution by the government of Pakistan where the government claimed “Jazz Mobilink has imported Lead Acid VRLA Batteries for Telephone Exchanges” also mentioning that they have foregone and evaded taxes under PCT headings.
Jazz has countrywide associations with different legal entities that inculcate: “Islamabad Chamber of Commerce, the Association of Corporate Counsel, International Telecommunications Union, GSM Association, World Business Council for Sustainable Development, and Overseas Investors Chamber for Commerce and Industry” (Exhibit 4)
An infringement report by the FBR, on the importer, estimating that Jazz was to pay a total of 300 million PKR in short. Company did not have anything for its defense hence did not deny this audit statement. Therefore, Mobilink Jazz had to pay the due amount in short paid taxes. Apart from this Jazz, Mobilink was declared sole SMP operator in the Telecommunications Market of Pakistan back in 2014, which imposed upon it the anti-competitive practice regulations. The reason being; Jazz Mobilink was charging customers Rs 2 per minute on off-net calls while the other competitors were charging Rs 1.25 per minute.
Mobilink Jazz was doing this due to the consistent and traditional customer base. PTA recognized this as an anti-competitive practice. Imposing the SMP regulation which starts at 25% market share, PTA asked Mobilink Jazz to decrease all its off-net package prices to the market level pricing. Recently, Telenor has also crossed the 25% market share in the Telecom sector, it is to be seen if the PTA will declare Telenor an SMP Operator too.
Economic factors play to a company’s benefits or against them. Especially in the case of Jazz, better yet the telecommunication industry: interest rates, taxes and inflation are key factors determining their success. Such expenses affect the pricing per plan that is offered to consumers and thus, in turn, reducing the amount of profit left to build towers and resources- yet what Jazz can be proudest of is the fact that their signals go to the most remote areas of the country in comparison to their competitors like Zong, Telenor and Ufone.
The economic growth of Pakistan compels the telecom industry to up their game and hence due to which Jazz decided to use their extensive power as the market leader to spread their newly released 4g networking into the market, wherein high-income cities, it is a necessary feature for both students and office workers alike, with the growing need in the market, Jazz has been able to achieve its optimum positioning and built their blue ocean where they’ve created value innovation, and thus this is where the technological sphere of Jazz comes in.
Due to the religious viewpoints of the consumer base Jazz has to keep up with them. Hence leading to tamer adverts. The class differentiation in the market is a key focus, which is clear in adverts (English adverts for the upper class). Jazz is the preference of diverse consumers. For example, In Sindh region, the company’s advertisement and build boards are in Sindhi language and cater to Sindhi culture.
“Mobilink Jazz offers different plans that cater to the needs of a diverse group of people who range from students to businessman to housewife to multi-corporate organizations.” Mobilink Jazz offers prepaid, postpaid services for call/voice and data. Their pre-paid connection and post-paid customer base is the largest one available in the country, thus explaining why they are the market leader. (Exhibit 6)
Launch of Jazba a pre-paid solution for Pakistani youth, concerning their ever-changing and evolving needs and desire to be more connected. Programs like Jazz Octane, meet the needs of the Urban market segments.
In the domestic sector, it targets housewives through the “ladies first” campaign. In this service, they provide long hour calls at low rates with recipe tips and free shopping within their budget. Pakistani place a lot of importance and patriotism in their most loved sport: Cricket. Which is why Mobilink Jazz is also the cellular partner to the Pakistan Cricket Board. They launch a new slogan during cricket season. (Exhibit 5)
The core strategy at Jazz is about sharing value and enhancing the value of the business through identification and sharing of problems which intersect with the business. The shared value principle combines the strengths e.g., technology, infrastructure and innovation along with the subscriber base and the customer outreach program alongside the critical stakeholders to maximize the value and generate synergy through the provision of value for the community and all parties involved.
The environmental mantra is operations through “Shared Value Framework,” whereby which the company focuses on 4 key aspects:
Catalyzation stakeholders in public sector
Maximization of SROI
Alignment of business programs with CR Objectives
Social and Business Innovation Leverage
With the fundamental principle of social and economic development being at the core of the company, volunteer activities by the employees are motivated to create growth oriented communities. The CRPs not only assist but also drive community mobilization, baseline studies, impact evaluations and project monitoring. Disaster struck areas were also sent to the humanitarian relief caravans alongside involvement in other great initiatives in remote parts of the country.
Being a GSM contractor and first Telecom operator in Pakistan, the company offices got “green office,” certification after passing the WWF Green Office Audit, after a considerable decline in Carbon footprint. To counter the environmental threats from telecom competitors in Pakistan, Jazz acquired Mobilink the first GSM operator in Pakistan. Achievement of the 8th Annual CSR Excellence Awards 2015, by the Pakistan CSR Association, took Jazz to new heights in its environmental operations and framework.
Political factors
Any political changes will affect all types of industries in Pakistan but when it comes to the telecommunication industry, its effect is not that much. But there are some cases in which they do like, for example, when the Chief Justice of Pakistan abolished all kinds of tax on calling cards, Mobilink Jazz had to abide by it because they have to comply with the regulatory authority who, in their case is PTA. Jazz tries to keep good relationships with important stakeholders such as the Ministry of IT&T, who are responsible for the development of the telecommunication industry. Currently, Pakistan is trying to go digital in term of cash transaction as China. A website called “digitalpakistan.pk” is promoting it and Jazz is sponsoring it.
Economic factors In Pakistan rising unemployment is leading to an increase in poverty. Mobilink Jazz is catering to the mass market which means both the poor and the elite. Which is why the services (4G) and products they offer are divided to cater to all these segments. Not only that, but Jazz is also collaborating with National Incubation Centre of Pakistan to help young entrepreneurs with around 20+ startups with the help of events like Jazz SDG Hackathon. Mobilink Jazz’s focus has shifted towards digitalizing Pakistan which is why they started jazz smart school which provides education via the internet.
Socio-Cultural factors
Pakistan is a developing Islamic country and Jazz keeps this factor in mind when promoting themselves. For example, the publish and air their advertisement in English when targeting to the Elite. Pakistan’s cultural changes have also affected Mobilink Jazz in other ways. Because of CPEC, the influx of Chinese employees has changed its recruitment ways and packages for the youth as now there is more diversity.
Technological factors
The company does recognize that WhatsApp, Facebook Messenger etc. do pose a major threat to the company’s future. This software’s certainly have taken the Online world by storm. If a person has paid for an internet connection, he does not need to pay bills for sims to talk to anyone, he can do it free of cost on WhatsApp or Messenger, denying the need for mobile sims. Hence, the company has decided to digitize its internal network, and the company is going to expand its jazz cash business and keep growing it since its already the biggest incentive of this sort in the country and has a rather bright future. Jazz is also planning on launching Mobile Finance apps although in the future.
Legal factors
Data Protection and Data Privacy are of the utmost importance to the firm (Exhibit 8). The company implements strict checks and balances to prevent data theft and other such threats. This data is inaccessible to the employees of the company thus they can’t spy on you except for under court orders where they’re bound to share the respected data to the authorities.
Environmental factors
Environmental factors are not much of an issue to Jazz since it’s not a production plant. Still, the administration promotes environment-friendly activities like Tree Plantation exercises. Then they also use a very low amount of paper and keep all their documents on the cloud, to reduce tree cuttings. WWF also awarded jazz for being a Green Organization, and the Shaukat Khanum CSR Award (Exhibit 9).
Jazz, a market leader in the telecommunications realm. Pakistan’s very first GSM operator. The network distribution is widespread. Jazz is becoming a part of Pakistan’s entrepreneurial ecosystem by serving the SDGs that aim to alleviate the nation from poverty, making it a digital landscape. With cut-throat competition through below the line and above the line promotional mediums, Jazz runs ahead of the other companies. The resources at Jazz disposal are plenty to sustain it through a bad economic situation in the country. Jazz has recently won the Ookla Speed Test Award with a rating of 17.3 (Exhibit 10)
In the past decade, the competition has been immense for Jazz, raising critic on its market position. Telenor came up with Easy Paisa, whereas Zong with 4G so the innovation index of Jazz is at the question. Busy network and national turn-down of services raise a question for Jazz revenues. When it comes to Jazz, the company is not innovating in terms of the services that it is providing to customers rather its focus is on the digitization of Pakistan. Due to the new political scenario, Jazz cannot charge taxes which primitively used to raise the company’s revenues.
Considering the current market scenario, Jazz has done well by traversing towards data because of the high demand. A total of 2.34% of people in Pakistan are mobile users. The new government offers an opportunity in terms of providing a budget for this industry. The share grab of customers is seen as a threat by most telecom companies, but we see it as an opportunity, as we cater to different ecosystems in the process that has given Jazz a new market position overall.
There are three competitors of Jazz: Telenor, Zong and Ufone. The companies offer cut-throat competition and aggressive adverts about service promotions are a threat. Like the recent Telenor hoarding of “na daaenna na baaen, seedha Telenor pa aaen” led to a negative promotion for Jazz. Substitutes and increased customer preference towards IoTs serves a threat as well.
Jazz has a different mantra overall than the competitors out there. The telecom market is saturated, as there is no significant growth in the revenues. With the competitors coming up with rapid voice, data and service price cuts, alongside a cut-throat competition to grab the market share of the leader, Jazz counters it daily With the mindset of above the line and below the line, Jazz has managed to grab the greatest subscriber base. But now it wants to digitize Pakistan. Increasing collaborations with the Ministry of Information Technology, and the PITB and KPITB, Jazz is coming up with programs that upskill the digital potential in the public.
With the current focus on services like agricultural services, whereby Jazz provides Farmers with the facility to stay connected, and advances like M-Wallet and Finance Applications Jazz is sustaining its competitive advantage via innovative realms. This allows Jazz to turn towards a diverse consumer base, hence raising its responsiveness towards wider customers. Jazz fosters innovation via internal company dealings. It focuses on enhancing the intrapreneurial potential of the employees, especially entertaining the ones who have cost-cutting solutions for the company. The organizational culture promotes kindness, care, transparency hence allowing it to raise its organizational performance. Jazzfoundation.com.pk focuses on core projects relating to Education, Disaster Relief, Health and Environment.
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Jazz Representative Islamabad, Interview Transcript Exhibit 13
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