Article on Nepal Telecom Namaste GSM Service

NEPAL TELECOM

The telecom industry in Nepal has long been dominated as a monopolistic market by Nepal
Doorsanchar. However, this scenario changed more than a decade ago when UTL and later Ncell
(formally Mero Mobile) entered the market. Since then the Nepalese telecom industry has been
dominated with the two major companies, NT and Ncell. Nepal Telecommunication Corporation,
transformed to Nepal Doorsanchar Company Limited on Baisakh 1, 2061, as of 2069 B.S the
corporation still had government shareholding of 91.5%. Nepal Doorsanchar Company Limited
is a company registered under the companies Act 2053 and known to general public by the brand
name Nepal Telecom (NT). Nepal Telecom has always strived to provide quality service since its
inception and achieve this goal. NT has pursued to implement technologies that meet the interest
of its customers. As a result, NT today has a nationwide coverage and provides services at an
affordable price. Yet still NT has been facing a harsh criticism from the consumers regarding its
service consistency. To be competitive enough, it requires timely innovations, upgrades the
service and needs build unique equities so as to increase consumer base.
To address the need and choice of the different categories of customers and stiff competition
from its rival Ncell, NT has launched multiple product brands as a result of process to upgrade its
services to be a leader in the competitive market. This motivated NT to introduce advance
services and competitive pricing to de-motivate the switching to Ncell. Also, it is required as the
consumers need changes with time. With the extension in the brand portfolio, NT has tried to
maximize the market coverage so as to increase the potential users and to minimize the service
overlap such that there is no cannibalization. This way NT has been able to increase the
shareholders value every year. NT has been into existence and serving the customer from more
than a century thus has created a corporate brand image of having reach to maximum geographic
locations, reliability with Government investments, infrastructure and service. The tagline
hence, gives a feeling of patriotism and reinforces the values towards development of
the country.
The market segment for NT can be categorized based on Demographics and Psychographics
aspects. NT has targeted multiple segments in the market. The first segment includes young
individuals with middle level income who prefer to have value for money services. The second
group includes individuals who prefer to have nations own service provider, these group mostly
include middle and old aged people who has been using the service for a long time and are
reluctant to change the service provider. The third include professionals, business people and
government officials availing the postpaid service that reflect integrity, success and trust,
compared to NTs rivals. NT has positioned itself as a brand for consumers who prefer mobile
cellular service at affordable price with no hidden charges. The brand is constantly trying to
position itself where customer can relate to it as Affordable, Dependable and Creating
Bonds

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Article on Nepal Telecom Namaste GSM Service

NT along with voice provides SMS, voice mail, international calling, CRBT, mobile internet
service national and international roaming in prepaid service with added plans like Corporate
Connection plans and Family and Friends call (FNF) in postpaid category. NT in year 2003
launched third generation (3G) mobile service in both its postpaid and prepaid plans. To avail
these facilities, the consumer first needs to buy and subscribe a SIM card. NT pricing strategy is
focused on achieving cost leadership, offering service at competitive prices than competitors
which is made possible by the economies of scales that it controls.
NT delivers the service via nationwide GSM network infrastructures with fiber backbone in most
of the regions. The SIMs however are distributed centrally form NTs offices and 184 branches
through the country with minimal sale for distributors and representatives to comply with the
national laws. The Recharge card on the other hand is widely distributed from various retail
outlets retail outlets, online, ATM outlets and new methods of pin transfers.
Nepal telecom has been using wide variety of promotion tool to reach its customer in every
corner of nation. Print advertisement and radio jingles are mostly used to communicate their
message. Other IMC tools TV commercials, point of sales advertising and online social media.
NT has also been actively engaging in sponsorship of national sports and cultural programs,
participation in trade fair and exhibitions for the new customer and existing customer to promote
their product and provides seasonal promotion providing discounts mostly during festivals.
A survey conducted in kathmandu showed that 100% of the respondents were able to recognize
the NT brand of which 62% were able to recall it when the product / industry category
(telecommunication) was given as a hint. This response showed that the brand NT is easily
recognized and is on top of consumers mind recall. Most individuals surveyed elucidated the fact
that they were aware of the brand as a result of using its product on their own or else getting to
know about the brand from the marketing campaigns used by NT. Amongst the few campaigns,
the highest proportion was garnered by print advertisement with 27% respondents
attributing this medium for helping them to recognize or recall the brand respectively.
Most of the respondents associated the band logo of Namaste.
When asked, When you think of NT, what comes to your mind, people responded as Nepali,
Namaste, Cheap, Poor quality, Slow on innovation, etc. Beneficial, enjoyable, superior and a
value for money brand were major facets of NT which the consumer could relate to. The most
scoring variable was the value for money variable which saw a score of 3.82 showing that the
consumers accept the current pricing strategy and are able to relate to it. We also observed that
consumers perceived NT to be down to earth, honest, and cheerful. Performance of NT is on
average; the survey result reveals that customers are not so satisfied with the quality, of NT. The
performance survey shows that customers appreciate NT due to its strategy of cost leadership.
Consumers personal opinions about and evaluation of NT which they formed by putting together
all different brand performance and imagery is pretty good. Regarding the quality of NT Prepaid
Mobile Service, it was evident from the way respondents ranked NT Prepaid Mobile Service in
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Article on Nepal Telecom Namaste GSM Service

terms of tariff, network availability, durability, and reliability. The brand is associated as being
traditional to consumers as this has been the brand with which most have grown up with. In other
words, respondents basically connected the words Bonding, Relationship, Dependable etc.
with the brand. NT has been the foremost sponsor in CSR events such as Bagmati Cleanup Event
to promote itself from just being a business to more of a corporate citizenship. Doing so further
has created a bond between consumers and the brand as there starts to be a sense of belonging
and knowing that the money they spent is somehow being used to create value towards the
society as a whole.
With two major competitors in the market NT has been losing its market share to Ncell on the
front due to better quality of service and huge promotional activities conducted by Ncell.
However, NT still holds its grasp in the market as the revenue has constantly been increasing in
the past years. Further, Ncell has been the only preference to the consumer when NT is
unavailable and vice versa. The survey has also highlighted the perception of consumers towards
NT and Ncell as to where both the competitors stand. As NT is preferred over Ncell due to the
price and relation it has with its consumers whereas Ncell has been gaining ground due to its
superior quality of service.
NT has loyal customer base. Even though the comparative prices are higher for its services,
customers are ready pay for it. Further, as the mass of Nepal is middle class or below NT has
been able to position its products cater the mass market in Nepal which has helped NT to attain
such continuous growth even after such aggressive promotion of Ncell. Due to the strong brand
name of the company, people have been able trust and are loyal towards the company. It will not
have any problem in introducing its products and technologies in the new market as being a state
owned business there is a sense of reliability and trust that its biggest competitor lacks.
Through the survey it can be clearly seen that NT lacks quality in service they provide to the
customers and this is one of the major factor which Ncell has been able to capitalize on and gain
market share. Therefore, it is highly recommended that NT improve the quality of service
currently being provided. Further, NT also needs to improve on its secondary attributes such as
customer care, additional services such as call waiting, missed call notification etc.
Focus on innovation both in product and services as well as marketing activities such that the
brand is highly recommended so NT is able to rejuvenate with the current generation. NT further
needs to create awareness in terms of new products and services by engaging in more
promotional activities and advertisements. Also to maintain its competitive advantage Nepal
Telecom needs to enforce its current strengths that they have as a brand and need to reinforce it.

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