Marketing Task for Omantels Mobile - Business Plan Example

Table of Contents

Executive Summary3

MARKETING PLAN TASK FOR OMANTEL’S MOBILE BUSINESS

• Executive Summary

For over the past few years, the mobile segment has been the primary growth driver for Omantel’s revenues. Being an incumbent provider in the market, and operating as a monopoly for a long time, it has a rich and established telecommunication network that forms the backbone of the nation’s network. However, based on the high level of competition in the industry, the market has evolved to become segmented as businesses strive to maintain a constant growth and market share (Morton & Zettelmeyer, 2010). The paper identifies that for Omantel to develop a marketing plan geared at increasing market share and continuous growth, it needs to enhance its mobile coverage network across multiple segments of the economy. In addition, it can also reduce costs associated with upgrading and maintaining its current technology by leveraging emerging technologies. Evaluation and control strategies for these plans could be enhanced through critical analysis of Customer Experience Analytics, which are essential in driving customer care operations.

Current market and company situational analysis

Omantel’s mobile business has continued to dominate the company’s revenue and market share. As of 2015, the company’s mobile business revenue share in the market stood at 61 per cent, while its fixed revenue share in the market was 83 per cent (Morton & Zettelmeyer, 2010). This has made the mobile segment the primary growth driver for Omantel’s revenues over the past few years.

SWOT Analysis

Strengths: One of Omantel’s major strength stems from its position as an incumbent provider in the market. Therefore, it has a rich and established telecommunication network that forms the backbone of the nation’s grid (Haider, 2013). Secondly, is has a strong management that promotes organizational transformation and business process reengineering. Further, it has an established revenue stream based on its political connections to the government.

Weaknesses: Omantel has a legacy of poor customer service, thus leading to constrained customer relationships. Lack of reliable data and the adoption of substandard business analytic tools limit its customer analysis process (Business Outlook, 2015).

Opportunities: Well managed competition has the ability to allow continuous business market growth due to increased level of focus. Since the industry’s liberalization in 2005, the company has been able to double its revenues (Lawrence, 2012; Morton & Zettelmeyer, 2010). Increased revenue opportunities based on high innovativeness in the industry that leans towards heavy market segmentation. Consequently, Omantel can differentiate its product offerings to a wider consumer base.

Threats: High level of customer migration based on competitive tariff prices and low switching costs in prepaid mobile sector. Additionally, there has been an increase in regulatory initiatives by Gulf States that are geared at increasing liberalization and ease foreign entry for a sustained economic growth (IBP, 2014). Such initiatives may pose a threat to established operators in the long run.

PESTLE ANALYSIS

Political: Since its inception in 2002, the Telecom Regulatory Act (TRA) has continued to promote competition and increase innovativeness, as the country aims to reduce its dependence on the oil economy (Michael & ‎Mimi, 2014). The government’s issuances of full service licenses to operators has also led Teo, another telecoms company, plan of joining the market to compete with Ooredoo and Omantel, to fill the demand for broadband and bundled services.

Economic: The global challenge of declining oil prices and Oman’s declining reserves has caused an urgency to diversify economically, as gas and oil revenues accounted for 50 per cent of the country’s GDP (Business Outlook, 2015).

Social Factors: Telecommunication has become an integral part of social lifestyle, with the average revenue per person (ARPU) rising from OR7.42 to OR7.68 a month from 2014 to 2015. Internet also continues to shape social lives; with a mobile data penetration rate of 74.21 per cent. In 2015, there were 3.1 million active mobile data subscribers, which grew from 2.7 million users from a year earlier (Business Outlook, 2015; Morton & Zettelmeyer, 2010). It is expected that by 2040, all businesses and homes will be connected by the national broadband network and the increase in fiber infrastructure, as internet demand sores. Over the past four years, population growth has been over 8 per cent in Oman.

Technological: Fixed line subscriptions have been on the decline, which include traditional telephone lines, and public telephones. Growing amount of digitalized content and apps has also increased mobile internet usage due to cheaper smartphones and accessible network (Steffen, Giacomo & Marc, 2013).

Oman’s mobile telecom sector is intensely competitive consisting of two established operators and other “reseller” players. The country had an approximated 6.4 million mobile subscribers, as of 2015, which represented a 154.5 per cent penetration.

Market Segmentation

Omantel market share dropped slightly from 48.2 per cent in 2014 to 45 per cent in 2015, while its major competitor, Ooredoo share moved from 40.8 per cent to 42 per cent in 2015 (Roxana, 2015). Mobile Virtual Network Operators (MVNO’s) share has also gained a share of the market, with a 13 per cent share, up by 2 per cent from the previous year.

Despite increasing competition in the industry, Omantel domestic revenues have been on the rise from 2009 (Morton & Zettelmeyer, 2010). The company has also experienced a robust home subscriber growth rate, which was at 6.4 per cent. Revenue of mobile broadband in the first quarter of 2015 increased by 28.5 per cent, with all three segments, consumer, wholesale and corporate recording an increase in growth (Lawrence, 2012). The smartphone penetration in the Omantel mobile network reached an all-time high of 60 per cent. This is due to factors like its youthful population, which has a burgeoning demographic, with 40 per cent of its population being below 25 per cent.

Mobile technologies, including smartphones have also become significantly affordable, thus resulting to high penetration rates. As shown in APPENDIX ONE, mobile revenue accounts for 61 per cent of Omantel Mobile market share, with its competitors having a combined share of 39 per cent.

The company has also continued to deploy various carriers for its 3G and 4G networks, ensuring that it enhances capacity and increases coverage. With a 76 per cent network modernization rate, expanding rural connectivity will be integral in improving local expansion and thus increased network subscribers (Oxford Business, 2015).

Additionally, as the future of market will heavily really on mobile data usage, Omantel plans on innovating by pushing on products like smart homes and TV’s. It will thus have the ability to leverage fully from its rich infrastructural capacity (Morton & Zettelmeyer, 2010).

Marketing Plan Objectives

Increase 4G Network Coverage from 79 per cent to 94 per cent by end of 2017.

As the demand for faster internet access continues to rise with growth in demand for data traffic, it is integral for Omantel to capitalize on increasing 4G network access. As markets become more saturated, more revenue-generating metrics should be created that become key differentiators enabling digital ecosystems (Morton & Zettelmeyer, 2010). In the long term, increased high speed access to its network places it at a strategic position in the market, which results to a high demand for its mobile data subscription.

Increase market share from 45 per cent to 48 per cent by end of June 2017.

While numerous regions in the world are recording a slowing fixed line growth, Oman’s segment still continues to record growth, mostly attributed to its innovative operators. The number of fixed line telephone subscribers had increased from 362,000 in 2014, to 402,700 in 2015 (Roxana, 2015). While Omantel’s larger share of its revenue comes from its local market, it should leverage its established network infrastructure as an incumbent provider in the market.

Reduce operational costs by 3 per cent by Dec 2016.

In order to maintain a competitive advantage and leverage its brand value over its customers, Omantel needs to enhance its mobile coverage across all multiple segments. With data traffic expected to rise 11 times in the coming 5 years, evidently coverage and capacity building of networks will be very essential (IBP, 2014). To reduce costs associated with upgrading and maintaining existing technology, Omantel can leverage emerging technologies like small cell solutions, which is easy to deployment and agility. Machine to Machine connection is also another core technology that Omantel can utilize to reduce costs. While the company had recorded a growth rate of over 7.5 per cent, the expenses had increased by 12.7 per cent, which resulted from lack of innovativeness in its implementation strategy.

Marketing mix strategy recommendations

Omantel should differentiate on its product offerings to include an Omantel handset, which would boost its bargaining power with the manufacturer and increase product offering. As the industry moves towards heavy market segmentation to maintain a competitive advantage, introducing an own-brand handset would create a strong reputation and develop an added value to its consumers (Oxford Business, 2015). In the telecommunications sector, portfolio differentiation is paramount in attracting and retaining customers based on the dynamic nature of the market and innovativeness. Introducing an Omantel- handset is expected to attract more customers, create a differentiation factor and stimulate more data usage in the market.

Increasing the number of contact centers to facilitate its customer relationships. Historically, Omantel had been operating as a monopoly for a long time without facing any competition. Therefore, customer response was slow and the company had not yet developed innovative ways to approach those needs efficiently (Oman, 2013). However, from 2005, after the first competitor stepped in the market, the need to become more agile and customer focused arose from increased competition. The company has still not managed to completely transform the prevailing legacy mind-set into a performance based culture. The current market is also experiencing a high level of disruptive competition, where established and pioneering companies are still facing competition from nimble disruptors, bringing their ROI under pressure. Omantel, thus, needs to develop a degree of organizational agility that is capable of adapting to changing customer needs (Michael & ‎Mimi, 2014). Government bureaucrats sometimes push back the initiatives of the company, based on a long history of a ministerial legacy. To compete with other service providers in the market, it must adopt a responsive and dynamic organizational structure that blends with the nature of the industry. In a bid to revitalize its brand image, also, ensuring high levels of contacts are maintained with the client creates consumer confidence.

Evaluation and Control

This stage is integral in determining how well the promotional program meets communication objectives and accomplish overall marketing objectives. One of the best ways that Omantel can enhance its evaluation and control strategy is through is via critical analysis of Customer Experience Analytics (Roxana, 2013). For the company to deliver a superior customer care experience, it needs to obtain information on market trends, customer usage patterns and network utilization statistics. Omantel’s business, network and customer can thus be integrated into one centralized component and produce easy to use analytics. This will allow the company to analyze a wide array of data to improve customer experience and satisfaction. Since the 19th Century, the same customer cantered approach has remained the most effective marketing practice (Morton & Zettelmeyer, 2010). It is therefore essential to make use of businesses that turn data into real time intelligence to ensure maximum customer satisfaction.

Social media analytics are also useful in marketing; due to the contextual interactions they provide to customer interactions, thus enhancing customer experience. The collected information would allow Omantel to sharpen their social media strategies with personalized customer engagements and track performance throughout the customer’s journey.

In evaluating market segmentation of a telecom Michael and ‎Mimi (2014) argue that the use of data subscription numbers as metrics can offer an exaggerated statistic of an operator’s truly active subscribers. Despite customers having access to the use of that data, most of them rarely use it or don’t use it at all.

Budget

Medium

Total

Social Media (Blogging, Facebook, etc)

2,500

Print Advertising

5,000

Search Engine Marketing

2,000

Online Advertising – digital magazines, email

3,500

Online Video

800

Public relations

5,000

Mass Media – Radio

30,000

Mass Media – Television

100,000

Website Redesign

1,300

TOTAL

150,100/=