Chapter: 01

Introduction

1
1.0. Introduction

GrameenPhone Ltd. is the leading telecommunication service provider in the country

with more than 20 million subscribers as of November 2008.

Telecommunication Industry is growing in a very rapid rate in Bangladesh. In a country

where in average 233 people had a land phone, now after coming of the
telecommunication company the average has raised to less than 10 people per telephone.
This is a very high achievement for the telecommunication companies. And with over 20
million subscribers, much of the credit goes to the leading cell phone company of the
country the GrameenPhone Ltd. With their services GrameenPhone and other
telecommunication companies are helping the economy of Bangladesh. For a developing
country like Bangladesh, the telecommunication industry plays a very important role. To
serve this huge number of customers successfully GrameenPhone needs a close
collaboration with its suppliers, dealers, distributors, vendors and contractors.

1.1. Title of the report:

This report is titled as An Overview of the Functions and Management of Treasury

Unit of GrameenPhone Ltd.. The report consists of two-fold purpose. First, An
Overview of GrameenPhone Ltd. and then discuss about the activities of the Local
Treasury Unit of GrameenPhone Ltd.

1.2. Origin of the report:

Internship program is essential for every student, especially for the students of Business
Administration, which helps them to know the real life situation. It helps them to launch a
career with some practical experience.

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Theoretical knowledge is obtained from a course of study; it is only the half way of the
subject matter. Practical knowledge has no alternative. A perfect coordination between
theory and practical is of paramount importance in the context of the modern business
world in order to resolve the dichotomy between these two.
As per norm this report is the requirement of the fulfillment of the internship program.

This report An Overview of the Functions and Management of Treasury Unit of

GrameenPhone Ltd. is the out come of three month internship at the Finance Division at
the Head Office of GrameenPhone Ltd. During this period I was assigned with the jobs
related to the Local Treasury Unit of Finance Division. I was under the supervision of Mr.
Syed Abul Raihan, Deputy Manager of Local Treasury. I have prepared this internship
report with the mentioned topic which was suggested and supervised by my academic
supervisor Ms. Sohani Islam, Lecturer, Department of Business Administration, Stamford
University Bangladesh.

1.3. Objective of the Report: The following objectives are the definite goal of
preparing the report.

1.3.1. General objective:

To gain practical job experiences and view the application of theoretical knowledge in the
real life.

1.3.2. The broad objective of the report:

To analyze GrameenPhones local payment procedure & also identify the Functions and
Management of Treasury Unit of GrameenPhone Ltd.

1.3.3. Primary Objective:

To present an overview and brief introduction of GrameenPhone Ltd.

To focus on the business and operations of GrameenPhone Ltd.

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 To discuss about the activity of the Local Treasury Unit of GrameenPhone Ltd.
To discuss about the activity of the BTS Unit of GrameenPhone Ltd.
To focus on the most resent financial improvement and market position of
GrameenPhone Ltd.
To find out the opportunity for timely payment provided by GrameenPhone Ltd.
To obtain the valid information about the overall payment procedure to the
suppliers and service providers.
To identify the products and services of GrameenPhone Ltd.
To study the customer relationship with GrameenPhone Ltd.
To provide information of my responsibilities while working as an internee.
To present some different cases about GrameenPhone Ltd.

1.3.4. Secondary Objective:

To have Knowledge on GrameenPhone Ltd. and Mobile industry.

To apply theoretical knowledge in the field.

To improve corresponding and report writing ability.

To fulfill requirement of the internship program.
To observe the working environment in multinational company.
To have some practical exposures that will be helpful for my future career.

1.4. Scope of the report:

The scope of the study is limited within telecommunication business in
Bangladesh. It is also limited within the organization of GrameenPhone Ltd. and
especially within Finance Division of the Company. Here I discuss with the topics
related to the Functions and Management of Treasury Unit of GrameenPhone Ltd.

4
1.5. Methodology:
For the purpose of the study data and information have been collected from both
primary and secondary sources.

1.5.1. Primary data:

The relevant information collected from primary sources is collected in an

informal way. My work experience in GrameenPhone helped me a lot. Besides
this, regular conversations with many GP employees and I have interviewed and
taken some suggestions orally from the personnel of GrameenPhone Ltd.

1.5.2. Secondary data:

I have elaborated different types of secondary data in my report.

The secondary data were collected from:

Annual report.
GrameenPhones official website.
GrameenPhones intranet.
Manuals and publications of GP and GSM Association.
Monthly financial newsletters of GP.
Monthly newsletters of GrameenPhone Ltd.
Prior research report.
Any information regarding the Telecom sector.

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1.6. Limitations of the report:

Several drawbacks that appeared at the time of preparing the report and hindered the total
work process are as under:

It was difficult to make information based rich report in a short time period.
For the security of the company many information was not provided to me. So in
some case it was difficult to identify the actual condition of the company.
It was very difficult to identify the present situation of the organization in such a
small period of time.
One of the main barriers of the report was the confidentiality of the data.
The company does not have sufficient sources of secondary data and collecting of
data was not smooth.
Analyzing financial data is much more confusing and complicated than any other
data.
I was assigned in a unit with the jobs related to the Local Treasury Unit which is
the most confidential sector of an organization so it was really difficult for me to
accumulate confidential financial data.

Rush during working hours was another reason that acted as an obstacle while
gathering data.

6
 Chapter: 02

An Overview of
GrameenPhone Ltd.

7
2.0. An Overview of GrameenPhone Ltd.

GrameenPhone Ltd is the leading mobile phone company in Bangladesh with the largest
no. of customers to serve with. The company has a customer base of 20 million and the
number is further growing. Last year more than 8 million people made GrameenPhone
their preferred service provider and in this year the numbers of customers have reached to
20 million. With more than 81% growth the market share remained steady at 62%, even
though the overall competitive environment had considerably intensified.

Strong internationally reputed companies like Orascom and Singtel have entered to the
market in late 2004 while a fifth operator, government owned TeleTalk, also launched its
services in 2004. A sixth mobile phone operating license was awarded to Warid Telecom
of the Dhabi Group in the United Arab Emirates, in 2007. This way the industry is
becoming increasingly more competitive because of the entry of these internationally
experienced operators.

GrameenPhone is seeing the Bangladeshi market as a great opportunity to do business.

Fresh investment of over USD 300 million was made during the year to implement an
aggressive network rollout plan. The population coverage of GrameenPhone network was
increased from 55% to 95% during the year. And GrameenPhone will continue to make
the network quality and capacity improvements through the country and also improve
coverage in major highways and important public access buildings.

2.1. Brief profile of GrameenPhone Ltd.

GrameenPhone Ltd. is the market leader in the telecommunication sector in Bangladesh.

With the beginning of 2008 the company completed its eleventh year of business. The
company achieved remarkable success during this period. It has the largest network, the
widest coverage, the biggest subscriber base and more value added services than any
other mobile phone operators in Bangladesh. GrameenPhone has a very strong
competitive position in the telephone industry in the country.

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2.2. Background of GrameenPhone Ltd.

In November 28, 1996 GrameenPhone Ltd was offered a cellular license in Bangladesh
by the Ministry of Post and Telecommunication. Then in March 26, 1997 GrameenPhone
first launched its services on the Independence Day of Bangladesh.

In June 1998 GrameenPhone started its services in the port city of Chittagong, the second
largest city in the country. Cell to cell coverage in the Dhaka-Chittagong corridor also
enabled GrameenPhone to introduce its service in a number of other districts along the
way.

In 1999 GrameenPhone started its service in the industrial city of Khulna. Once again, a
number of other districts came under coverage of GrameenPhone because of the cell to
cell coverage between Dhaka and Khulna.

GrameenPhone has so far been a pioneer in introducing innovative cellular telephone

products and services to the market. Earlier in September 1999, it introduced the EASY
pre-paid service in the local market. It also introduced the Voice Mail Service (VMS) and
the Short Message Service (SMS) and other value-added services.

In 2000 GrameenPhone started its services in Sylhet, Barisal and Rajshahi, bringing all
six divisional headquarters under the coverage of its network. The service in Barisal
region was started after the microwave link between Khulna and Chittagong was
completed.

After six years of operation, in August 2003 GrameenPhone has more than one million
subscribers. And from November 2005 GrameenPhone continues to being the largest
telecommunication operator of Bangladesh with more than 5 million subscribers.

GrameenPhone Ltd is continuing its operations with a success in 2006. In November it

has just reached the mark of 10 million customers. GrameenPhone is now the leading
telecommunications service provider in the country with more than 20 million
subscribers as of June 2008. GrameenPhone had acquired more than 4.5 million
subscribers- a growth rate of more than 81%. This had helped GrameenPhone to be the
market leader of the countrys mobile communication. With a network covering 95% of

9
the total population, GrameenPhone provides the distinct market leadership in the midst
of emerging stiff competition.

The brand image of GrameenPhone along with continuing innovations in products and
services, quality network coverage and committed customer service, made
GrameenPhone the preferred telecom service provider of the people of Bangladesh.

2.3. Vision, Mission, Objectives and Values of GrameenPhone Ltd.

2.3.1. Vision
GrameenPhones vision is Were here to help. That means GrameenPhone Ltd exist to
help the customers get the full benefit of communications services in their daily lives.
They want to make it easy for the customers to get what when they want it.

2.3.2. Mission
The mission of GrameenPhone Ltd is to provide a total communication solution to its
customers. To do this the service development of GrameenPhone has significantly
developed over the last few years. GrameenPhone subscribers can now enjoy all the
modern data communication and content services. Mobile office, internet access, MMS
and modern music and download services are available through the nationwide EDGE
enabled network.

2.3.3. Objective
GrameenPhone Ltd. has a duel objective to receive an economic return on its investments
and to contribute to the economic development of Bangladesh through
telecommunication. This is why GrameenPhone, in collaboration with Grameen Bank
and Grameen Telecom, is aiming to place one phone in each village to contribute
significantly to the economic benefit of the poor. It is on the way to bring a total

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revolution in the telecommunication field. By attaining the success factors,
GrameenPhone would like to be recognized as a reliable, honest and committed company
to its valued subscribers and stakeholders.

2.3.4. Values
Make it Easy
Keep Promises
Be inspiring
Be respectful

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2.4. Operating Coverage of GrameenPhone Ltd.
Presently GrameenPhone has covered 440 upazillas of 61 districts. 99% of the total
population is under coverage of GrameenPhones network. In the map below the existing
coverage of GrameenPhone is shown. The light green portion shows the proposed
coverage level which will be covered within December of 2007.

Figure 1: Existing coverage of GrameenPhone Ltd.

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2.5. Management and organization structure: Management and
organization structure of GrameenPhone Ltd. are given in the following -

2.5.1. Board of Directors

SIGVE BREKKE BOARD OF CHAIRMAN

OLE BJORN SJULSTAD Norwegian
PER ERIK HYLLAND - Norwegian
M. SHAHJAHAN - Bangladeshi
DIPAL CHANDRA BARUA - Bangladeshi

2.5.2. Management team of GrameenPhone Ltd.

Oddvar Hesjedal Chief Executive Officer, since 2008.

Md. Arif Al Islam Chief Financial Officer, since 2006.

Khalid Hasan Director, Corporate and Regulatory Affairs, Since 2001.

Emad Ul Ameen Director, Human Resources Division, Since 2003.

Shafiqul Islam Director, Networks Division, Since 2006.

Syed Yamin Bakht Director, Public Relations Division

Raihan Shamsi Director, Financial Management, Since 2005.

Farhad F. Ahmed Head of Internal Audit, Since 2006.

Frode Stoldal Director, IT Division, Since 2007.

Rubaba Dowla Director, Marketing, Since 2008.

Arnfinn Groven Director, Customer Service Division, Since 2008.

Laszlo Barta Director, Sales Division, Since 2008.

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 2.5.3. Organogram and Management of GrameenPhone Ltd.

CEO
Oddvar Hesjedal

Special Initiatives*

Public Relations CHQ

Petter Russ
Syed Yamin Bakht

Human Resources Financial Services

Delwar Hossain Azad
Emad Ul Ameen

Corporate Affairs Climate Strategy

N K A Mobin
Khalid Hasan

Company Secretary Company

Raihan Shamsi Compliance Officer*
TBA

Internal Audit
Senior Assistant to
Farhad F Ahmad
CEO*
TBA

Finance Technology Sales Marketing Customer

Md. Arif Al Oddvar Laszlo Barta Rubaba Dowla Service
Islam Hesjedal Arnfinn Groven

Financial Networks Information

Management Shafiqul Technology
Raihan Shamsi Islam Frode Stoldal Not part of Executive Management Team

Figure 2: Organogram of GrameenPhone Ltd.

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2.6. Description of different divisions and departments

Currently GrameenPhone has 11 divisions and 5 departments to run its operations

smoothly. The divisions are:
Customer Management Division
Finance Division
Information Technology Division
Sales and Distribution Division
Human Resource Division
Fiber Optic Network Division
Regulatory and Corporate Affairs Division
Technical Division
Projects Division
New Business Division
Marketing Division

The departments are independent from any divisions. The names of 5 departments are:
Administration Department
Revenue Assurance and Fraud Management Department
Information Department
Internal Audit Department
Legal and Compliance Department

There are also two projects running under observation of Deputy Managing Director. The
projects are independent of Projects division. These are:
CHQ Project, and
Efficiency Project.

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Among them the respective directors head ten divisions. Marketing division is headed by
a deputy director. A General Manager heads Information Department. He has to report
direct to the Managing Director. Head of supply chain management has to report directly
to the director of Finance Division. This responsibility is added recently to the Director,
Finance Division.

2.6.1. Customer Management Division

Customer Relations Division is the bridge between the customers and the company.
People here are always serving the clients. A total of 210 people in this division
providing customer service are strengthening the relationship of GP with its valued
customers. This division can be subdivided into three major parts-call center, billing
department and trainee development department.

Call center responds to customers' query. 150 to 190 people working in shifting basis in
call center provide 24 hours service to the customers through telephones. They receive
queries and complaints related to GP service and network, solve them, provide different
types of information to the clients etc.

Billing department is mainly responsible for billing customers for the service and
collecting the revenue from them. This department works with the help of its eight units.
The units are distribution unit, general banking unit, bank reconciliation unit, bank
communication unit, collection unit, credit recovery unit, fraud management unit and
revenue assurance unit.

Trainee development department arranges all sorts of in-house and overseas training
programs for the employees. Experts from within the GP family conduct in-house
training programs. These programs include orientation for new employees, team-building
workshops, customized training for the senior managers on management style,
motivation, and project management and handling difficult situations. Many GP
employees are sent to foreign countries for overseas training, workshops and seminars.

16
All the organization and formalities concerning these programs are done through this
department.

2.6.2. Finance Division

The Finance Division holds 330 employees in its various departments. The Division
encompasses all financial activities - both internal and external. The purpose of each of the 12
departments is given as follows:

Financial Statement Analysis

Business plan
Strategic plan
Budgeting
Product profitability analysis
Statistical analysis-financial
Revenue analysis
Telenor quarterly review
Adhoc reporting to board, Telenor management and other related parties
Presentation- company, BM, OCM and related parties

Investment Controller
Review new investment proposal as project or programs
Prepare business case
Advice management and investment committee
Re-rank the investment options

Finance Control Department

Implementation of IFRS in preparing the financial statements
Maintain and develop internal control structure aiming at the Sarbanes Oxley Act
2002 (Section 404)
Check compliance of financial and procurement policies
Compliance with tax related issues

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 Review policies and procedure in place and pass suggestion for continuous
improvement

Strategy and Training

Develop and follow-up strategy of Finance Division
Coordinate recruitments in Finance Division
Coordinate training for Finance Division employees
Follow-up IVC of Finance Division

Payroll and Taxation

Payroll management
Corporate tax management
VAT management
Board of Investment (BOI), Bangladesh Bank and others regulator affairs

Capital Market
Coordinate overall financing function
Ensure and monitor compliance to the financing agreement
Responsible to lender, Telenor and Bangladesh Bank related to financing issues
Liaison with foreign lenders, sponsors, bankers and regulators
Arrangements of short term financing from local banks.

Reporting & Accounting & System Administration

Financial reporting to Management, Telenor, OCM and Board
Financial and management accounting- actual and budget
Budgeting (preparation/implementation/monitoring)

Assets and Insurance

Asset addition

18
 Capitalization WIP
Land and land advance
Insurance - fire and business interruption
International Settlement & Insurance
Letter of Credit for all imports
Leasing, insurance and contracts
International roaming and receivables, payables and invoicing
All foreign payment and employee foreign travel and training payments and
advances

Treasury Department
Fund management
Cash rolling forecast
Local payments
Bank reconciliations
Employee gratuity and provident fund

Revenue Accounting
Collection of prepaid, post-paid and international roaming bill from subscribers
Recognition of prepaid, post paid revenue and revenue from all sub leases
Reconciliation of all collections
Handset payment management
Banking arrangement for collection
Costing of inventories
Invoicing to subleases and collection
Participation in revenue assurance activities

Supply Chain Management Department

The Supply Chain Management Department is recently added under the Finance division.
It has the following units:
Local Procurement

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 Foreign Procurement
Logistics Procurement
Contract
Inventory Control

2.6.3. Sales and Distribution Division

Sales and distribution division has the opportunity to have direct interface with the
customers. The number of employees working in this division is 1588. This division is
subdivided into two part- sales department and distribution department.

The responsibility of sales department is to sell the products and services of

GrameenPhone. Therefore they have to work in close collaboration with Marketing
Division for their success in selling. They also need to keep good relationship with the
sellers and also with customers.

The responsibilities of the part or the distribution department includes instant delivery of
products and services, maintaining relationship with dealers, serving the corporate clients
with extra care, follow up existing subscribers and building relationship with new and
existing subscribers. One of the most important tasks of sales department is sales-
forecast.

2.6.4. Information Technology Division

The Information Technology Division became a separate division in 2003. Till then it was
under the wing of Personnel & Organization Division.

The IT Division comprises the following departments:

Core Systems
IT Operations

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 Information Security

Business Processes and Architecture

Project and Change Management

The description of each department is given below.

Core Systems
Objectives are:
- Development/integration of business critical systems
- Maintenance of business critical systems

IT Operations
Objectives are:
Access control, accessibility and stability for end- and IT-users
Operations, planning of operations and monitoring
Security
Readiness

Information Security
Objectives are:
Design, develop and deploy a security infrastructure including intrusion detection,
protection, assessment and management
Publish, monitor and enforce information and computer security policies
Supervise and/or conduct periodic security assessments
Manage long-term projects to improve security posture and capabilities

Business Processes and Architecture

Objectives are:
Overall IT architecture
Management of business process framework

21
 Business process modeling
Exception handling

22
2.6.5. Human Resource Division

Human resource department plays a very important role in the functioning of the
organization. The main tasks of this department are employee recruitment, selection,
transfer, promotion, training, performance appraisal, manpower planning etc. Different
divisions send their personnel requirement to HR department. Then HRD sets target,
prepare recruitment planning and go for the recruitment process. When an employee is
recruited a separate employee file is opened comprising of all information of the
particular employee which is regularly upgraded by HRD. This department is also
responsible for performance appraisal, manpower planning etc. Different divisions send
their personnel requirement to HR department. Then HRD sets target, prepare recruitment
planning and go for the recruitment process. When an employee is recruited a separate
employee file is opened comprising of all information of the particular employee which is
regularly upgraded by HRD. This department is also responsible for performance
appraisal of employees that is very important for the confirmation, increment, promotion,
transfer of employees. This is done through job analysis, setting up of performance
standard and appraisal interview.

2.6.6. Regulatory and Corporate Affairs Division

This division looks after the regulatory and interconnection issues. It is responsible for
maintaining close relationship with BTRC, MOPT, PSTN operators and mobile operators
for matters related to interconnection with fixed and mobile operators, and
interconnection & Revenue Sharing Agreement.
This division is also responsible for maintaining relationships with Ministries, the
National Parliamentary Telecom Committee, Government agencies like the Board of
Investment (BOI), the National Board of Revenue (NBR), and law-enforcing agencies.

2.6.7. Technical Division

The Technical Division can be considered as the brain of this organization. This division
has the highest number of employees, which are 1077 at present. This division is split
into three departments- planning department, implementation department and operations

23
department. People working in planning department build the technology while people
working in operations department maintain the technology. Implementation is between
the two. Most of the people in the technical division are from the engineering and
technological educational background.

People in planning department are responsible for planning the network and equipment,
taking decision about new expansion, enhancement and up-gradation and closely
monitoring network performance. They are also engaged with BSC (Base Station
Controller) and MSC (Mobile Switch center) related planning, timely supply of
equipment, making roaming agreements with other countries and negotiating with home
owners for building base stations on the roofs. This department has three parts: switch
planning, radio planning and transmission planning.

The people of implementation department are responsible for the construction and
acquisition of base station room, antenna pipe, and power supply etc., installation of new
base station hardware, start-up and pilot operation of base station. It is also divided to
three units: site acquisition, civil works and roll-out.

Operations department is responsible for smooth operations and maintenance of the

network. Their main tasks are operation, maintenance and overall management of the
networks, fault detection and fault handling of networks. This department always closely
monitors the network performance.

2.6.8. Fiber Optic Network Division

The Fiber Optic Network (FON) Division is a full-fledged Division under Deputy
Managing Director. It manages the nationwide Fiber Optic Network, and to create and
sell the Transmission Capacity commercially to prospective business units/clients.

24
The division shares use of FON capacity with third parties such as other telecom
operators, ISP's DDN service provider etc. GrameenPhone is capable of offering point to
point full E1 connectivity within GP Transmission Network for their sub-lease clients.

2.6.9. Marketing Division

Marketing is responsible for all types of Product development and launch, Branding and
communication, International Roaming, Value Added Services and all types of Research
activities. The Division comprises the following departments: Product and Market
Development Department (PMD), Market Research and Planning Department (MRP),
Market Communications Department, Brand Development and Management Department
International Business Department, Value Added Services Department.

The Product and Market development Department includes Products & Prices Section
(Business Solution, Djuice and, Mass), New Product development and Innovation lab,
and Forecasting and Analysis Section. Market Research and Planning Department
includes Segmentation, Research & Planning Section and Market Intelligence - acting as
a central research point for GrameenPhone. The International Business Department is
involved in international roaming services while the Value Added Services Department
includes Service Development and Management Section, Content Provider / Aggregator
Management Section, CPA/CSF Platform Section and Advanced Services section. The
Market Communication Department deals with media management, event management
and regional marketing.

2.6.10. Projects Division

The responsibility of projects division is to manage the process of initializing,
prioritization, monitoring of execution of all major change request (projects). This
division is responsible for overall performance, measure and report of IT in delivering
project-based services. This division develops, maintains, and evolves standards, tools,
templates, and documented processes for project management within IT. Another
responsibility of this division is to develop tools to assess the effectiveness of project

25
management efforts within IT. This division gathers project information and maintains a
list of current project activity for IT including project timeframes and resource utilization

2.6.11. New Business Division

New business is the newest division in the GrameenPhone Ltd. Mr. Kafil H.S. Muyeed is
the director of this division. To seek new business opportunity in the telecommunication
industry is the main objective of this department.

2.6.12. Administration Department

This department headed by an AGM has three units. They are office, security and
transport. The office unit looks after the furniture and general maintenance of the office
premises. The security unit is responsible for managing the security of office, TBS,
switches and BTS. The transport unit determines the transport routes; transport related
costs and hires cars and microbuses for GP officials.

2.6.13. Revenue Assurance and Fraud Management Department

Revenue Assurance and Fraud Management (RAFM) function in GrameenPhone is
responsible to stop revenue leakage in any form (intentional & unintentional) across the
complete business chain (Internal & External). RAFM focus includes core business
processes, support processes, systems, people and organizations involved with GP
business in any form. RAFM as a principle, highly emphasize on cross functional
cooperation based on smart & effective processes.

2.6.14. Internal Audit Department

This department, with a direct reporting to the Managing Director, is responsible for
monitoring the activities in the light of policies or procedures set by the Board of
Directors and/or the Management Team. In addition, this unit has to follow the Group
Internal Auditing Guideline as a part of subsidiary of Telenor Mobile. On the basis of
reports of the Internal Auditor, actions are taken to bring about developments and
rectifications of systems or policies and procedures.

26
2.6.15. Legal and Compliance Department
This is a one unit department whose major functions comprise as follows:
To ensure sufficient legal coverage and minimum exposure to risk
To establish high standards of corporate governance
To build GP's image as a compliant organization both among its customers
its other stakeholders.

2.6.16. Information Department

Information department is managing the efficient flow of information. It is responsible to

manage the relationship with media and newspapers, publish news bulletins regarding
different events of the company. It is also publishes monthly newsletters of GP. It also
publishes the GP Annual Report. It determines the contents of GrameenPhone websites
and grameenphone@work intranet site.

27
 Chapter: 03

Products, Promotional strategies,

Distinctive features & Performance of
GrameenPhone Ltd.

28
3.1. Products of GrameenPhone Ltd.

Currently GrameenPhone is selling four types of products:

Explore Package 1 (Postpaid)
Explore Package 2 (Postpaid)
Smile Package (Prepaid)
Djuice (Prepaid)
Of those four packages except Djuice other three has free unlimited BTTB incoming call
receiving facilities.
All of the GrameenPhone connections enjoy some extra features. These features are
mainly of two types.

GSM Features

Value Added Services

3.1.1. The GSM Features

GrameenPhone subscribers enjoy the following GSM features without bearing any
additional costs:

Caller ID

Display of the phone number of an incoming call in the handset before the call is
answered.

Call Waiting

While talking to the first caller, the GrameenPhone customer will hear a special tone
informing him/her about the second call on the line. At that moment he/she can put
the first caller on hold and talk to the second caller.

Call Conference

29
 Receiving calls from multiple callers can be supplemented by joining these multiple
callers so as to enable them to talk to each other. The GP customers will be able to
communicate with a group consisting of maximum five callers. This feature depends
on handsets.

Call Divert

Call Divert lets the GP customers redirect or re-route the call to another
GrameenPhone mobile or any other fixed (if the GP customer have BTTB
connectivity) or mobile phone.

Call Barring

It enables the GP customers to restrict certain types of calls to be made from the
mobile. This feature is especially important for security purposes.

3.1.2. The Value Added Services

The following additional services are available upon request:

Voice Mail Service (VMS)

VMS is a unique answering machine.
It provides clients with a personal electronic mail box in GPs voice mail center.
It records clients personalized greetings as well as stores the incoming voice
messages.
It records incoming voice messages if clients are Outside GPs coverage area or
Busy or if the mobile is simply switched off.
It provides 24-hour automatic secretarial service.
Make the client available to the calling party anytime.

Short Message Service (SMS):

SMS in the clients mobile acts like an advanced pager.

Clients can send and receive text messages of up to 160 characters, directly, from one
GP mobile to another GP mobile.

30
 Voice Message Service also has been introduced.

Fax and Data Service (currently available only to corporate clients):

GP customers can the mobile Phone attached to a computer to send faxes or transfer
data.

No need to have connection with a fixed line.

Clients can use this service even on the move within GPs coverage area.

Wireless Application Protocol (WAP) Service:

WAP provides easy, secure access to the Internet in text format through the mobile phone
within the GP coverage area. Recently Internet and Multimedia Media Message Service
(MMS) have been introduced.

EDGE Service:
EDGE also provides easy, secure access to the internet in its full graphical format.

3.2. Promotional strategies of GrameenPhone Products

3.2.1. Branding

GP is committed to build on its already strong brand equity, and the company has already
achieved a high level of recognition after being only for three years in the market.

3.2.2. Promotions
GP uses frequent campaigns to drive subscriber growth. The campaigns are based on
promotional pricing and take place roughly every other month.

3.3. Distinctive features of GrameenPhone Ltd.

31
In order to be successful and preferred by GrameenPhones most important stakeholders
i.e. small & medium enterprises, individuals, Village Phone users and sub-lease clients of
transmission capacity the GrameenPhone will be recognized by the following distinctive
features:

Wider Coverage

Wide Distribution Network

Low start-up cost

Competitive tariff

Achievement of sales target

Apart from the main distinctive features, in order to be successful in relation to GPs
owners/shareholders they will also focus on increasing the subscriber base, Average
Revenue per User (ARPU) that will increase company value. They have to build good
brand value among all segments and be more organized for better reporting.

3.4. Performance of GrameenPhone Ltd.

Figure 3: Revenue Earning of GrameenPhone Ltd (in million BDT) from 2002 to 2005

32
GrameenPhone Ltd currently has 60% of the market share. It generates high revenue and
each year it is increasing. In 2004 GrameenPhone generated revenue of 19,700 million
BDT but in 2005 it increased to 29,628 million BDT.

Figure 4: No. of employees of GrameenPhone from 2001 to 2006.

GrameenPhones no. of employees has increased significantly in past few years.

Especially in 2004, 2005, 2006, 2007 and 2008 the no. of employees has increased
significantly. In 2004 no. of employees were 1004, In 2005 no. of employees were 2159,
In 2006 no. of employees were 4096 and presently in 2008 GrameenPhone has 4757 no.
of employees.

Figure 5: No of Base Stations from 2001 to 2006

33
Base stations are very much important for GrameenPhones sound network coverage.
From the chart above it is seen that the no. of base stations have in creased from 1400 in
2004 to 5132 in 2006.

Figure 6: No. of subscribers of GrameenPhone Ltd (in million) from 2002 to 2006

The no. of subscribers has reached in 2008 to more than 20 million from 15 million in
2007. From the figure we see that every year the no. of subscribers had nearly doubled.

3.5. Long term Strategic Focus of GrameenPhone Ltd.

GrameenPhone Ltd. is a company with ever increasing growth trend from the very
inception phase. At present, in the 12th year of its operations GP has achieved a subscriber
base of more than 20 million. The company has a number of plans for the forthcoming
future.

Within 2008, GP has the target to reach a subscriber base of 20,000,000. Within that year
the company is intended to cover 64 districts of the country. With this target GP will be
able to cover almost 88% land area and 98% population of the country. Taking all the
probable threats in the industry under consideration, including the TeleTalk of BTTB

34
mobile phone connection, GrameenPhone is intended to keep its market share at least
49% by 2007.

In order to reach company goal for the long term GP have set their objectives related to
their stakeholders for the short term and the long-term period. For Customers (mainly
SME) and share holders GPs long term objective is to have 80% of customers satisfied
and churn level less than 7% due to expansion of core network elements and increase
coverage to all 61 districts (130,000 sq. kms). GP will achieve 85% service level
according to Automatic Call Detector report and network performance will be according
to set criteria and list of Grade of Service. And they will be the no. 1 choice with a high
market share due to low start up cost and number of products simplified to 4 and 575
Points of Sales. GPs shareholders will be satisfied due to positive financial results, good
net result, and the fact that GP has had a successful IPO.

35
 Chapter: 04

SWOT Analysis of
GrameenPhone Ltd.

36
 4.0. SWOT Analysis

Strengths and weaknesses are the micro environmental factors influencing a business
which are within the organization. Opportunities and threats are the micro environmental
factors that influence all the firms in the industry. They are present in the whole industry.

The following figure shows the strengths and opportunities that GrameenPhone Ltd.
enjoys as well as weaknesses and threats that the company faces.

Strength
Coverage
International roaming
Distribution Channels
Pre-Paid service
Low price handsets with quality and
variability
Lease of Fiber-Optic cable from BR

Opportunity
Unmet demand
Possibility of further network expansion
Increasing interconnection with BTTB
Favorable Regulatory Authority
Possibility of innovative products and
services
Threat
Aggressive marketing by competitors
Introduction of WARID mobile phone of
Dhabi Group.
Better relationship of competitors with
regulatory body.

Weakness

Growing customer dissatisfaction

Lack of follow-up from customers
Deviation from original business plan

37
 Chapter: 05

Chapter: 05

Functions of Finance Division

of GrameenPhone Ltd.

38
5.1. Name of the Departments in Finance Division:

Financial Management
Treasury Operation
Collection Network & Fund Management
Supply Chain
Capital Market
Financial Control

5.1.1. Scope of work of the Financial Management Department:

Reporting: Own the process of Financials reporting both Group and local.
Accounting : Ensure accounting compliance in line with standard principles &
group policies,
Revenue Assurance & Fraud Management: Ensure roburst revenue flow
without any leakages. Bad debt management and fraud management.
Taxation & Fiscal Compliance: Secure compliance with the taxation and other
fiscal laws and manage relationship with related authorities.
Financial Planning: Steer and manage the process of Business Planning &
Budgeting.
Business Support & Control: Support respective divisions on financial
management, planning, analysis and ensure financial control

5.1.2. Scope of work of the Treasury Operation Department:

39
 Manage transaction outflow for accounts payable
Compliance to all Foreign Exchange Rules and Regulations
Maintain treasury operation of regions including support to network sub centers.

5.1.3. Scope of work of the Collection Network & Fund Management

Department:

Ensure efficient countrywide collection

Develop and Maintain treasury policy.
Efficient working capital management.
Ensure required funding solutions with objectives of optimum capital structure
and minimized risks.

5.1.4. Scope of work of the Supply Chain Department:

Support procurement function of the company with compliance and transparency.

Vendor sourcing, relationship and strategy building.
Logistics and Warehousing support mainly to technical and other divisions
(except sales).

5.1.5. Scope of work of the Capital Market Department:

Facilitation of smooth process of public listing project.

Ensure compliance to necessary rules & regulations
Ensure required process of due diligence and credit ratings.
Dealing with analysts and relevant stakeholders.

5.1.6. Scope of work of the Financial Control Department:

40
 Investment Control: Appraise all company investments and ensure right
prioritization.
Internal Control: Ensure adequate internal controls are set, updated and
monitored for whole company with focus on process efficiency.
Transaction Control: Ensure compliance to all payments with added focus
on justification of expenditure.

Chapter: 06

Overview of Payment Procedure

41
42
6.1. Introduction
GrameenPhone Ltd has a huge reputation that it makes payment to its suppliers in time.
And much of the credit goes to the Treasury Department of the Finance Division.
Treasury Department is responsible for all the payments that GrameenPhone makes to its
local suppliers. GrameenPhone has a large number of suppliers and service providers.
These peoples contribution is very much needed in the company to achieve its goals.
Most of the suppliers and service providers have a long term relationship with the
GrameenPhone. This relationship is very much important because it award a competitive
edge to the company both in terms of price and quality.

6.2. Name of the Units in Treasury Department

PO Payment
Non PO Payment
Fund Management
Bank Reconciliation
Cash Payment
Utility and Rent Payment
Base Station Related payments

6.3. Job Responsibilities of the Units in Treasury Department

PO Unit
PO means Purchase Order. This unit is responsible for the payment
of those bills that exceeds BDT 150,000 and which are the procurement of the
Supply Chain Management Department. Normally the vouchers and bills are called
PO because of the Purchase Order attached by the Supply Chain Department. Price,
quality and quantity of the purchased goods requisition and authorization signs are
illustrated in the Purchase Order. These types of bills include all sorts of local
procurement of Supply Chain Management Department.

43
 Non PO Unit
Non PO means Non Purchase Order. The payment amount ranges
from BDT 1500 for this type of vouchers. And authorization of Supply Chain
Department is not needed in here. The user department (Department that incurs the
cost) just issues a work order with acceptable authorization to validate the expense.
The type of vouchers and bills include Rent-a-Car, Security, Hotel and Restaurant,
Hospital, Training, Courier and Procurement. Hard Furnishing, Education Grant,
Car Loan and Salary of the employees are also paid from the Non PO Unit. A new
type of responsibility is assigned to Non PO unit and that is LC clearance bill to the
C and F agents.

Fund Management Unit

Treasury Department has to manage its funds. It has a number of
bank accounts. Each account is used for a special purpose. For example, one
account is used for payment of suppliers and service providers; another account is
used when GrameenPhone is paid from other large companies. Citi Bank NA,
Standard Chartered, HSBC, EBL etc. are some of the banks where GrameenPhone
maintains its bank accounts. At the end of the month a report has to be sent to the
A.G.M. about the conditions of the funds.

Bank Reconciliation Unit

The Bank Reconciliation unit checks out that the payment made
from the banks and the accounting books show the same result or not. This unit
works more like an error correction and internal control unit. At the end of the
month the unit has to send a report directly to the director.
Cash Unit
The Cash Payment unit is responsible for the payment of small amount of not more
than 3000. Normally cash payment is made when the user department request for
cash or when the cash amount is small.

44
 Utility and Rent Unit
This unit pays the utility bills, rents of the flats and offices and all
type of Warehouse, GPC and GPSD office related bills. Utility bills include land
phone, sewerage, water, electricity and gas bills of all offices of GrameenPhone.

Base Station Unit

This unit is responsible for payments of any type that are related to
base stations of GrameenPhone. This include rent of roofs and fields where the BTS
Towers are erected, cost of constructing and servicing of BTS Tower, cost of setting
up and setting of generators for BTS Towers etc. Normally the rent of roofs and
fields for the erection of BTS Tower are paid in a yearly basis.

6.4. Software used in the Treasury Department

Enterprise Resource Program (ERP): Oracle 11i
MS Office Suit
MS Project
Check Write Pro
Citi NA Upload Manager

6.5. Description of the Payment Procedure to the Local Suppliers:

Description of the payment procedure to the local suppliers of GrameenPhone Ltd. is
given in the following:

6.5.1. Non PO and PO payment Procedure

Non PO and PO type vouchers payment procedure is actually same. The only difference
is that in Non PO payment procedure, vouchers directly come from the user department.
On the contrary, in PO Payment procedure, vouchers come from the Supply Chain
Management Department.

45
Below the payment procedure is described step by step:

Vouchers receiving
Suppliers send vouchers and bills to the user department. After error checking the user
department (Supply Chain Department in case of PO type vouchers) sends the vouchers
to treasury department.

Invoice Creation in ERP

In Treasury Department, all the vouchers are sorted out according to the payment cycles.
There are four payment cycles in which bills are paid to the suppliers. Each payment
cycle is seven days long.

Payment Cycle:
5th Payment Cycle From 19th to 26th day of previous month.
12th Payment Cycle From 27th day of previous month to 5th day of continuing month.
19th Payment Cycle From 6th to 12th day of continuing month.
26th Payment Cycle From 13th to 19th day of continuing month.
Table 1: Payment Cycle

In each payment cycle, bills are paid in that day of the month. For example, if a bill is
received in between 19th to 26th day of the month, it will be paid on the 5 th day of the next
month.
Then the invoices are created in the ERP. It is same like writing in general journal. In
here, GL (General Ledger), RC (Responsibility Center) no. and Tax Codes are entered
carefully. GL no. is same like account no. They are just serial no. of many types costs
associated with GrameenPhone Ltd. RC no. is the serial no. of different departments.
They are used to link the costs with related departments.

GrameenPhone Ltd. always withholds the VAT and TDS (Tax deducted at Source) portion
of the payment amount from the suppliers and pays the VAT and TDS on behalf of the

46
suppliers. So Tax codes are entered carefully in ERP system to deduct the correct amount
of TDS and VAT.
Error Checking
After creation of invoice the vouchers are sent to Financial Control Department. There
the invoices are checked in the ERP to see whether any mistake is done or not. After the
checking each invoices are approved in the ERP.

System Payment
After the invoices are approved by the FCD, the payment is made in the system. This
means the liabilities that were created while in invoice creation step is now all paid in the
system. However in real terms, the payment is not yet made to the suppliers.

Upload Entry
After payment entry upload entry is made in the MS Excel. In this entry supplier or
beneficiary name and taka amount is written. Other information regarding TDS, VAT and
bill no. are also written. All these information are printed in the check.

Compare
Then the MS Excel entry is compared against the bills. If there are any mistake in the
excel sheet, the entry is corrected. This comparison is done by the Financial Control
Department. This prevents wrong payment to suppliers.

Upload
Then the excel entry is uploaded to the Citi NA Server using the Upload Manager
software.
Approval
Then all the entry is approved first by the manager of Treasury Department and then by
the Director, Finance Division.

Check Issuance

47
Then managers checks are issued from the Citi NA Bank. These checks are distributed to
suppliers. Normally it takes 7 to 8 hours to print the checks from the Citi NA Bank.
Suppliers Queries
After getting the check suppliers come to do some queries about the payment. Most of the
queries are about the bill no. and deducted TDS and VAT. Some make queries about next
payment cycles.

1. Vouchers are sent to 2. Invoices are 3. Invoices are sent to

Treasury Department created in ERP FCD for error checking

4. Payment entry is made

If error occurs in the ERP
re-entry

11. Suppliers queries 5. Excel entry is made for

are answered uploading purpose
Error
correction
6. Comparison of excel
10. Managers checks sheets are done to
are issued identify error

9. Director, Finance 8. Manager of 7. Excel sheets are

approves the Treasury approves uploaded in the Bank
upload the upload server

Figure 7: PO and Non PO payment procedure

6.5.2. Cash Payment

Cash payment is made when the amount to be paid is small. In this type of payment
procedure bills come directly from the user department. In here, payment is made
instantly after the voucher is received.

Voucher Receiving

48
Here vouchers are received from the user department.

Invoice Creation
Then invoices are created in the ERP. Then GL, RC and Tax codes are given.

System Payment
Then payment is made in the ERP system.

Cash Payment
Then cash is paid to the suppliers excluding the VAT and TDS.

Reporting
At the end of the day, the unit has to send a report to the Manager of Treasury
Department and to the Director of Finance.

1. Vouchers are sent to 2. Invoices are created in

Treasury Department ERP

4. Cash paid to the 3. Payment entry is made

Suppliers in the ERP

5. Reporting

Figure 8: Cash payment procedure

6.5.3. Base Station Related Payments

Base Station related payments are mainly of two types. One is the rent of rooftops and
fields where base stations are erected and other is cost of constructing and servicing of

49
BTS towers, cost of setting up and servicing of generators etc. This unit has to work with
Site Acquisition Department side by side. Except rent other costs of Base Stations are
paid just as Non PO and PO type payment system.

Selection of Site
Site Acquisition Department chooses sites that are best suitable for the BTS tower.

Agreement Signing
Site Acquisition Department signs contract with the owner of the site and agrees to pay a
yearly amount as rent of the site.

Agreement Verification
Then the agreement is sent to the finance division for verification. Employees of finance
division verify whether the rent agreed for payment is justified or not.

Invoice Creation
Invoice is created in the ERP. Here no TDS and VAT are deducted. It is just like creating
a liability.

System Payment
Then payment is made in the ERP system. The liability that is created in the previous step
is fulfilled in this step.

Upload and Check Issuance

The beneficiary names and the amount to be paid are uploaded in the Citi NA server.
After that authorization from the Manager, Treasury Department and Director, Finance
Division is required. Then the checks are printed from the bank and sent to
GrameenPhones Treasury Department.

50
Hand over of checks
Officers of Site Acquisition Department then collect the checks from the Treasury
Department and hand the checks over to the beneficiaries.

1. Choosing of site by 2. Agreement signing

Site Acquisition Dept. with the site owner

6. Upload and check 7. Check 3. Verification of

issuance Payment agreement

5. System Payment 4. Invoice Creation

Figure 9: Base Station related payment procedure

6.5.4. Utility and Rent Payment

In these types of payment the unit has to pay for electricity, gas, water and sewerage bills
of all GrameenPhone offices, GPC, GPDC, GPSD and Warehouses. Rent payment
includes all office rent and GrameenPhone officers flat rent.

Voucher Receiving
The unit receives utility and rental bills from the Administration Department. Then they
carefully sorts out the bills according to the urgency. This helps not to make any rent or
utility bill arrear.

Invoice Creation
Then invoices are created in ERP. Proper GL and RC codes are carefully selected. No Tax
codes are necessary in here because in utility and rental bills no tax deduction is
necessary.

51
Error Checking
Then the vouchers are sent to the Financial Control Department. There the vouchers are
checked. If no errors are found then the vouchers are approved and then again sent bank
to the Treasury Department.

System Payment
After the error checking system payment is made. Thus the liability once created by
invoice creation is fulfilled by system payment.
Upload and Check Issuance
After system payment the beneficiaries names and amount is uploaded to the Citi NA
server. Then the manager of Treasury Department and Director of Finance Division
approves the upload. After some times managers checks are issued from the bank.

Check Conveying
Then the checks are conveyed to the proper authority.

1. Vouchers are received 2. Invoice creation

from Admin. Department

6. Check sending 3. Error checking

5. Upload and Check 4. System payment

issuance

Figure 10: Utility and rent payment procedure

52
 Chapter: 07

BTS Management Unit

Treasury (Local)

53
7.0. Base Station Unit
This unit is responsible for payments of any type that are related to base stations of
GrameenPhone. This include rent of roofs and fields where the BTS Towers are erected,
cost of constructing and servicing of BTS Tower, cost of setting up and setting of
generators for BTS Towers etc. Normally the rent of roofs and fields for the erection of
BTS Tower are paid in a yearly basis.

Areas of function of BTS management unit are described in the following:

54
 Figure 11: Area of function of BTS management unit
7.1. BTS Electricity bills: BTS electricity bill is one of the areas of BTS
management unit.

7.1.1. Mode of Payment: There are three types of mode of payment of BTS
electricity bills. These are given in the below:

Automation Payment
Bill payment through SCB

55
 Manual Checks
Preparation of DD & Pay orders in the name of respective House
(Through Citi Directory)

Cash Payment
Only for first bill of new site.

Figure 12: Process flow of Electricity Payments (House Owner)

56
 Figure 13: Process flow of Electricity Payments (PDB/REB)

Figure 14: Process flow of Electricity Payments (DESA / DESCO)

57
7.1.2. Steps followed for ERP Entry

ERP entry include 3 Steps:

Invoice Creation, Validation & Create Accounting

Approval
(Financial Control)
Payment Entry

7.1.3. Generator Fuel Bill

Bills are received from implementation (technical) department to issue pay

orders in favor of respective vendors for generator fuel, used in different
regions (mostly outside Dhaka).
Avg. number of bills received per month 10.

7.1.4. BR Payments

BR electricity bills & licensing fees are paid in the form of Cheque
periodically.

7.1.5. Bank Reconciliation

Bank reconciliation for electricity bills against BTS Electricity 04 A/C is

done within 3rd of next month after each months payments for all
regions.

7.1.6. Cost analysis report

Cost analysis report is prepared in each month for;

Cost per BTS

Trends for BTS electricity bills, Fuel bills, other maintenance cost & their inter
relations/dependency.

58
7.2. BTS Rental Payment: BTS rental payment is another one of the areas of BTS
management unit.

7.2.1. Mode of Rent Payment: Modes of BTS rent payment are given in the
following:

Automation Payment
Transfer rent directly to the respective AC of HO.

Manual Checks

Issue request letter towards Banks for DD & PO.

Bank prepares drafts for respective name and sends them to GP.
SAs officer collects checks from our end and disburses to HOs.

7.2.2. Description of Function:

Step-1:
Receive agreement from SA.
Step-2:
Check signature based on authority level.
Step-3:
Maintain excel sheet by putting detail information.
Step-4:
Process payment including invoice creation into ERP.
Step-5:
Get approval from Financial Control.
Step-6:
Give payment entry and send it to Banks.

59
 Figure 15: Process flow of BTS Rental Payments

7.3. BTS Repair & Maintenance: BTS repair & maintenance is another one of the
areas of BTS management unit.
7.3.1. Description of Function:

Ensure process and payment of BTS Repair & Maintenance invoices (BTS

EMS, RMS and Consumable Spares of AC and Generator, Drawings, scannings,

Tower Maintenance and Optimization work.)

Ensure accounting and compliance checking, data Entry of Invoices into ERP

BTS wise data input into Project module in ERP

Payment entry into ERP and prepare payment summary report

Ensure control checking of Payment summary report and process for payment

Cross Functional updates of information relating to BTS with other Divisions

60
 Providing Data for monthly BTS Cost Report Analysis at the end of the
month.

Chapter: 08
Analysis

61
8.1. Frequency of transaction of suppliers and service providers

Frequency Percentage
Once a month 32 34.78%
2 times a month 39 42.39%
3 times a month 13 14.13%
4 times a month 8 8.70%
Total 92 100.00%
Table 2: Frequency of transaction

Figure 16: Frequency of transaction

From the survey it was found that most of the suppliers and service providers transacted 2
times in a month. Around 42.39% of the suppliers and service providers transacted 2
times in a month. 34.78% of the suppliers and service providers transacted only once a
month. 14.13% of the suppliers and service providers transacted 3 times a month. 8.70%
of the suppliers and service providers transacted 4 times a month.

62
8.2. Continuation of operation with GrameenPhone Ltd.

Frequency Percentage
Less than 1 year 12 13.04%
1-2 year 34 36.96%
3-4 year 27 29.35%
Over 5 years 19 20.65%
Total 92 100.00%
Table 3: Continuing operation with GrameenPhone Ltd.

From the table we see that 36.96% suppliers and service providers were doing business
with GrameenPhone for 1-2 years. 29.35% of the suppliers and service providers were
continuing their business for 3-4 years. 20.65% of them were doing business for more
than 5 years and only 13.04% of the suppliers and service providers were doing business
with GrameenPhone for less than 1 year.

Figure 17: Continuing operation with GrameenPhone Ltd.

63
8.3. Suppliers and service providers knowing the reason for holding bills

Frequency Percentage

Yes 19 63.33%

No 11 36.67%

Total 30 100.00%
Table 4: Suppliers and service providers knowledge about reason for
holding bills.

It is seen that among 30 suppliers and service providers 36.67% do not know the reason
why their bills are on hold.

Figure 18: Suppliers and service providers knowledge about reason for holding bills.

8.4. Collection of additional payment information by suppliers and

service providers

Frequency Percentage

Yes 50 54.35%

No 42 45.65%

Total 92 100.00%

Table 5: Collection of payment information

64
Though in the check payment information such as bill no., cost description, TDS and
VAT information are provided, suppliers and service providers frequently come for
additional information. It seems that the information provided in the check is not
adequate enough. From the study it is found that 54.35% of the suppliers and service
providers came to GrameenPhone office for collection of additional information about the
bills that are paid.

Figure 19: Collection of payment information

8.5. Information queried by suppliers and service providers

Frequency Percentage
Cost description 20 40.00%
Bill no. 28 56.00%
Other bills that are not paid yet 19 38.00%
TDS/VAT Information 17 34.00%
Table 6: Information queried by suppliers and service providers

Figure 20: Query about information

65
56% of the queries done by suppliers and service providers were for bill no. 40% of the
queries were for cost description. 38% of the queries were for other bills that are not paid
yet and 34% of the queries were for TDS and VAT information. From the survey it
became clear that most of the queries of suppliers were for bill no. So the information
that was attached with the checks must be lacking information about bill no. The total
percentage of the information queried was more than 100%. This is because of many
suppliers and service providers queried multiple information.

8.6. Information queried by different types of suppliers and

service providers

Other bills
that are
Cost not paid TDS/VAT
description Bill no. yet information Total
Logistics 13.33% 26.67% 33.33% 26.67% 100.00%
TVC 0.00% 50.00% 50.00% 0.00% 100.00%
Projects 30.00% 0.00% 20.00% 50.00% 100.00%
Newspaper 0.00% 63.64% 27.27% 9.09% 100.00%
Restaurant 25.00% 50.00% 25.00% 0.00% 100.00%
Procurement 20.00% 20.00% 0.00% 60.00% 100.00%
Rent a Car 53.85% 15.38% 0.00% 30.77% 100.00%
Security 100.00% 0.00% 0.00% 0.00% 100.00%
Courier 27.27% 45.45% 27.27% 0.00% 100.00%
Table 7: Information queried by different types of suppliers and service providers
Figure 21: Information query by different types of suppliers and service providers

From the table it is seen that 33.33% of the logistical service providers queried about
other bills that were not paid yet then 26.67% of them also searched for bill no. and TDS
and VAT information. 50% each of the television companies searched for other bills and
bill no. 50% and 30% of the project related suppliers and service providers searched for
TDS and VAT information and cost description respectively. 63.64% of the newspaper
publishers searched for bill no. 45.45% of the courier companies searched for bill no.
53.85% of the rent a car service providers searched for cost description which includes
the car registration no. It is seen that most of the suppliers and service providers were

66
seeking one or two particular information. So the GrameenPhone staffs must provide
them with that information in the checks which will be useful for them. This way the
suppliers and service providers queries can be met. This will minimize the suppliers and
service providers frequent meeting with the GrameenPhone staffs and thus reduce the
hassle for both parties.

8.7. Average time spent for check collection

Time (In minutes)

Logistics 43:30
TVC 39:45
Projects 51:40
Newspaper 45:45
Restaurant 32:05
Procurement 33:45
Rent a Car 40:50
Security 37:00
Courier 40:12
Average 42:30
Table 8: Average time for check collection
The table shows average time spent by each suppliers and service providers for check
collection. From the table it becomes clear that the average check collection time for all
suppliers is 42:30 minutes.

8.8. Average time spent to make different types of query

Average time (In min:sec)
Cost description 21:21
Bill no. 28:29
Other bills that are not paid yet 23:52
TDS/VAT Information 12:03
Table 9: Average time spent to make different types of query

67
In the table it is seen that 28 minutes 29 seconds of suppliers and service providers times
were spent while querying about bill no. 23minutes 52 seconds was spent while querying
about other bills. Query about TDS and VAT information took least time and that was 12
minutes 03 seconds.

8.9. Severity determination of error

Moderately Moderately
Low low high High Total
Wrong supplier
name 0.00% 0.00% 20.00% 80.00% 100.00%
Wrong taka amount 0.00% 0.00% 25.00% 75.00% 100.00%
Wrong check no 22.22% 22.22% 33.33% 22.22% 100.00%
Wrong bill no 25.00% 66.67% 8.33% 0.00% 100.00%
Table 10: Severity determination of error
The table above shows the severity of error that the suppliers and service providers
identified in the checks. The severity of error was identified according to the complexity
and solvability of the error. In the survey it was seen that according to 80% of the
suppliers and service providers wrong supplier name was an error that had high severity.
According to 75% of the suppliers and service providers wrong taka amount was an error
that had high severity. 33.33% of the suppliers and service providers thought that wrong
checks no. was a problem that had a moderately high severity. Wrong bill no. was a
problem of moderately low severity according to 66.67% of the suppliers and service
providers.

Figure 22: Severity determination of error.

68
8.10. Relationship of satisfaction level and error

Error identified
Extremely satisfied 2.50%
Moderately satisfied 17.50%
Neither satisfied nor dissatisfied 17.50%
Moderately dissatisfied 35.00%
Extremely dissatisfied 27.50%
Total 100.00%
Table 11: Relationship with satisfaction level and
error
From the survey it was seen that those suppliers and service providers who have
identified error on their checks 2.5% were extremely satisfied, 17.5% were moderately
satisfied and another 17.5% were neither satisfied nor dissatisfied. 35% of the suppliers
and service providers were moderately dissatisfied. 27.5% of the suppliers and service
providers were extremely dissatisfied.

Figure 23: Relationship with satisfaction level and error

8.11. Priority of information written on checks

Important Normal Unimportant
Payment details 42.39% 34.78% 22.83%
Bill no. 39.13% 14.13% 46.74%
TDS/VAT calculation 18.48% 51.09% 30.43%
Table 12: Priority of information written on checks
From the study it is found that 42.39% of the suppliers and service providers thought
payment details that were written on the checks were most important information. About
39.13% of the suppliers and service providers recognized bill no. had very important
priority. TDS/VAT information and calculation had important priority to 18.48% suppliers

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and service providers. Around 51% of the suppliers and service providers thought that
TDS/VAT calculation had normal priority. To around 47% of the suppliers and service
providers bill no. was unnecessary factor.

Figure 24: Priority of information written on checks

8.12. Grading of information of suppliers and service providers
according to high priority

Payment details Bill no. TDS/VAT information

Logistics 20.00% 60.00% 20.00%
TVC 0.00% 75.00% 25.00%
Projects 77.78% 0.00% 22.22%
Newspaper 23.08% 76.92% 0.00%
Restaurant 33.33% 66.67% 0.00%
Procurement 50.00% 16.67% 33.33%
Rent a Car 66.67% 16.67% 16.67%
Security 70.00% 0.00% 30.00%
Courier 30.00% 50.00% 20.00%
Table 13: Grading of information according to high priority

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Figure 25: Grading of information according to high priority

From the survey it was found that 60% of the logistics service providers said that bill no.
is the information that had high priority to them. 75% of the TV companies said that bill
no. is very important to them. 77.78% of the project related suppliers and service
providers said that
payment details are very important to them. 70% of the security service providers
emphasized on payment details. Previously the information written in all checks only
contained payment details. As a result the suppliers and service providers had to come to
the GrameenPhone staffs for additional information.

8.13. Personal relationship with any employees of GrameenPhone

Frequency Percentage

Yes 26 28.26%

No 66 71.74%

Total 92 100.00%
Table 14: Personal relationship with the
From the study it employees of GP was seen that
around 28% of the suppliers and service providers had personal relationship with
employees of GrameenPhone Ltd.

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 Figure 26: Personal relationship with the employees of GP
8.14. Personal relationships help in quick transaction

Frequency Percentage

Yes 36 39.13%

No 56 60.87%
Total 92 100.00%
Table 15: Personal relationship helps in quick payment

From the table it is seen that 39.13% of the suppliers and service providers thought that
personal relationship help in quick transaction. 60.87% of the suppliers and service
providers thought that personal relationship do not help in quick transction.

Figure27: Personal relationship helps in quick payment

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 Chapter: 09

Observations, Respondents
suggestions & findings

9.1. Observations

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Some of the observations regarding the payment procedure and attitude of
GrameenPhone staffs, suppliers and service providers are as follows:

1. Most of the times checks arrive late from the banks.

2. Local Area Network of the office frequently brakes down making the completion of
job very harder.
3. User department and suppliers query about bills take a lot of time and thus hampers
the payment procedure.
4. In many cases it is seen that user department directly blame treasury department for
late payment although treasury department received the bill late.
5. Suppliers and service providers sometimes behave rude with GrameenPhone staffs.
6. It is seen frequently that user departments do not send the required papers to clear the
bills.
7. Sometimes user department send the required papers in late or do not send them at all.
8. ERP software conflict is always a major problem. Most of the work of treasury
department is done through ERP. So if it creates problem, doing work becomes very
hard.
9. Citi NA Upload Manager software occasionally creates problem and makes the
uploading a lengthy process.

9.2. Respondents suggestions

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A large number of suppliers and service providers have made suggestions about how to
improve the payment procedure in GrameenPhone. Some of the suggestions are randomly
selected and listed, as under, to help make the payment procedure more comfortable.

1. Suppliers and service providers must be notified through e-mail and phone when
checks come from the bank.
2. Suppliers and service providers must have easy access to GrameenPhones staffs
of treasury and user department.
3. Suppliers and service providers should be notified immediately why their
payment is on hold.
4. Their queries about bill no., amount, check no., TDS/VAT information and bill
description should be answered as soon as possible.
5. GrameenPhone should develop a system where checks can be directly sent to
beneficiaries.
6. Check distribution time (10:00 AM to 4:00 PM) should be made more flexible
before festivals like Eid, Christmas etc.

9.3. Implication of the findings

This research tried to find out the authentic information about the quality of payment
procedure of GrameenPhone Ltd. This research may also identify the faults in the
payment procedure. It is desired that this research may influence the tactics to make the
payment procedure more efficient and less time consuming. The major implications of
the findings are given below:

1. Many of the suppliers and service providers do continuous business with

GrameenPhone. When payment is made they become confused about which bill is
paid. So they always demand additional payment information. Although some
payment information is attached with the checks it is not enough. So the suppliers and

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 service providers always come to staffs to make query about payment information.
Their continuous querying hampers the regular work of the GrameenPhone staffs. It is
seen that only payment details is not enough for suppliers and service providers. They
also demand some additional information which varies from suppliers to suppliers. So
which supplier and service provider need which information should be identified and
provided accordingly with the checks.

2. It is seen that the average check collection time is very much high. Suppliers and
service providers come to every months 5th, 12th, 19th and 26th day to collect the
checks. But they have to wait for long time as the checks arrive late from the banks.
So banks systems should be more developed and GrameenPhone should make a close
contact with the banks so that the check arrival time can be minimized to the shortest
time possible.

3. Some of the suppliers and service providers do have personal relationship with the
suppliers and service providers. But most of them think that it do not help them in
quick payment. GrameenPhone employees may keep personal relationship as long as
it do not harm in any way to the payment procedure.

4. One of the major implications of the study is to determine the causes of

dissatisfaction of suppliers and service providers. They ranked late payment as a top
most cause of dissatisfaction, and then inaccurate transaction, redirecting, staff
attitude and lastly inaccessibility to GP staffs are their cause of dissatisfaction. If the
causes of dissatisfaction can be eliminated not only the relationship with suppliers
and service providers will improve but the overall payment procedure will be
developed.

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 Chapter: 10

Conclusion & Recommendation

10.1. Conclusion

GrameenPhones suppliers and service providers are an integral part of the road to its
success. GrameenPhone can not deny the role that they play for it. Moreover 70,000

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people directly or indirectly depend on GrameenPhone for their livelihood working as
vendors, contractors, suppliers and others. Every week GrameenPhone pay more than 50
million taka to more than 200 suppliers and service providers. So there is no room for
delay or error.

Every month the number of local suppliers and service providers are increasing in a rapid
rate. Delay and inaccurate payment to suppliers are always discouraging to them for
continuing business with GrameenPhone. Moreover it increases the chance of suppliers
claiming penalty and compensation. It also hurts the goodwill of the company. In an
industry where so fierce fighting for market share is going on, nobody can afford to do
so.

GrameenPhone had a good reputation of making quick payments to its suppliers and
service providers. Therefore regular research should be performed to check if the
payment system is lacking anything or not. The payment procedure should be kept ready
enough to run the operation flawlessly. This research was intended to do that.

It is always welcomed that this research should help others to be inspired and do more
related research to find out most efficient and accurate payment procedure for
GrameenPhone.

10.2. Recommendation

1. When expediting a transaction with a supplier or service provider, GP staffs should be

careful not to take more than 7 days to complete it.

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2. A close link with the suppliers and service providers should be maintained to let them
know the reason behind holding any payment for long time
3. Suppliers come to collect their checks on 5th, 12th, 19th and 26th day of the month.
There should be a system by which suppliers and service providers can be notified
after their checks have been issued from banks. Also the banks systems and
procedures should be upgraded so that the checks can reach in time. GrameenPhone
may consider sending the checks directly to the suppliers rather suppliers come and
collect the checks.
4. A system is needed to be developed where the information that suppliers and service
providers may reach to them via e-mail. This will save a huge amount of their own
and GP staffs time. It should be remembered that GP staffs spend huge amount of
time providing necessary information about payment to suppliers and service
providers.
5. The information that GrameenPhone staffs provide to the suppliers are not always
important. Instead of payment details; bill no. and TDS/VAT information can be more
important to them.

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ANNEXURE

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ERP : Enterprise Resource Planning
DFF : Data Flexi Field
BTS : Base Trans Services
GF : Green Field
RT : Roof Top
PO : Procurement
Non PO: Non Procurement
FC : Finance Control
FT : Foreign Treasury
LT : Local Treasury
GPC : Grameen Phone Center
GPDC : Grameen Phone Distribution Center
RMS : Regular Maintenance Services
EMS : Emergency Spares
BR : Bangladesh Railway
DD : Demand Draft
REB : Rural Electricity Board
PDB : Power Distribution Board
OPEX : Operating Expenditure
CAPEX: Capital Expenditure
DESA : Dhaka Electric Supply Authority
DESCO: Dhaka Electric Supply Company
DPDC : Dhaka Power Distribution Company

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