Chinese Telecom Operators & Success Strategies

 China has 3 major Telecom Operators China Mobile, China Unicom, and China Telecom All three were set up by the government, and still are majority state owned. Some of their high officials are still within Chinese government. There are also many small mobile operators based in different provinces.

 All Big-3 have stake in fixed & mobile business. All have been awarded 3G licenses this year (2009) and investing heavily in it. Last year government restructured the market and opened it for competition. This brought many merger and acquisitions.

 There are two main fixed line operators, China Telecom and China Netcom.

 China Telecom is the world’s biggest fixed line operator in term of subscribers.

 China Telecom bought one of the two China Unicom mobile businesses in order to enter mobile business.

China Telecom is performing best commercially. Out of total 640 million mobile subscribers, China Telecom has 44 million.

 China Mobile is the world’s biggest mobile operator with 500 million subscribers. It took over China Tietong, a small fixed line operator. China Mobile is 70% owned by CMCC (China Mobile Communication Corporation) & 30% by private.

 China Unicom, a smaller mobile operator acquired China Netcom.

 As a result all Big-3 are in both fixed & mobile business and are introducing new services in both areas. However China Telecom is doing very well. It encouraged its staff to innovate. Also, it asked its engineering staff to work along sales staff to understand “what customer is actually demanding”. China Telecom offered 3 new services mentioned below which became a success:

 1-    SMS based service which allows property developers and car dealers to target customers with automated text messages. CHINA TELECOM made 3 million RMBs in one year in Xiamen city alone. The existing customer data was used to launch the service.

2-    SMS based service for out-patients to make appointments, reduce waiting times and save from unnecessary visits.

3-    A lot have been done on bundling fixed and mobile services. One such service is simultaneous call ringing on both fixed line and mobile. And both display the same number while dialling out. It is a huge success in medium and small businesses, which have many staff on the road.

 Another important aspect is that CHINA TELECOM has started developing its own solutions (with hardware & software), based on its customer experience. Previously they just offered whatever was delivered to them by vendors like Huawei, Ericsson, NSN, etc., These vendors however lacked direct consumer experience hence their solutions were not exactly matched with what end user was looking for. Results are quite encouraging and may carry a lesson for other big operators.

 (October 2009)

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