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Opportunities and Challenges of Operating Both GSM & CDMA Networks Dr. William Li General Manager Marketing & Sales Dept.

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Presentation on theme: "Opportunities and Challenges of Operating Both GSM & CDMA Networks Dr. William Li General Manager Marketing & Sales Dept."— Presentation transcript:

1 Opportunities and Challenges of Operating Both GSM & CDMA Networks Dr. William Li General Manager Marketing & Sales Dept. China Unicom

2 2 Objective Objective  China Unicom and the Environment  Opportunities and Challenges of Operating Two Networks  Take the Opportunities and Face the Challenges  Progress Report and Future Challenges

3 3 Operate Both GSM & CDMA Networks  Unicom is the only carrier to operate both world class size GSM&CDMA network  As of the end of 2003, Unicom has: 73M GSM subscribers and rank #3 in the world 19M CDMA subscribers and rank #2 in the world  Unicom does not choose to operate two networks  It is a great opportunity and challenge in terms of technology, management, marketing, etc.

4 4 History of Telecom Reform in China  Unicom was founded as a result of telecommunication De-regulation  1998– Ministry of Post and Telecom was dissolved and Ministry of Information Industry (MII) was established.  China Mobile was spin off. China Telecom and China Satellite was established  China Telecom was split into two carriers: China Telecom and China Netcom  Now-- China has 6 carriers: China Telecom China Netcom (Fixed Line Operator) China Mobile China Unicom (Mobile Operator) China Satellite China Railcom (< 1% Market Share) Plus more than 4,000 VAS companies

5 5 The Only Integrated Service Provider Main Business :  Cellular Mobile Services ( GSM 、 CDMA )  National and International Long Distance Service  Data Communication Service  Internet Service  IP Telephony Service  Radio Paging Service  Satellite Communication Service  Local Telephony Services in 3 provinces GSM Uninet VOI P Radio Paging Data & Video Conference Wireless business generates more than 85% revenue

6 6  Jul – Launched GSM service in Beijing, Tianjin, Shanghai and Guangzhou.  Feb – Signed the frame contract of intellectual property with Qualcomm  Mar – Started CDMA network bidding process  Dec – Built a nation-wide CDMA network.  Jan – Launched CDMA network.  Mar Upgrade the network to CDMA 1X and launched U- MAX wireless data service Milestones Of Unicom Wireless Development

7 7 Milestone of China Mobile GSM Business  1994 – Launched the GSM service in Guandong province  1995 – Launched the GSM service in 15 province  1996 – Provided the nation-wide and international roaming  2001 – Introduced GPRS as a commercial trial  2002 – Launched GPRS & MMS in the nation # of Subs. Million Market Share

8 8 Objective Objective  China Unicom and the Environment  Opportunities and Challenges of Operating Two Networks  Take the Opportunities and Face the Challenges  Progress Report and Future Challenges

9 9 Opportunities Of Operating Two Network  CDMA provides the opportunity for Unicom to win the competition Rebuild the brand Achieve the bandwidth efficiency Offer fast data service in 2.5G Learn the success experiences form Korea and Japan Cost less to migrate to 3G in the future  More bandwidth resource & only CDMA license

10 10 Challenges Of Operating Two Networks  Very strong competitor: China Mobile  How to develop CDMA business without cannibalizing our GSM business  How to introduce CDMA service in a GSM dominant country 110M GSM subscribers and 8 years service history Mature handset production and distribution industry SIM card  How to position the two network services  Both network compete for the company resource: investment, management time, marketing efforts, etc. Great Challenge !

11 11 Market Share of 4 Major Carriers in 2002 Challenges (1) – A Strong Competitor China Mobile profits is more than 50B RMB

12 12  Generate the majority of the revenue and more than 100 % profits  Has growth momentum and great potential Challenges (2) – Important of GSM Business # subscribers ( 10,000 ) CDMA service introduced

13 13 Objective Objective  China Unicom and the Environment  Opportunities and Challenges of Operating Two Networks  Take the Opportunities and Face the Challenges  Progress Report and Future Challenges

14 14 Offer the Differentiated Service - Network Offer the Differentiated Service - Network Improve the Network Quality  Took less than one year to built a nation-wide CDMA network with a capacity of 15M subscribers in 2001  Upgrade the network to CDMA 1X within 15 months and increase the capacity to 35M subscribers in the early 2003  Started our 3 rd phase expansion in 2003  Spend more than 10B RMB to improve our GSM network in last 2 years

15 15 Creative Marketing Efforts  Marketing CDMA service by using detachable UIM card  Bundled the handset with service  Signed NBA star Yao Ming as a speaker person for New Horizon Brand (CDMA service brand) and become the Chinese Basketball Asso. (CBA) exclusive sponsor  Offer various voice and data tariff package and promote the marketing slogan of “Offer the choices to customers” on both network service. Offer the Differentiated Service - Marketing Offer the Differentiated Service - Marketing

16 16 Wireless Value Added Service  Launched 5 types of wireless data service based on CDMA 1X to exploit the fast transmission speed WAP Service Brew & Java Service GPS One Service PC Connection Card Multi Media Mail Offer the Differentiated Service - VAS Offer the Differentiated Service - VAS

17 17 In CDMA 95A Phase Position GSM service to the middle and lower end of ARPU customers. Position CDMS service to high and middle end of ARPU customers In CDMS 1X Phase (Positioning) Position GSM service to customers: Main usage – voice and SMS, international roaming (EU) Profile - Value sensitive Position CDMA service to customers: Main usage –Data, SMS, Voice Security Profile – Youth, Fashion, Profession Offer the Differentiated Service - Position Offer the Differentiated Service - Position

18 18 Handset Vendor sand Channels, and CP/SP Handset Vendor sand Channels, and CP/SP are Strategic Partners  Worked with channels and increase the outlet from a few thousand to more than  Established better communication channels with handset vendors to develop suitable product  The price gap between GSM and CDMA handsets are significantly reduced  Increased the CP/SP number and formed JV with SKT and Qualcomm to provide more contents Offer the Differentiated Service - Partners Offer the Differentiated Service - Partners

19 19 Objective Objective  China Unicom and the Environment  Opportunity and Challenge of Operating Two Networks  Take the Opportunity and Face the Challenge  Progress Report and Future Challenges

20 20 Results – Market Share Increase Increase the subscribers and market share rapidly (million)

21 21 Results – Revenues & Data Usage Increase  Increase the revenue more than 30% in 2003  More subs. use data service

22 22 Results – Wall Street Reward

23 23  To upgrade and expand both networks is great challenge  Offer GSM/CDMA dual mode system to resolve many issues: Provide CDMA customers to international roaming in EU Provide GSM customers to access CDMA 1X data service Resolve the number portability problems partially Future Challenges Future Challenges

24 Thank You!


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