Analysis of China´s mobile communications ´virtual operator´ (MVNO)

Analysis of China´s mobile communications ´virtual operator´ (MVNO) Analysis of China’s mobile communications ‘virtual operator’ (MVNO) China’s mobile communication market in this particular environment, has a duopoly known as ‘China Mobile’ and ‘China Unicom’ (Although China Telecom has also said categorically that he should be in the mobile communications market slice; but by all public I know, its so-called market prospects due to various reasons difficult to truly change or that is not yet change the current pattern of Chinese mobile communications market). Two Chinese mobile market boss in this huge market enjoying ‘competitive’ in the fun and the envy of the world’s mobile operators have the eye. It is understood that, as of first quarter of 2003 so far added 14.875 million mobile subscribers, reaching 221.491 million. Mobile users, the average monthly increase this year, about 4.958 million, but mobile phone penetration rate in China is only 16.2 percent, a huge market capacity. In the mobile communications market, the existing mobile network operators, due to a huge market capacity, in themselves have the extra resources are not used, or that there is no effort to develop the packaging of all business situations; 1 put some out of business segments from the partners development, packaging, and final sales to customers, also produced a so-called ‘virtual operator’ (virtual operators, who do not have basic telecommunications networks, telecommunications or telecommunications-related businesses operating manufacturers; they are because they can not be established between 1:00 a huge network of communications infrastructure, or that it has no advantage to build a huge network, and lease the existing basic network operator’s network or products, improve product or business value-added services, product or business segmentation, personalization, and then through various way to provide customers with a variety of telecommunications services); Virtual Network Operator concept is only in recent years in the international telecommunications market, the popular. That the market’s needs, social division of labor results. From the co-operation interests of both parties, it is possible to reach a win-win results; the same time, market segmentation, service improved, end-users in all aspects of the individual requirements have been met, for the user, but also a ‘win’ the satisfaction of the Results. In some countries abroad, the mobile communications have long been led through a virtual 2 operator and the mobile industry ‘value chain’ healthy development success story. Britain’s Virgin Mobile (Virgin Mobile) on the adoption of the use of One 2 One’s network, through a series of business segments, packaging, continuous analysis of customer needs through innovative services to meet customer’s individual requirements; success operates mobile telecommunications services. In 2001, the British magazine Mobile Choice as the best years of network operators ‘2000 ‘. China’s huge mobile market also need to introduce various aspects of new blood to complement and promote the development of the mobile communications market; to make their own mobile communications industry, the ‘value chain’ to achieve ‘win-win’ (the basis of network operators, virtual operators and users) the results of a full and healthy development. In the current information on China’s special national industrial policies, the huge mobile communications market has also conceived with Chinese characteristics, mobile ‘virtual operator’ (MVNO). At present, because the national industrial policy, the uncertainty, the domestic Ministry of Information Industry have no other company mobile communication network licensing policy (Hong Kong, provides the basis of network 3 operators can be 30% of the resources of a virtual network operator business). As a result, many cities in the country each company can only say that mobile operators in the name of the ‘walking a fine line’, put it bluntly, currently engaged in the so-called a ‘virtual operator’ companies, most of the sales agency also simply have been moved or China Unicom’s mobile product, and then according to their different protocols in the mobile communications market share of a cup of ‘share’. For the so-called virtual operators important product segments, improve service and other value-added business, and there is not much to upgrade, and even some of the existing network operators rely on the service; the one hand, the reasons for the company’s strength; the other On the one hand, there might be reasons of national policy, coupled with the Chinese market’s unique cultural environment that created the mobile communications market with Chinese characteristics ‘virtual operator’ (MVNO). Let us such a virtual operating from a domestic company’s operating condition, to analyze the internal virtual operator. At present, the country engaged in a virtual operating a business that larger companies are: China Motion, the National News, 4 TOM, Lenovo, Honland 95 and so on, but the only Mobile Virtual Network Operator in China Motion, the National News, several companies ( which Honland 95 other telecommunications media, telecom application platform and basic telecommunications resale and agents, etc.). Scale can only be made when the number of Motion. Motion earlier Internet technologies will be combined with traditional paging, paging network launched a series of operations, effectively expanding the market, and accumulated good experience in value-added services; combined with its Hong Kong, China Motion Telecom in 2001 Office of the Telecommunications Authority, Hong Kong was awarded a license officially become Hong Kong’s Mobile Virtual Network Operator, has a unique business philosophy, advanced management experience and diversified business brings a unique resource. In the domestic mobile market, in addition to its original covers river north and south of the country paging system, a real sense of the Mobile Virtual Network Operator or have co-operated with the Guangdong Mobile; Shenzhen in Guangdong, China Motion ‘agent’ of the mobile part of the phone business; 97 the beginning of the 5 joint a few to mobile bought 25 million mobile customers, resources (for the period 7 years); China Motion in sales at the same time has also set up its own billing system platform and in cooperation with the mobile communication field in the outsourcing of the more important value-added business units: Voice Services 1860,1861, etc. (the current mode of cooperation due to moving overseas listing will be suspended), while the accumulation of a series of unique market, customer resources and operational experience. China Motion is currently the virtual path more successfully, it should be said, and is the first one, is currently the largest Mobile Virtual Network Operator (MVNO) (whose company has more than 200 million paging subscribers, tens of thousands of mobile phone users, a thousand cluster users, etc.). However, in the domestic market, pre-co-operation with mobile is about to expire, followed by the development is still being observed. Last year’s third quarter, Shenzhen China Motion has reorganized its mobile communications sector, a subsidiary of China Motion Telecom Co., Ltd. Fujian, adjust the direction of the establishment of strategic cooperative partnership Fujian Unicom began to enter the Fujian Unicom’s GSM network services; in Fujian to create their own mobile Communications 6 brand ‘Unicom equation 100’ (Group had intended to take the cooperation model rapidly across the country to establish a strong ‘virtual platform’, so that the policy became clear, the Group will be able to grab a logical virtual market in the Mainland. so its existing resources, experience a virtual path in the country will certainly be able to develop faster success). Fujian, China Motion Telecom Co., Ltd. re-operated over the past year, in terms of subscribers learned from Fujian Unicom indeed accumulated tens of thousands of customers, but because of reorganization of the company for the client resources, service innovation, etc., Xu is a special Mobile Virtual Network Operator the environment, Fujian ‘equation 100’ only stay in a simple voice information services, various value-added services and is not in itself compared to China Unicom in terms of how much improved; so the quality of client resources can not be objective, ARPU value is low, and bad debts, loss rates are relatively high; Fujian China Motion’s ‘equation 100’ in the service package may be on policy grounds, they can only now, after the interchange itself; allowing Fujian Unicom China Motion mobile products and there is no difference between their own products oriented, so the two sides said co-operation in the market and the 7 channels of the two sides still have a certain degree of conflict, as well as the two sides accused each other marketers, influencers cooperation in depth; the company’s Virtual Network Operator does not get rid of the domestic development of the virtual operator is not specific, not a scale of cycle. (Its market position and prospects of a comparative analysis will be conducted later) On the other hand, last June 8, concern the formal operation of China Unicom CDMA network; but they are 7 million goal in early rhetoric, in fact, when the formal operation, the time more than half of the task completed only about one million, so that China Unicom had to move quickly mobilization of all forces to ensure that ‘Zhuang’ not renege. All of a sudden, some urban development, with Unicom’s new ‘strategic partner’. Those partners are pleased that the claim will become another one of China Mobile Communication Networks ‘Virtual Network Operator (MVNO)’. Let us take a look at how they co-operation; the so-called virtual operations evolved to what extent. Take the example of Fujian, it was reported in July in Fujian, Fujian Unicom headquarters of the task given to the task accomplished only 10% in this case, the Fujian Unicom to absorb a large number of ‘who wish to 8 become a’ virtual operators’ cooperation partner ‘. Fuzhou, for example: In the circumstances, Fuzhou, mobile communications sector, there a ‘dark horse’: Sharp Corporation, Fuzhou days. Sharp Corporation was funded by the Fuzhou days to buy tens of thousands of Fuzhou Unicom’s C network numbers (in the Fuzhou region sales), first of all ensure Fuzhou, Fujian Unicom’s C network assignments, followed by the ‘slow’ and Fuzhou, Fujian Unicom jointly contribute to sales of (which is responsible investor sharp days: ‘raising’ unsold C network numbers, the establishment of marketing platform, and so on; involved in all aspects of product design: such as a simple packaging, etc.; participate in the construction of channels and the provision of all aspects of the relevant personnel; and an important innovation in a range of value-added services to enhance the related after-sales and the current value-added services will be provided by the Unicom itself, completed). Sharp’s current days this kind of ‘virtual operator’, perhaps that may be due to just intervene in the market, all aspects of policy, environmental and other reasons it could not immediately provide customers with innovative services to enhance their own influence and so on; and sharp to say, This 9 virtual operations, even if the current profits to their success, and gives the feeling that ‘good cool shade under a tree’, they come to the right way, find out the ‘cool shade tree’’’ only, for the so-called virtual operator, then boast about . Imagine, such a virtual operation, with a sales agent What’s the difference, nothing more than your money into big point, you completely on the interchange will ship only; and operated by the direction of the last, if not adjusted, in turn, their development China Unicom said that the future will be ‘tree’ itself is a restriction? But they ultimately did not reach the value of the virtual operating their own purposes? The development of their own turn to what look like? But this way, sharp company in Fujian, Fuzhou days of China Motion Telecom Co., Ltd., Fuzhou has become another one after the so-called mobile ‘Virtual Network Operator (MVNO)’. While the other cities in Fujian, Fujian Unicom are the same absorbed the various partners. They created the so-called mobile virtual path. China Mobile ‘Virtual Network Operator’ character analysis: 1: technical aspects, that is, in terms of the so-called 10 asset-specific; In China the so-called Mobile Virtual Network Operator (MVNO); due to policy reasons, the manufacturers do not have a proprietary communications products. No exclusive ownership can only be attached to the mobile market on the ‘duopoly’ given by the various products, policies to survive, for the virtual operator is very important business segments, services, mix of resources for innovation, and not independent of the ‘development right ‘or is subject to’ duopoly ‘of the market factor requirements. Its so-called operations can only be said at present the majority of Mobile, China Unicom a larger sales agents, of which due to market demand, mobile market, canceled most of their sales profits (because the market is on the ‘duopoly’ themselves channels also control the virtual operators sell products). The survival of enterprises rely on only Mobile, China Unicom to give a simple cost voice into. In fact, they did not really operating mobile networks. Their cooperation to a large extent with the more complex the human factor. As we know, for consumers, it is important that they feel the service; and a virtual operation, not have their own network, technology, service innovation no development if he was a healthy development? 11 Channels, because now our ‘virtual operator’ products are largely owned and Mobile, China Unicom is no difference in their own product-oriented, and even some marketing models are no different (basically all the public to goChannel )This resulted in the cooperation between the two channels of personnel conflicts. Just think, in the mass channels of cooperation, said after the formation of a common channel, the two sides complement each other resources; but China Unicom, mobile development for so many years, unless the personnel factor, otherwise they will have a great vacancy channels do? In the targeted direct marketing, the two companies seemed to have with its own ‘Great Customer Center’. Although we said that competition is conducive to promoting the improvement and development of the two parties, but whether from service or channels in the mobile market as the protagonists of the ‘duopoly’; and our virtual operators there is no point in innovation, could be like The short, we ‘virtual operators’ business pain again. It is said that Fujian Unicom partners of the present situation is difficult. The industry statistics, this year, Fuzhou Tianrui buyout last year the number has not sold, because of its buyout numbers do not sell access to the Internet in its number of resources 12 must pay the associated costs; we not to say whether the profit, so that the virtual operating For the partners who have ‘Banded’ feeling. However, the company said that Fuzhou Tianrui C network of cooperation with China Unicom in Fujian was the most successful. This year, Fujian Unicom Unicom headquarters to a new task, so Fujian Unicom began a joint new strategic partners. Leaving aside the Unicom our practice, but you can imagine, this so-called ‘virtual operator’ situation. Fujian, China Motion Telecom Co., Ltd.. Xu is the various factors to consider co-operation in the C network link the whole country last year, they did not fall into the ‘sensational effect’ on. But based on G network and C network terminals, although behind the net in the C terminal platform is built on, Xu is operational reasons, they fade out of the mobile terminal market, at present only to promote its Unicom ‘Equation 100’ of the products. Fujian, China Motion mobile terminal agency is not successful, but its virtual operations want to create channels for mobile terminals into a large control platform to expand its new profit point, right partners also expressed a greater willingness to cooperate and resources to supplement , to provide a more direct mode of operation of Terminal Services and other reference can be 13 analyzed. 2: Transaction cost economics in the limited rationality of individualism and the opportunistic behavior of property in this regard interpretation. China’s mobile communications market, due to the existence of duopoly and national policies of uncertainty, resulting in China’s mobile market characteristics, the ‘Virtual Network’. In the transaction cost economics and behavioral characteristics of aspects of personnel; to maximize the return on the relationship, for example, this time the trust relationship between actors is essential. In other words, China’s mobile market currently features a ‘virtual operators’ role and the Chinese mobile market duopoly between: trust is very important. In fact, our current so-called ‘virtual operator’ it is entirely one-sided dependence in the duopoly of the body, she really on the network is not independent on the virtual operator, and did not use innovative services to attract and consolidate their so-called Virtual Network Operator position. In the process of cooperation, if present, our ‘virtual operator’ can not meet its dependency ‘tree’ demands, or even because two personnel changes occurred during operation of the policy 14 inconsistent and the relationship of trust and confidence the problem, then their transactions must not be a fair and solidarity from the point of view. All that is possible to zero. China Mobile ‘Virtual Network’ Way Out Thoughts At present, national policy uncertainty, many companies can not wait until they think the so-called ‘bright future’ on the day then? So, like in the mobile network operators in this regard on the points in a cup of ‘share’ or wants to wait until the ‘bright future’ to seize the initiative before, access to markets for the future development of accumulation of resources, experience. Well, now we must adjust the mind to adjust the orientation of cooperation; in the process of co-operation can not be completely dependent on ‘duopoly’; in co-operation, first of all as far as possible to ensure product differentiation and mobilize all relations or marketing displays all be able to prove their ability to regard to some of the products entirely by their own promotion, marketing, and then as much as possible to be innovative in the product after-sales service, (for example, Virgin’s portfolio of foreign innovations: Adoption of the Virgin mobile phones can be carried out shopping, travel, room booking, but also can be purchased or leased Virgin Music retail CD, 15 recorded in photographs, etc., through their own words to say now is not just a mobile phone in). If it is an exclusive promotion, marketing, and in the letter regulators allowed, the two sides set the tariff case, once the promotion is successful, all aspects of confidence, trust, recognition, after being elected in the subsequent process of cooperation the two sides will be more in-depth. And so, in the present cooperation and national policy in the future, if circumstances permitted, for enterprises to enhance their marketing capabilities and effectiveness are very beneficial. In the channels, to walk on two legs. While there are many enterprises and the ‘duopoly’ of cooperation, we can see that China Unicom, move also allows part of the ‘virtual operator’ go public channel, but the channel will definitely result in co-operation to repeat the unpleasant; then the channels, but also consultations, adjustments, mainly under direct or China Unicom, move that the weaker aspects of their own, so that you really want people to feel is a useful complement to such opportunities for collaboration between the partners will be more. At present, market, China Motion reason for the virtual road to more successful, largely not because they have a better 16 chance of property, also in the ‘know-how in terms of assets,’ nor is there much advantage; but because it has a stronger sales of its network platform. There is a strong sales network platform, even if no opportunities are generated, but the level of confidence of both sides, will also be greatly enhanced. From the cooperation and corporate earnings and other aspects, the opportunity will also arise. In the present communication, we have to mention a significant impact on link, that is, mobile phone manufacturers of this part. In China, the current mobile phone manufacturers and operators in co-operation is also part of a simple vendor relationships. The true sense of cooperation, from the integration of resources, etc., there is no breakthrough. Basically, the mobile phone manufacturers to go its own way, operators do their own slice of the cake; This often resulted in duplication of resources. Then we can seize the virtual operator is currently our traditional carriers, the relatively weak links, strengthen and mobile phone manufacturer co-operation. Such as mobile phone manufacturers are now a lot of promotional gifts, to truly meaningful gift to customers less, have now been sent to any wallet, fans, etc. so that customers do not feel useful things. Imagine if the carriers to 17 work with handset manufacturers to integrate its resources to number of machine bundle, let us not to say that behind the co-management of resources is now both advertising and promotional costs enough to virtual operators, the cost of the early stage of the card body, while the Handset manufacturers can also by strengthening co-operation with operators to enhance their own influence, to expand sales. A win-win outcome, why not. At the same time, through the two-channel power control of the channels is a big improvement. Therefore, in the present circumstances, the virtual operators to have a strong marketing capabilities, can have independent control channels for products to the marketing capabilities. In operation must also be diverse. Can not be completely dependent on ‘trees’ survival, because it is good enough to enjoy the shelter under a tree, but equally its constraining your growth, but also by the ‘litter’ threat. Diversity of operating, we should strengthen ties in all aspects of development, such as a proxy for mobile terminals, so that only temporarily because of a policy to alleviate the difficulties brought about, but also an effective control channel. Only with the market, the ‘tree’ side by side with the growth of resistance to the market with the ‘storm’, work 18 together to ‘resist the enemy’ development. Although the initial process was rather difficult, but for virtual operators, since only then can have a healthy development, and grow. 19