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15.00%

17.00%

19.00%

21.00%

23.00%

25.00%

27.00%

29.00%

31.00%

2003 2004 2005 2006 2007 2008 2009 2010 2011

How can China Unicom use the iPhone to increase 5% How can China Unicom use the iPhone to increase 5% of the subscriber market share within 24 months?of the subscriber market share within 24 months?

MGMT 650B – Consulting Skills for Managers

Presented by Team D:BOHRA, Shilpa Rajesh; CHAN, Yat Hei; LIN, Michelle Lan Yan; MO, Siu Hei; TONG, Sze Man; TSE, Mei Yi Joyce

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. We accepts no liability whatsoever with respect to the use of this document or its contents. 2

Section [1]

Storyline

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Executive Summary China Unicom (“CU”), being the second largest mobile operator in China as well as globally, is facing a highly competitive market resulting with losing subscriber market share in China every year since 2003. In August 2009, CU partnered with Apple to launch iPhone 3G in China hoping to regain its subscriber market share.

SITUATION

China mobile subscribers has been growing rapidly but CU has not benefited yet losing on an average of 2% of subscriber market share each year since 2003.

How can CU use the iPhone to increase 5% of the subscriber market share within 24 months?

CU should cut iPhone handset price by 15% - 20%, deliver a clear message to potential subscribers that iPhone is a “lifestyle” mobile phone which can improve subscribers’ life and not just like any other smart phones, and reinvest its image as a premium operator.

1. iPhone handset price should be cut by 15% - 20%a) Mobile users complain current handset price is higher than grey market iPhone price. b) Distributors are making money

2. Deliver a clear message to potential subscribers that iPhone is a “lifestyle” improving life mobile phone and not just like any other smart phones

3. Reinvest its image as a premium operatora) Younger age group, high tech gurus, top management should be CU’s targeted customer segmentsb) Improvement in 2G and 3G network shows increase of subscriptionsc) From now and beyond 24 months, CU should build and develop its own data platform which can be used on

iPhone or any other smart phone which corresponds to the improving “lifestyle” image and subsequently into a premium operator.

COMPLICATION

QUESTION

ANSWER

RATIONALE

RATIONALE

RATIONALE

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Section [2]

Dummy Charts - Pricing

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Section [2]

Dummy Charts – Message

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3G - What do customers think so far?

47%

27%

0%

10%

20%

30%

40%

50%

60%

CU CT

% of respondent willing to switch number to operator

Of 300,000 respondents, 47% potential customers are more willing to change to China Unicom than China Telecom .

It could be due to the fact that these customers are aware that some of the more popular 3G handsets will only work on China Unicom’s WCMDA network.

Source: Market research report

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3G - What do customers think so far? (Cont’d)

% of respondent think pricing of data plan is acceptable

42%

16%17%

0%

10%

20%

30%

40%

50%

60%

CT CU CM

Of 300,000 respondents, 42% customers think pricing of China Telecom is more reasonable comparing to 17% of China Unicom.

This could be due to the fact that China Telecom’s data plan charges is time based instead of the usual byte based, which is more “user friendly” in nature.

Source: Market research report

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High-speed mobile internet access is the most likely service that will gain interest from customers as it is nominated as the most appealing 3G service.

The most appealing 3G applications is

56%

15%

27%

0%

10%

20%

30%

40%

50%

60%

70%

Mobile Internet Video Call Mobile TV & othersSource: Market research report

3G - What do customers think so far? (Cont’d)

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Is iPhone Special? Can iPhone Deliver? Apparently, what iPhone can deliver to customers in China is similar to what OPhone is

offering by China Mobile and China Telecom

Chinese customization

Low handset production costs

Software platforms Apple store Fetion, Monternet, Mobile market

Network standard advantage

(with 85% of the world)

China MobileChina Unicom

iPhone OPhone

China Telecom

iPhone Vs OPhone

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Potential for cheaper prices and promotions is the number one attractions for customers to switch to China Unicom

Reasons for potentially shifting to Unicom

0% 20% 40% 60% 80%

Don't know / Others

Handsets

Better technology /Data speed

Network / Coverage /Service

Trust the brand

Price / Promotions

Source: Market research report

Reasons for potentially shifting to Unicomunder MNP

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Section [2]

Dummy Charts – Strategy

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Strategy 1 -Targeted Customer Segments The customer segment should target the _______age group, high technology gurus, high

management employees

From ______

Strategy to target customers in one years time

Source: Market research report

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. We accepts no liability whatsoever with respect to the use of this document or its contents.

Strategy 1 -Targeted Customer Segments Any more charts/ data for the segment?

Strategy to target customers in one years time

Source: Market research report

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. We accepts no liability whatsoever with respect to the use of this document or its contents.

Strategy 2 - Improve its telecommunication network RMB38.7 billion (US$5.6 billion) has earmarked to develop its 3G business in 2009 but it still

has a weak telecommunication network.

At the moment, China Unicom has the least telecommunication ports in China as compared with its competitors.

Source:

No. of Telecommunication Ports Own By Each China Mobile Operator

0

100

200

300

400

500

China Mobile China Unicom China Telecom

Operators

Po

rts

(in

th

ou

sa

nd

s)

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Success Case from China Telecom China Telecom was granted with the WCDMA technology in ________ from China Unicom.

China Telecom has spent RMB ______ billion in improving its telecommunication network After improving its network, China Telecom has an increase of ___% of subscription We anticipate if China Unicom improves it telecommunication and 3G network, it can benefit

subscription increment like China Telecom.

Tim, please kindly give us info on the subscription improvement and the amount that China Telecom has spent on improving its network. Thanks.

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To maintain and sustain subscription growth in 24 months and beyond, China Unicom should develop its own data platform that can be used on iPhone and other smartphones.

The data platform should correspond to the “lifestyle” message and should be unique to each customers.

The data platform would be the killer weapon against its competitors instead of purely rely on Apple app store or other 3rd parties data platform.

Any Success Stories?

Strategy 3 - Develop its own unique data platform