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1、CONFIDENTIALChinas Mobile Telecom ServicesIndustry OverviewGCOPracticeDevelopmentMay2002ThisreportissolelyfortheuseofFirmpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionwithoutpriorwrittenapprovalfromMcKinsey&Company.ACKNOWLEDGEMENTS AND REFERENCESMGMs and CSS involved in the r
2、elevant studies include the following:TonyPerkins(BEI)StefanAlbrecht(BEI)ChipperBoulas(HKO)PeterKenevan(TOK)PerchowJosephChang(SHA)AndrewWu(HKO)HaiWu(BEI)JaneXing(HK)YiFeng(BEI)ShengFLi(SHA)YoshinobuTakanuki(TOK)GraemeHunter(JOH)JuliaYang(BEI)EricXu(BEI)JasonLiu(BEI)ShirleyChen(BEI)The series of PDs
3、 include the following:#ChinaMacroeconomicEnvironment#ChinasMobileTelecomServiceIndustryOverview#ChinasInternetIndustryOverview#ChinaTelecomEquipmentandServicesOverview#ChinasMobileHandsetSectorOverview#ChinaTelecomIndustryRegulatoryOverview#KeySuccessFactorsandCaseStudiesofMNCsEntrytoChina1麦肯锡中国移动总
4、体战略e文版KEY MESSAGES1.Chinasmobiletelecomservicemarketishugeandfastgrowing,representingUS$21billionmarketsizein2001andUS$38billionin2005.Thismarketissupportedbytheworldslargestsubscriberbaseat145million,alreadycomprising15%oftheworldstotalin2001andgrowingtopotentially218millioninalowcaseor300millionin
5、ahighcaseby20052.ThecompetitivelandscapeformobileserviceshasevolvedfromasingleregulatorandoperatortotodaysduopolyofChinaUnicomandChinaMobile,bothofwhomareunassociatedwiththeMinistryofInformationIndustries.AsecondbreakupofChinaTelecomisexpectedtoformtwolargetelecomoperators,ChinaTelecomandChinaNetcom
6、Group,whoarelikelytoreceivemobilelicenses.Afifthtelecomoperator,ChinaRailcom,alsohasthepotentialofreceivingathirdgenerationlicenseandbuildingamobilebusiness.Fornow,ChinaMobiledominatesthemarketwith82%valueshareand72%subscribershareandownsmuchofthehighvalueuserbase.Howeverchurnisalreadyhighandisexpec
7、tedtoincreasewithcontinuingpricingpressuresandincreasedcompetition.3.WirelessdataservicesareexpectedtogrowquicklyinChinatoamarketofpotentiallyoverUS$4billionby2005,usedby43%ofallmobileusers.Interestfromconsumersurveyshavebeenhighandoperatorsandotherplayersareactivelybuildingservicesinthemarket.While
8、earlyhavefailedtocatchon,SMShasgrownexponentiallywithupto20billionSMSmessagesin2001.Theearlyadopterswillbemobileprofessionalsandmodernyouth,whowillrequireservicesanddevicestailoredtotheirneeds.4.Regulatorychangesloom,particularlywiththeaccessionofChinatotheWTO.WhileforeignerswillbeunlikelytosetupMVN
9、Os,WTOwillallowgreaterparticipationofforeignersinbasicandvalueaddedservices,althoughgeographiclimitationswillexistthrough2004andChineseplayerswillberequiredtoownatleast50%oftelecomserviceventures(51%forbasicservices).Regulatoryrisksremain,withnomeanstoappealregulatordecisions,unclearinterpretationof
10、regulationincludingWTOcommitments,andthegovernmentstrackrecordofintransparentandunpredictabledecisionmaking.(SeeseparateregulatoryPDfordetails)AppendixPlayersprofiles3Gtechnologystandardschoices2麦肯锡中国移动总体战略e文版KEY MESSAGES1. Chinas mobile telecom service market is huge and fast growing, representing
11、US$21 billion market size in 2001 and US$38 billion in 2005. This market is supported by the worlds largest subscriber base at 145 million, already comprising 15% of the worlds total in 2001 and growing to potentially 218 million in a low case or 300 million in a high case by 20053麦肯锡中国移动总体战略e文版1997
12、-2001 MOBILE SERVICE REVENUE GROWTH OF 30% CAGR HAS OUTPACED OTHER TELECOM SERVICE SECTORS AND IS PROJECTED AT 16% THROUGH 2005RevenuesUS$BillionsCAGR vs. other industries (1997-2001)PercentMobileFixedlinePagingCAGR30%CAGR16%Source:DeutscheBank;McKinseyanalysis4麦肯锡中国移动总体战略e文版* Revenuesdonotequalthep
13、roductofARPUassubscriberfiguresareprovidedforyearend,notaveragesubscribersduringayear.Detailedinformationonthetimingofnewsubscriptionsandchurnrequiredforthecalculationofaveragesubscribersduringagivenyearisnotavailable*AllCAGRsarecalculatedontheannounceddataSource:DeutscheBank;JPMorgan;MIIEXTRAORDINA
14、RY SUBSCRIBER GROWTH IS THE PRIMARY DRIVER OF REVENUE EVOLUTION, MORE THAN MAKING UP FOR LARGE DECLINES IN ARPU DUE TO STIFF COMPETITIONMobile revenues* $BillionsNumber of subscribers low case MillionsCAGR 30%CAGR 16%CAGR 83%ARPUUS$/monthCAGR -24%CAGR -7%PenetrationinitiallylowGovernmentbackingforin
15、creasingsubscribernumbersRelativelylowfixedlinepenetrationLow-endprepaidsubscriberincreaseDrivers DeclineduetoincreasedprepaidandlowerspendingbylateentrantsTariffreductionascompetitionincreasesSlightlyoff-setbyincreaseindatatrafficinlateryearsCAGR 19%20823526329117161515AnnouncedEffective5麦肯锡中国移动总体战
16、略e文版*05forecastuselowcase,netsubsafterinactiveandmulti-sim-cardreduction*MajorEuropeancountriesinclude:UK,France,Italy,Germany,Netherlands,Spain,SwedenSource: JPMorgan;WEFA-WMM;MII;McKinseyanalysisJapanCHINA IS THE WORLDS LARGEST MARKET IN TERMS OF SUBSCRIBERS, HAVING OVERTAKEN THE US IN 2001USMajor
17、European*countriesCAGR = 30%CAGR = 14%CAGR = 7%Number of mobile subscribersMillionsCAGR = 13%20002005Chinalowcase*Chinahighcase*CAGR = 22%6麦肯锡中国移动总体战略e文版CHINAS MOBILE SUBSCRIBER BASE IS GROWING MORE RAPIDLY THAN ANY OTHER MAJOR MARKET, COMPRISING 15% OF WORLD TOTAL IN 2001* Afirca,EasternEurope,Midd
18、leEast,Canada* Forecastof02-05usethehighcase,netsubsafterinactiveandmulti-sim-cardreductionSource: JPMorgan;Gartner2001;DeutscheBank;MerrillLynch;PiperJaffray19971998199920002001E2073004827279651,1781,3931,633100%=Global mobile subscribersMillionsubscribers;percentWesternEuropeUSSouthandLatinJapanan
19、dAsiaPacificChina*Restofworld*CAGR1997-2005percent2918452847452002E 2003E 2004E 2005E1,8507麦肯锡中国移动总体战略e文版CHINAS MOBILE MARKET IS PROJECTED TO GROW SIGNIFICANTLY*02-05forecastarenetsubsafterinactiveandmulti-sim-cardreductionSource: IDCreport;JPMorganreport;McKinseyanalysisNet subscriber* additionsMil
20、lions199719981999200020012002E2003E2004E2005E10847133-98-4711Annual growth Percent1237912131516PenetrationPercent47.143.946.345.75.511.516.939.435.9LowcaseHighcaseLow10847103-9225-13HighLowHigh12379121619238麦肯锡中国移动总体战略e文版0%5%10%15%20%25%CHINAS SUBSCRIBER BASE OF 218 MILLION IMPLIES A 47% PENETRATION
21、 OF AN ADDRESSABLE MARKET OF 460 MILLION BY 2005*Lowcase,netsubsafterinactiveandmulti-sim-cardreductionSource: JPMorgan;DRI;A;Literaturesearch;Analystreports;TeamanalysisIncome per capita(US$p.a.)2001AddressablemarketNumberofmobilesubscribersImpliedpenetrationoftheaddressablemarket2005E345mn145mn42%
22、463mn218mn*47%China income distribution and addressable marketPercent1,8151,77220012005Chinasaddressablepopulationformobileservicesisprojectedtoincreaseby8%p.a.forthenextfiveyearsto460millionin2005Thekeyassumptionsindeterminingtheincomethresholdare:Chineseconsumerswillingtospend5-10%oftheirincomeonc
23、ommunicationserviceshigherthantheaverageof3.5-4%formoredevelopedmarketsasagreaterportionofincomeisavailablefornon-essentialgoodsasaresultofChinasrelativelylowlivingcostHalfofthisassumedspentonmobileservices(5.5%)UnicomsprepaidARPUwilldecreasefromUSD8.3for2001toUSD8.1for2005;thereforethethresholdinco
24、mewilldropfromUSD1,815(8.3*12/5.5%)for2001toUSD1,772for2005(8.1*12/5.5%)2005Addressablemarket:35%Addressablepopulation:460mnpersons2001 Addressablemarket:27%Addressablepopulation:345mnpersonsPercent of population9麦肯锡中国移动总体战略e文版MOBILE SUBSCRIBER PENETRATION OF LESS THAN 7% IN 2000, LEAVES SIGNIFICANT
25、 ROOM FOR GROWTHSource: JPMorgan;IDCreport;Gartner;Literaturesearch,EIU100%199619971998199920002001E 2002E 2003E2004E 2005EMobile subscriber penetration in 2000PercentItalySwedenNetherlandsUKSpainGermanyFranceUSChina*AllsubscribersDataservicesubscribers1,2181,2301,2421,2541,2651,2761,2871,2981,3091,
26、319As percentage of total population low case*Millions(totalpopulation)ChinaUrban*02-05forecastarenetsubsafterinactiveandmulti-sim-cardreduction*Penetrationovertotalpopulation*Penetrationoverurbanpopulation.0.61.01.92.96.68.91.12.03.97.10.412.013.415.016.410麦肯锡中国移动总体战略e文版CHINAS RICHER PROVINCES GENE
27、RALLY HAVE MORE SUSCRIBERS AND ARE GREATER PENETRATEDPopulationMillionsPenetrationPercent,2000Subscriber CAGRPercent,1998-2000Number of subscribersMillionsProvinceGuangdongLiaoningZhejiangJiangsuShandongFujianHeilongjiangShanghaiHebeiSichuanBeijingHenanAnhuiHubeiHunanSource: ChinaStatisticalyearbook
28、,JPMorganReport,McKinseyanalysis11麦肯锡中国移动总体战略e文版WHILE THE POOR WESTERN AND INTERIOR PROVINCES HAVE LESS SUBSCRIBERS AND ARE LESS PENETRATED* Growthratefrom1999-2000Source: ChinaStatisticalyearbook,JPMorganReport,McKinseyanalysisPopulationMillionsPenetrationPercent,2000Subscriber CAGRPercent,1998-200
29、0Number of subscribersMillionsProvinceJilinGuangxiYunnanShaanxiChongqingShanxiTianjinInnerMongoliaJiangxiGansuXinjiangHainanNingxiaQinghaiTibetGuizhou12麦肯锡中国移动总体战略e文版KEY MESSAGES2.The competitive landscape for mobile services has evolved from a single regulator and operator to todays duopoly of Chin
30、a Unicom and China Mobile, both of whom are unassociated with the Ministry of Information Industries. A second breakup of China Telecom is expected to form two large telecom operators, China Telecom and China Netcom Group, who are likely to receive mobile licenses. A fifth telecom operator, China Ra
31、ilcom, also has the potential of receiving a third generation license and building a mobile business. For now, China Mobile dominates the market with 82% value share and 72% subscriber share and owns much of the high value user base. However churn is already high and is expected to increase with con
32、tinuing pricing pressures and increased competition. 中国管理中国管理资讯资讯网网 中国管理中国管理资讯资讯网网13麦肯锡中国移动总体战略e文版CHINAS MOBILE OPERATOR LANDSCAPE HAS EVOLVED SIGNIFICANTLY, CULMINATING IN SECOND BREAKUP OF CHINA TELECOMNomobilelicensescurrentlySource: Literaturesearch;EIUPyramid;IndustryreportsChinaTelecomChinaUni
33、comBecamethesecondmobilenetworkoperatorinmid1994However,ChinaTelecomasthesoleproviderofbothbasicandwirelesstelephonyservicesmadeitdifficultforUnicomtogrowChinaUnicomChinaRailcomChinaUnicomMinistryofPostsandTelecommunicationsCreatedin1994whenformerMPTseparatedintoregulatoryandoperatingfunctionsChinaT
34、elecomownershiptransferredtoMinistryofFinance,withregulatoryfunctionsplacedinthenewMinistryofInformationIndustries(MII)ChinaTelecomChinaMobile(CMCC)ChinaTelecomChinaMobile(CMCC)Underthegovernmentsanti-monopolyplan,inthe1sthalfof1999,ChinaTelecomwassplitinto4operatingcompanies:CTfixed,ChinaMobile,CTP
35、aging,CTSatelliteThechangebecameofficialonApril20,2000Priorto1994,theMPTactedastheregulatorandsoleoperatoroftelecommunicationsIn1993,announcementwasmadetoseparateoperatingandregulatoryfunctionsalongwiththeestablishmentofa2ndoperatorGreatWallEstablishedin1995toharnessPLAsradiospectrumThecompanyundert
36、akes“theCDMAproject”atthedirectionofthegovernmentGreatWallDuetogovernmentcommitmenttoseparatePLAfromcommercialactivities,GreatWalldissolvedwithdecisiontotransferCDMAassetstoChinaUnicommadeinOctober2000(transferyettobecompleted)2ndlargestfixedlinenetworkEstablishedDecember2000OfferslimitedGSMserviceo
37、veritsrailwaynetworkPre 1994 Regulator and Operator1994 to 1999Virtual Monopoly1999 To 2002 Deregulation/Breakup2002 and beyond 2nd breakupand future landscapeChinaNetcomEstablishedinSept.1999withinternetbackboneLikelylicensewinnerJitongJitongSetupin1994todevelopdatacommunicationserviceBegantoofferV
38、oIPservicesLeadingplayerinvoiceoverIPChinaNetcomGroupChinaRailcomChinaTelecombrokenupintoNorthandSouthwithCTNorthmergingwithChinaNetcomandJitongtobecomeChinaNetcomGroupChinaTelecomSouthcontinuesoperationasChinaTelecomOperatingCDMAlocalloopservicesinseveralcitiesChinaMobileunaffectedbysecondbreakup,s
39、urvivingproposaltomergeitwithJitong,givenconcernsaboutconsequencesofforcedmergersforpubliclylistedcompaniesChinaUnicomunaffectedbysecondbreakup,survivingproposaltomergeitwithRailcomWhileGreatWallCDMAassettransferhasyettobecompleted,UnicomwillbecomefirstmajoroperatorintheworldwithbothCDMAandGSMservic
40、es,withlaunchofitsownCDMAnetworkin2002Operatorbiddingfor3Glicense,withopennesstowardsadoptingChinas3Gstandard,TD-SCDMA14麦肯锡中国移动总体战略e文版Source: Literaturesearch;industryinterviewsBeforeAfter CT break-upMOST RECENT BREAK-UP OF CHINA TELECOM TO LEAD TO A LANDSCAPE OF 5 OPERATORS COMPETING ACROSS BOTH MO
41、BILE AND FIXEDLicensesLicensesAnnouncementonNovember26tomergeJitongwithChinaNetcomandChinaTelecomNorthernunitCompetitionwillincreaseasmergedtelecomgiantsobtainlicensesforcomprehensivetelecomoperations,includingFixed-linephoneMobilephoneInternet-relatedservicesOriginalplantomergeChinaMobilewithJitong
42、andChinaUnicomwithChinaRailcom,metwithstrongdissentfromthecapitalmarketswhosawthisasanaffronttoChinaMobileandChinaUnicomsgovernanceaspubliclyheldcompaniesMobileMobileFixedMobile(GSM-R)FixedFixedFixedFixedGROUPChina Telecom NorthChina Telecom SouthMobileFixedMobileFixedMobileFixedMobileFixedChina Rai
43、lcomChina RailcomMobileFixedHavelicense15麦肯锡中国移动总体战略e文版PROFILES OF CURRENT AND LIKELY FUTURE PLAYERSChina assetsMobile strategyCurrent partnershipsLicense prospects*Stilltobedecided96millionmobilesubscribers30millionmobilesubscribersServicescoveringover180citiesLargestnationaltelecomnetworkcovering2
44、,000citiesFirstoperatortointroduceinternetaccesscards,andannouncedon-lineshoppingcardtobelaunchedin2001Internetbackbonecovering17majorcitiesStartedIPphoneservicesinJanuary20002ndlargestnetworkinChina;coveringallmajorcities(500cities)Betechnologyleader,thuseagertoenter3GFocusonhigh-endcustomersTriali
45、ngGPRSwith7vendorsStronglysupportingWAPShiftingattitudesontechnology,nowfirstplayertocoverbothGSMandCDMAFocusingattentionondevelopingCDMAnetworksTrialingGPRSwith4vendorsCompeteonserviceofferingwithexistingoperators,leveraginggovernmentandsupplierexpertiseActivewithWLLandlocalmobilityGostraightto3Gif
46、possibleObtainmobilelicenseasquickaspossibleregardlessoftechnologystandardRolloutwirelessdataservicesevenifitmeanstakingGSM/GPRSfirstMayfocusinitiallyonGZ,BJ,SHLikelyintendsfollowing2-tierstructureObtain3Glicensetotargethigh-endusersUse2GPHStotargetvoicesubscribersVodafoneHPHutchisonKDDISKTelecomTel
47、straAT&TJapanTelecomBritishTelecomNewsCorporationGoldmanSachsSingTelNoneExistingExistingCurrent playersChina MobileChina UnicomLikely future playersChina TelecomChina NetcomChina Railcom* Governmentlikelytogrant2licenses;undecidedwhen,andwhattype;nonetobeawardedin2001Source: PiperJaffrey;MerrillLync
48、h;Literaturesearch16麦肯锡中国移动总体战略e文版OTHER PLAYERS UNLIKELY TO ATTAIN MOBILE LICENSESSource: GoldmanSachs;EIUPyramid;McKinseyanalysisCentury MobileJitongForeign JV EntrantsNew telcosWho they areBasis for entryObstaclesConsortiumof10enterpriseswhohavejoinedtogethertotrytosetupmobileenterpriseSetupin1994
49、todevelopdatacommunicationservicesPotentialJVsinvolvingforeigncompaniesNewplayersexpandingintotelecomSomegovernmentcontactsOriginallyconsideredtakeoverofGreatWallsassetsOwns70%ofVoIPmarketGovernmenthasindicateddesiretoseemultipleoperationswithmultipleserviceofferingsGovernmentmaybepressuredtoshowmar
50、ketprogressandWTObenefitsForeignoperatorsandentitieseagertoinvestDesiretoenterwirelessgivenopportunitiesandconvergenceoftechnologiesGreatWallassetsmovedtoChinaUnicomNocurrentdiscussionregardingmobileservicesobservedLowcapabilitytoutilizemobilespectrumifallocatedWTOagreementsdonotrequirethatnewteleco
51、mlicensesbeissuedtonewentrantsNationwidepresenceofforeigninvestmentnotpossibleforinitial3yearsunderWTOMIIwilllikelylimittheinfluenceofotherministriesontheirturf(e.g.,blockingSARFTentryintoInternet)17麦肯锡中国移动总体战略e文版EXISTING AND POTENTIAL MOBILE OPERATORS HOLD BROAD BUT DIFFERENT COMPETITIVE POSITIONIN
52、GS AND SERVICE OFFERINGSBasic services China MobileChina Unicom China TelecomChina Netcom MobilevoiceserviceMobiledataserviceIPMultimediaserviceMobilevoiceserviceMobiledataserviceIPMultimediaserviceLocalcallDLDIDDPagingIPMultimediaserviceLocalcallDLDIDDWebhostingNetworkelementleaseandsaleIPIDDWebhos
53、tingLeaseandsaleofbandwidthValue-added services FaxVoicemailCallerIDCallwaitingSMSVPN/VPDNIDCFaxVoicemailCallerIDCallwaitingSMSVPNFaxVoiceVASCallerIDVPNIDCISDN/DDNEDIISPE-mailDatacommunicationPublicmultimediaservicesSource: MII;Asiacom;Analystreport18麦肯锡中国移动总体战略e文版EACH EXISTING/POTENTIAL MOBILE OPER
54、ATOR HAS STRENGTHS AND WEAKNESSESSource: LiteratureResearch;McKinseyAnalysis;IDCChinaMobileChinaUnicomChinaNetcomChinaTelecomChinaRailcomStrengthsWeaknessesIncumbentoperatorservinghighervaluecustomersDominatesmarketwith74%ofsubscribersand84%ofrevenuesAlliedwithVodafonewhoseCEOsitsonboardAccesstoglob
55、alcapitalviaCMHKOfferscompletepackagetocorporatecustomersAbletounderpriceCMandattainmarketshareGovernmentandpolicysupporttopromotecompetitionNofrequencyconstraintduetoCDMAnetwork(13msubcapacity)AccesstoglobalcapitalviaUnicomHongKongStrongmanagementteamwithexecutiveshailingfromsuccessfulstartup(Asia-
56、info),consultingfirmsandbulgebracketinvestmentbanksStronggovernmentalconnectionswithJiangZeminssononboardRemainsdominantfixed-lineoperatorDominantindatacommunicationsandinInternetservice2ndlargestfixed-linenetworkFacing2Gspectrumshortageinmajorcities2002/2003Unicomhas10%priceadvantagebyregulationMan
57、agementandbusinessstructurenotyetcompletelysetupWeakerbrandandpublicpenetrationthanCMHKFacingcomplexityofdualnetworkmanagementInfrastructurespendhightobuildCDMAnetworkLacksfixed-networkreachHasnomobileoperatinglicenseLacksmobileexpertiseRegulatoryconcernsasMIIlawprohibitingJVswithSOEstargetsrelation
58、shipwithSARFT(oneofthefounders)HasnomobileoperatinglicenseLacksmobileexpertiseCarriesmonopolycultureandlacksbusiness-drivenaggressivenessBoundtofinanciallynonviableruralareaexpansionoffixed-linenetworkUncertaintiesinitsbreak-upplanHasnomobileoperatinglicenseLacksmobileexpertiseLacksscaleandsupportEx
59、isting/potential operator19麦肯锡中国移动总体战略e文版MOST OPERATORS HAVE EXISTING PARTNERSHIPS WITH FOREIGN PLAYERS* ChinaRailcomisinvolvedinnorelevantpartnershipsSource:LiteratureResearch;AnalystreportsChinaMobileChinaUnicomChinaTelecomChinaNetcomPartnerType of partnership VodafoneHPHutchisonTelecomKDDISKTelec
60、omTelstraAT&TJapanTelecomBritishTelecomNewsCorporation,GoldmanSachs,etc.SingTelEquantVodafoneowns2%equityshareinChinaMobile(HK)StrategicallianceagreementwithVodafonetobeCMHKslongtermpreferredpartnerinareasincludingR&Dtechnicalexpertise,standardandprotocoldevelopmentetc.WirelessdataR&DJVbetweenmajori
61、tyownedsubsidiaryAspireandHPHutchisonowns1.5%ofChinaUnicom(listed)JointdevelopmentoftechnologyforhighspeedmobilephoneKDDItosupplyCDMAOnemobilephonesStrategicAlliancetoaidChinaUnicomsCDMAOnenetworkdevelopmentand3GtransitionStrategicalliancetoaidUnicomdevelopCDMAnetworkAT&Towns25%ofShanghaiSymphonyTel
62、ecommunicationsMOUinfixedline,mobilephoneandfast-datatransmissionareasforclientcompaniesMOUsignedin1998tocooperateintechnologyandbusinessopportunitiesJointventureprovidingend-to-enddatacommunicationserviceforMNCssetupin1999Partnersbought12%ofChinaNetcomfor$324millioninprivateplacementStrategicallian
63、cetoprovidesafe,efficientdatatransmissionforSingaporecompanieswithsubsidiaries,partnersinChinaServiceagreementtoco-developVPNofferingsOperator*20麦肯锡中国移动总体战略e文版IN MOBILE TELECOM SERVICE MARKET, CHINA MOBILE WILL LIKELY REMAIN THE DOMINANT OPERATOR IN BOTH REVENUE 100%=1998199920002001E2002E2004EChina
64、UnicomChinaMobile2003E2005E363710Otheroperators000008.411.816.221.127.932.034.538.4US$Billions,percentCAGR 1998-2005EPercent6718N/ASource: McKinseyAnalysis21麦肯锡中国移动总体战略e文版AND SUBSCRIBER* SHARE1997ChinaUnicomChinaMobile3100%=5112543851451551761972181998199920002001E2002E2003E2004E2005EOtheroperator(s
65、)Millions,percent*02-05forecastarenetsubsafterinactiveandmulti-sim-cardreductionSource: DeutscheBank;JPMorgan;McKinseyanalysis22麦肯锡中国移动总体战略e文版*02-05forecastarenetsubsafterinactiveandmulti-sim-cardreduction*AcquiredbyCMHKfromparentinOct2000Source: JPMorgan;Industryinterviews;McKinseyanalysisPROPORTIO
66、N OF EACH OPERATORS SUBSCRIBERS* INCLUDED IN LISTED ENTITYMillions,percentChina Mobile23.537.866.3111.0108.4 112.9118.7126.6199819992000 2001E 2002E 2003E 2004E 2005E666168656666CMHK100%=Unicom1.55.218.744.047.055.263.567.81998199920002001E 2002E 2003E 2004E 2005E626365616162UnicomListed100%=8682CMH
67、K ProvincesBeijing*FujianGuangdongGuangxi*HainanHebei*HenanJiangsuLiaoning*Shandong*Shanghai*Tianjin*ZhejiangUnicom (HK) ProvincesAnhuiBeijingFujianGuangdongHebeiHubeiJiangsuLiaoningShandongShanghaiTianjinZhejiang4128Listedcompany23麦肯锡中国移动总体战略e文版CHURN IS ALREADY SIGNIFICANT WITH BOTH OPERATORS AND W
68、ILL CONTINUE TO INCREASE DRIVEN BY INCREASING COMPETITION WITH IMPACT GREATEST ON CHINA MOBILEPercentChinaMobileHKChinaUnicomCommentsChinaMobilesbroadernetworkcoverageleadsinitiallytofarlowerchurnratethanforChinaUnicomChinaUnicomsrapidlyexpandingnetworkandhigher-qualityCDMAconnectionwillincreaseCMHK
69、schurngoingforwardIntensifyingcompetitioncausesbothsetsofchurnratestoriseAsnetworksbecomesimilar,customersappreciatelowerChinaUnicompriceSource: Analystreport;Companyannualreport24麦肯锡中国移动总体战略e文版CommentsDecreasingtrendduetoIncreasedcompetitionandlowertariffsIncreasedmixoflow-valueprepaidusersDeepenin
70、gpenetrationwhichincreaseslow-valueusershipChinaMobilesARPUhigherduetoHigherpricesthanChinaUnicomGreaterconcentrationofhigh-endusersbecauseofbreadthofcoverageandmarketpresenceCHINA MOBILE ENJOYS GREATER ARPU, ALTHOUGH LISTED COMPANIES FOR BOTH OPERATORS GENERATE GREATER ARPU THAN UNLISTEDCMHKUnicom(
71、listed)CM(unlisted)Unicom(unlisted)US$/monthSource: DeutscheBank;McKinseyanalysis25麦肯锡中国移动总体战略e文版* 100%=75.9millionsubscribersin2001and111.9millionin2005* 100%=28.6millionsubscribersin2001and54.9millionin2005Source: GoldmanSachs;MorganStanley;Teamanalysis-6CHINA MOBILES ARPU EXCEEDS CHINA UNICOMS DE
72、SPITE A LARGER PROPORTION OF PREPAID CUSTOMERSBlended ARPUUS$/monthCMHKChinaUnicom(listed)20012005CAGRPercent-5Prepaid vs. postpaid ARPU comparisonUSD/monthCAGRPercent-5200120050CMHKChinaUnicom(listed)-1-4Prepaid subscribers as percentage of total subscribersPercentCAGRPercent19*20012005CMHKChinaUni
73、com(listed)43*WAWAChinaMobilesARPUexceedsChinaUnicomsdespitealargerproportionofprepaidcustomersduetoafarhigherpostpaidARPUChinaMobileshigherpostpaidARPUisduetoitshigh-endcustomerbaseandsuperiormarketingaswellasChinaUnicomslowertariffschargedPrepaidPostpaidBlended26麦肯锡中国移动总体战略e文版Share priceHK$SHARE P
74、RICES FOR BOTH OPERATORS HAVE DETERIORATED IN 2001 PRIMARILY DUE TO PRICING PRESSURESCMHKChina UnicomChinaMobileannouncesnewlowertariffpackagesSharepricetookahitonfearsthattariffcutsandspendingonanewCDMAnetworkwilleatintoearningsMIIannouncescancellationofregistrationfeeMarket capitalizationUS$billio
75、ns120.469.520.917.5Source: HongKongstockexchange;DataStream27麦肯锡中国移动总体战略e文版NONETHELESS, BOTH OPERATORS STILL ENJOY HEALTHY EBITDA AND RETURN ON ASSETS, DRIVEN BY LOWER COST BASES, ESPECIALLY COMPARED TO CHINA TELECOMUS$Billions,2000Player* RevenuePercent of revenue Percent of revenue CMHKChinaUnicom
76、(listed)ChinaTelecomEBITDAN/ANet profitROAPercent0.154.744.8N/A18.813.80.5* TotalChinaMobilerevenue14.3billion* TotalChinaUnicom(Listed+unlisted)mobilerevenueisUS$1.9billion;listedportioncontributes1.5billion(balancepagingandfixedline)* NetcomandRailcomfinancialsN/ASource: JPMorgan28麦肯锡中国移动总体战略e文版KE
77、Y MESSAGES3. Wireless data services are expected to grow quickly in China to a market of potentially over US$4 billion by 2005, used by 43% of all mobile users. Interest from consumer surveys have been high and operators and other players are actively building services in the market. While early hav
78、e failed to catch on, SMS has grown exponentially with up to 20 billion SMS messages estimated for 2001. The early adopters will be mobile professionals and modern youth, who will require services and devices tailored to their needs. 29麦肯锡中国移动总体战略e文版RESULTS OF A CHINESE WIRELESS SURVEY (2000) INDICA
79、TED STRONG INTEREST IN MOBILE DATA SERVICES* InternetusernumberissignificantlyhigherthanInternetsubscriptionnumber,becauseofthesharingInternetaccessamongusersSource: Mobileusersurvey,2000VeryinterestedInterestedNotinterestedNeutralVerydisinterestedKey sample characteristicsInterviewof100randomlychos
80、enrespondentsinShanghai,BeijingandGuangzhou,representingagoodcross-sectionofdifferenttypesofmobileusers68%ofrespondentsexpressinterestinreceivingdataservices20%ofrespondentsarefixedlineinternetusers*MedianInternetusageof30hours/monthMedianmobilebillofRMB300/month30麦肯锡中国移动总体战略e文版CONSUMERS HAVE GREATE
81、ST INTEREST IN EMAIL AND MOBILE VASSource:Mobileusersurvey,2000InterestedNeutralNotinterestedE-mailInter-netbrows-ingNews/sports/Enter-tain-mentStockquotesCitymapFlight/trainsche-duleandreser-vationYellowpagesPercentageofrespondentsInterest in content delivered over mobileForcontent,Chineseconsumers
82、showgreatestinterestinemail,flight/trainschedulingandreservation,andnewsFortransaction,mobileVASandm-bankingarethemostpopularm-commerceapplicationsforChineseconsumersMobileVAS(billing,location,etc.)MobilebankingInter-activegamesPercentageofrespondentsInterest in transactions delivered over mobile31麦
83、肯锡中国移动总体战略e文版CHINAS WIRELESS DATA SERVICES EXPECTED TO GROW QUICKLYSource: IDCreport;Literatureresearch;McKinseyanalysisESTIMATEVoiceonlyDataandvoiceNumber of mobile subscribersMillions,Percent4387145155-161176-207197-253218-30005E04E03E02E01E009943%26%15%9%4%Revenue from wireless dataUS$billions05E
84、04E03E02E01E2.61713.33.02.7Wireless data service ARPU/month/actual user US$LowcaseHighcase5.42.51.10.40.1155CAGR32麦肯锡中国移动总体战略e文版HANDSET AND PDA MANUFACTURERS WILL FURTHER DRIVE MOBILE DATASource:IDC;CCID;SINO-MR;Gartner;Interviews;CahnersIn-StatGroup;literaturesearch;TeamanalysisNumber of handset un
85、its soldMillions20002001E2002E2003E2004E2005E23%30%45%63%86%90%45.054.946.657.565.644.6Number of PDA units soldMillions20002001E2002E2003E2004E2005E2%2%11%31%56%82%6.88.311.917.325.05.6Number of mobile device units soldMillions20002001E2002E2003E2004E2005E23%30%44%58%74%69%45.255.850.367.286.144.7CA
86、GRCAGRNon-internetenabledInternetenabledOtherWireless24%14%7%2%0.3%0.3%InternetenabledhandsetWirelessPDA14%42%-28%42%8%-28%CAGR193%35%-4%183%Non-dataenabled20012005Comparison of unit shipment in China vs. USMillionsChinaUS33麦肯锡中国移动总体战略e文版NUMEROUS PLAYERS INVOLVED IN THE PRC WIRELESS DATA MARKETSourc
87、e: LiteraturesearchLeadingPRCportalslaunchedSupportedbyequipmentvendorsandlocaloperatorsPRC wire-lineportalsPlayersEstimated numberSummaryKey Player (examples)ActivelylaunchingWAP/GPRStrialsinHongKongAnnouncedinterestinPRCAcquiringstartupstostrengthencapabilityDevelopingrelationshipswithPRCOperators
88、International m-portals/HK operatorsSmarTone/BTSoneraSKTelecomHutchisonNewWorldlaunchedM-commerceenableremergingandformingpartnershipwithcontentsuppliersor/andPRCoperatorsPRC wire-less portal platformsMonternet(ChinaMobile)Uni-info(ChinaUnicom)LaunchedwithsupportofpartnersGPRStrialsinprogressandsche
89、duledforlaunchinOctober,2001ChinaUnicomlaunchedCDMA(64kbps)and1XRITT(140kbps)inJan2002ChinaMobileinitiated3GtrialsinNovember,2001PRC mobileoperators10-205-102-52ChinaMobileChinaUnicomSCSEquipment Vendors34麦肯锡中国移动总体战略e文版OPERATORS ARE ESPECIALLY ACTIVE IN PURSUING WIRELESS DATASource: Literaturesearch
90、;Analystreports;TeamanalysisOperators are actively pursuing wireless data servicesCompetitive pressureChinaMobilesdominationofthemarketisthreatenedbyUnicomsaggressivelowpriceandvalueaddedservicesofferings2newoperatorsmaybegrantedlicensestoenterwirelessmarketafter2002Theleverofcompetitioninmobilecomm
91、unicationmarketwillbeVASHighvaluemobileusersexpresstheirwillingnesstoswitchoperatorsinordertoaccesswirelessdataservicesChinaMobileoffersinallcities,andhasgatewaysin4citiesUnicomalsolaunchedin6majorcitiesBothChinaMobileandChinaUnicomareactivelyformingpartnershipswithmobileInternetapplicationproviders
92、andICPstoboostuptheirPotentialnewoperators,ChinaTelecomandChinaNetcomalsoexpressstrongdesirestofocusonwirelessdataservicesasatooltogaincustomerbaseOperatorshaveintroducedownwirelessportalsMonternetbyChinaMobileUni-infobyChinaUnicom35麦肯锡中国移动总体战略e文版 HAVE FAILED TO TAKE OFF IN CHINASource: Literaturese
93、arch;GartnerGroup failed to take offContentMainlyinformationalservicessuchasnews,weatherTextcontentSlow take off450,000subscribersin2000Lessthan300,000usersin2000Major roadblocks to successSlowspeed(download,processing)LimitedcompellingInitialpremiumpricingandlimitedavailabilityofhandsetsDifficultin
94、putUnstableconnectionLimitedcoverageRelativehighmobileInternetchargeSmallscreenwithunclearChinesecharacterdisplaysHardtonavigateLackofsecurity36麦肯锡中国移动总体战略e文版.BUT SMS IS TAKING CHINA BY STORMSource: Literaturesearch;TeamanalysisLesson learnedMobiledataservicesneedtobesimple,cheap,reliable,andfun20mi
95、llionactiveuserscurrently19.9billionmessagessentin20012%ofCMCCrevenuein2000wasfromSMSAveragedailySMSvolumeinShanghaiis3millioninJuly2001ChinaMobileandChinaUnicomlinkingtheirSMSservicesSMSenabledPDAslaunchedKey success factorsFunContentGetandsendtextmessagesPlaysimplegamesRealtimecontestDownloadringt
96、onesDownloadscreensaversExchangejokesSMS is enjoying a fast take offLowusagecost0.10RMBpermessageReliableserviceProventechnologyImprovedandeasierinputNationwidecoveragebyCMCCandnowbyUnicomtooNonewhandsetneeded37麦肯锡中国移动总体战略e文版EARLY TAKE UP OF MOBILE DATA IS ENCOURAGING AS CONSUMERS ARE DEMONSTRATING
97、WILLINGNESS TO PAYData service offeringsData service performanceBy operatorsChinaMobileProduct/serviceSMS,includingpersonalizedinformation,flight/trainscheduleinquiry,stockquoteandonlinechattingWAP,includingemail,gamingandPIMPricingRMB0.1perordinarymessageforsendingwithfreeforreception;RMB0.2-2charg
98、edbyserviceproviderandCMforeachspecializedSMS:RMB0.15perminuteforfirst200minutes,freeforanother300minutesandRMB0.15perminuteforanyextraChinaUnicomProduct/serviceSMS,includingpersonalizedinformation,PIM,entertainmentandstockquoteOnlinepagerPricingRMB0.1perordinarymessageforsendingwithfreeforreception
99、;samechargeforspecializedSMSasCMBy ICPSMobileQQ()Product/serviceUnifiedinstantmessenger(mobileQQ)enablingmobiletoPCcommunicationPricing5RMBmonthlyfee+0.1RMBperoutgoingmessagewithfreeincomingmessagesviaCMmobileNomonthlyfee,but0.1RMBperoutgoingmessageand0.05RMBperincomingmessageviaCUmobileChina Mobile
100、2001China Unicom 2001NumberofshortmessageSMSPenetrationinuserbase*Percentoftotalrevenue*15.9billion29%4billionN/A1.2%N/ASource:Semi-annualreports;Pressrelease;Website;Interviews;Teamanalysis*IncludebothwirelessdataandVAS*onlyCMQQsubsincluded*CMHKNumberofshortmessageSMSPenetrationinuserbasePercentoft
101、otalrevenue*QQ1sthalf2001TotalsubsMobileQQsubs20million0.9million*38麦肯锡中国移动总体战略e文版“VIRTUAL PETS” IS ONE EXAMPLE OF SMS APPLICATION IN CHINASource: Linktonewebsite;literaturesearchLinktones“VirtualPets”SMSgameallowssubscriberstoeducatetheiranimalofchoice-rangingfromtigerstopigstothepopularkoala-sendi
102、tondatesandputittobed,ratherliketheJapaneseelectronicpet,TamagotchiThecostisveryaffordableatRMB0.10perSMSMoreBackMoreBack-2000-Lunar狼吞虎咽的把饭吃光了。谢谢主人，再来点吧。米增加5；金币减少10；经验增加1。Lunarhaseatenthefoodlikeatiger.“Thankyou,master.Somemore,please.”Use10goldcoinstobuy5riceunits,addoneexperiencepoint.MoreBack-200
103、0-申请侍应生职位成功，由于工作努力，获得30个金币！经验增加3Yourpetwassuccessfullyhiredasawaiter.Becauseofhishardwork,hehasearned30goldcoins,andthreeexperiencepoints.MoreBack-2000-你的宠物魅力十足，cici想跟你做朋友（跟对方说话请输入P空格cici空格再写内容），30字以内。Someonehasacrushonyourpet!(Totalktothepignamedcici,enterP_cici_andanote)Donotexceed30characters.Chi
104、na, like Japan, combines a love of gadgets with a “cult of the cute”39麦肯锡中国移动总体战略e文版QQ HAS BEEN VERY SUCCESSFUL IN GAINING SUBSCRIBER BASE WITH UNIFIED MESSENGINGMobileQQinasemi-instantmessagingtypeofmobiledataapplication,whichoriginatedfromthepopularinternetbasedinstantchattingandmessagingapplicati
105、on,I.e.,OICQ,wheresubscriberscanchatwitheachotherandbenotifiediftheirfriendsareonlineatrealtimeBasic functions:SendingSMSbetweenmobilephoneandQQUsingmobilephonetocheckinformationstoredonQQUsingmobilephonetocheckiffriendsareon-lineService fee:ServicesarefreeforuserswhoonlyuseOICQontheInternetSubscrib
106、ersarechargedforusingmobileQQviamobilephoneFeestructureforChinamobilesubscribersis:5RMBmonthlyfee+0.1RMBperoutgoingmessage,incomingmessageisfreeofchange*FeestructureforUnicomsubscribersis:nomonthlyfee,but0.1RMBperoutgoingmessageand0.05RMBperincomingmessageTenCentclaimstohave20millionsubscribersintot
107、alInfact,only0.9millionofwhichareactualmobileQQusersfromwhomChinaMobilecollectsmonthlysubscriptionfeeforTenCent* Whilesubscribersdontneedtopayforincomingmessages,TenCentisrequiredtopay0.05RMBforeachincomingmessagetoChinaMobileSource: TenCent,teamanalysis40麦肯锡中国移动总体战略e文版FOUR KEY MOBILE DATA USER SEGM
108、ENTS CAN BE IDENTIFIEDSource:Surveyresearchon18citiesand2500mobileusers;TeamanalysisMobile professionalsModern youthDescription Segment Conservative mainstreamIndifferent laggard MostlymanagersorentrepreneursUsemobilephonemainlyforbusinessTravelalotandhavesignificantroamingneedsCareaboutvoicequality
109、andnetworkcoverageHighpersonalincomeHighmobiledatapotential:already25%ofthemuseSMSfrequentlyMostlyunder30yearsoldUsemobilephonemainlyforpersonalcommunicationconvenienceInterestedinnewtechnologiesandwillingtotryoutnewthingsManyunmarriedpeople,withhigheducationallevelHighmobiledatapotential:already47%
110、useSMSregularlyCarethemostofmobilecommunicationcostRelativelylowerincomeOlderthanaverageandlesseducatedLotsofpre-paidusersLowestARPUVerylowSMSusagecurrently:13%LittlepotentialformobiledataMostlymarried,over30yearsoldandundercollegeeducationDontcaremuchabouttechnologyandtrendMainlyusevoiceservicesfor
111、localcallsVerylowSMSusagecurrently:2,500usersforChinaMobileandroughestimatesforChinaUnicomSegmentShare of total revenuesPercentoftotalrevenueSMS usePercentPC internet usePercentMobile professionalsARPU USDShare of total subscribersPercentModern youthConservative mainstreamIndifferent laggard4713ESTI
112、MATE42麦肯锡中国移动总体战略e文版BOTH TARGET SEGMENTS WILL REQUIRE DEVICES WITH FEATURES CUSTOMIZED TO THEIR NEEDSSource: TeamanalysisMobile professionalCustomer segmentMostlymanagersorentrepreneursUsemobilephonemainlyforbusinessTravelalotandhavesignificantroamingneedsCareaboutvoicequalityandnetworkcoverageHighp
113、ersonalincomeHighmobiledatapotential:already25%ofthemuseSMSfrequentlyMostlyunder30yearsoldUsemobilephonemainlyforpersonalcommunicationconvenienceInterestedinnewtechnologiesandwillingtotryoutnewthingsManyunmarriedpeople,withhigheducationallevelHighmobiledatapotential:already47%useUMSregularlyDescript
114、ionMessaging/emailonthegoInformation(e.g.,stockquotes,weather,news,localguide)PersonalinformationmanagementMobilecommerceMobilestocktradingMobileofficeMessaging/emailInformation(localnews,weather,event)Games/entertainmentKey user needsAlwaysup-to-dateunifiedmessaging(hotmail,voicemail,2-waySMS,IM)Cu
115、stomizedinformationAlwaysup-to-datePIM,notifications,alerts,outlooksync.CommerceandstocktradingcapabilitiesSecurebrowserofcorporateintranetandinternetAlwaysup-to-dateunifiedmessaging(hotmail,voicemail,IM,2-waysSMS)CustomizedinformationNetworkgamingDownloads(rigtone,basicimage,musicandvideoclips)thro
116、ughPCPIM,PIP,notification,alerts,outlooksyncKey featuresModern youth43麦肯锡中国移动总体战略e文版MESSAGING, INFORMATION AND ENTERTAINMENT WILL BE KEY OFFERINGS FOR MOBILE PROFESSIONALS AND MODERN YOUTH IN THE NEAR TERM%ofpeopleinterestedMobile professionals, N370Messaging/emailInformation(stockquotes,news,weathe
117、r,restaurants)M-shoppingM-stocktradingM-advertisingEntertainment(ringtone&screendownload)Source: Surveyresearch;TeamanalysisModern youth, N50017.119.821.022.161.290.019.535.123.725.768.786.344麦肯锡中国移动总体战略e文版KEY MESSAGES4. Regulatory changes loom, particularly with the accession of China to the WTO. W
118、hile foreigners will be unlikely to set up MVNOs, WTO will allow greater participation of foreigners in basic and value added services, although geographic limitations will exist through 2004 and Chinese players will be required to own at least 50% of telecom service ventures (51% for basic services
119、). Regulatory risks remain, with no means to appeal regulator decisions, unclear interpretation of regulation including WTO commitments, and the governments track record of intransparent and unpredictable decision making. (See separate regulatory PD for details)*Mobilevirtualnetworkoperator45麦肯锡中国移动
120、总体战略e文版REGULATORY AND POLITICAL CHANGES AND IMPLICATIONS FOR FOREIGNERS PLAYING IN telecom LOOM20012002200320042005WTOAccessionChangeinpoliticalleadershipAnnouncementofsuccessionTransitionofpowerinseniorleadershipImplicationsfor foreigners+Limitationsonpartnershipstructuresliftedgradually+Operatorsw
121、illbemoredealreadyoncelawsareofficialForeigninvestmentswillstillbeinitiallyrestrictedgeographicallyRiskforshiftinregulatorydirectionandpolicymakingChangemaymakerelationshipinvestmentsobsoleteMaximumfore-seeableopeningofVASinChinatelecommarketUpto30%withinoperatingDecisionpointKey events3cities(BJ,SH
122、,GZ)17citiesnationwidePromulgationofTelecommunicationsLawMobilizationoftelecommunicationscommissionZhuRongjitomobilizecommissionandleadsectorreformDraftingofforeigninvestmentlawintelecommunicationsUpto50%withinoperationForeignandgeographicalrestrictionsDecember,2001Mustbecompletedbefore/attimeofWTOa
123、ccessionNotlikelytoexpandbeyondWTOconcessionsWuJichuanpromisedadraftbyJanuary1st.However,comprehensivelawnotlikelytobedraftedinthattimeaccordingtoindustryinsiders.LawnotlikelytoexpandbeyondWTOconcessionsRelevantlegislationDraftingofadevelopmentblueprintforthetelecommunicationindustrytomanageoperatio
124、noffixed-line,mobileandInternetbusinessMobilevoiceanddataservicesValue-AddedServicesUpto25%withinoperatingUpto35%withinoperating3cities(BJ,SH,GZ)17citiesNation-wideUpto49%withinoperatingUpto49%Maximumfore-seeableopeningofbasicservicesinChinatelecommarketSource: Legalandindustryinterviews;teamanalysi
125、s46麦肯锡中国移动总体战略e文版MVNOs ARE NOT LIKELY TO BE VIABLE IN THE FORSEEABLE FUTURELegal statusCurrent activityFuture prospectsMVNOoperationwouldrequirealicenseLicenseswouldbesubjecttogovernmentapprovalRegulationsgoverningbasicservicesandvalue-addedserviceswouldapplytoMVNOsincludingrestrictionsonforeignpart
126、icipationCurrentlyahottopicdiscussedbyindustryfollowersasameanstohelptransformserviceorientationofChinastelecomlandscapeMVNOsorservicesrunningonequipmentinfrastructureoflicensedoperatorsdoexist,includinginfixedline;however,theseareillegalandthegovernmentiscurrentlycrackingdownontheseinfractionsinane
127、ffortreminiscentofcrackdownofChinese-Chinese-Foreigncompanies(CCFs)MVNOactivityisreportedlypresentinLiaoningandSouthernprovinces;thesearealsonotrecognizedlegallybythegovernmentandhavebeenretainedbydisgruntledinvestorsofthePLAsGreatWallCDMAnetworkandwilllikelydisappearafterassettransfertoUnicomiscomp
128、letedChinesegovernmentisdiscussingMVNOconceptasameanstoavoidcapacityoverbuild,particularlywithnewlicenseesExistingoperatorsunlikelytoconsiderMVNOs,particularlyinkeyandattractiveregionsgivenspectrumshortagesandnodesiretoincreasecompetitionMVNOswouldstillrequirealicensefromthegovernment,willbelimitedg
129、eographicallythrough2004,andevenbythen,require50%ormoreChineseownershipMVNOs are not likely to be introduced in the foreseeable futureSource: Legalinterviews;IndustryinterviewsSource: Legalandindustryinterviews47麦肯锡中国移动总体战略e文版Foreignoperatorscanobtainupto30%ownershipinBeijing,Shanghai,GuangzhouForei
130、gnoperatorscanobtainupto49%ownershipin17citiesForeignoperatorscanobtainupto50%ownershipnationwideVALUE ADDED SERVICES WILL BE LIBERATED UNDER WTO QUICKER THAN BASIC TELECOM SERVICES BUT LIMITATIONS WILL REMAIN* WTOentrypotentiallyeffectiveJanuary2002withlikelyNovember2001ratificationSource: Literatu
131、research;WTOWorkingTeamReportNovember13,2001Mobile voice anddata servicesUponentry(2002)*Foreigninvestorscanobtainupto25%ownershipBeijing,Shanghai,GuangzhouAfter3years(2005)After1year(2003)Telecom VAS(mobile and wireline) After2years(2004)Foreigninvestorscanobtainupto35%ownershipin17citiesForeigninv
132、estorscanobtainupto49%ownershipin17citiesForeignerswillstillbeprohibitedfrominvestingoroperatinginfiber-opticnetworkLicenseavailabilitywillbestrictlylimitedevenafterWTOaccessionandsubjecttoChinesegovernmentapprovalForeigninvestmentislimitedtonomorethan50%evenpostWTOAfter5years(2007)Foreigninvestorsc
133、anobtainupto49%ownershipnationwideUnchanged(foreignparticipationnotallowed)Foreigninvestorscanobtainupto25%ownershipinBeijing,Shanghai,GuangzhouForeigninvestorscanobtainupto35%ownershipin17citiesDomestic services (wireline) Foreigninvestorscanobtainupto49%ownershipnationwideAfter6years(2008)Period B
134、asicTelecommunicationservices48麦肯锡中国移动总体战略e文版VALUE ADDED SERVICES (VAS) ARE DEFINED AS PROVISION OF SERVICES OVER SOMEONE ELSES NETWORK Basic Telecommunication servicesTelecommunications VASDefinitionServices includedPagingservicesMobilevoiceanddataservices:Analog/digital/cellularservicesPersonalcom
135、municationservicesDomesticServicesVoiceservicesPacket-switcheddatatransmissionservicesCircuit-switcheddatatransmissionservicesFacsimileservicesDomesticprivateleasedcircuitservicesInternationalServicesVoiceservicesPacket-switcheddatatransmissionservicesCircuit-switcheddatatransmissionservicesFacsimil
136、eservicesInternationalclosedusergroupvoiceanddataservices(useofprivateleasedcircuitserviceispermitted)ProvisionofservicesoverothersnetworkSource: WTOWorkingTeamReportNovember13,2001OwnershipofnetworksFixed,domestic,longdistanceandlocaltelephoneElectronicmailVoicemailOn-lineinformationanddatabaseretr
137、ievalElectronicdatainterchangeEnhanced/Value-addedfacsimileservices(includingstoreandforward,storeandretrieve)CodeandprotocolconversionOn-lineinformationand/ordataprocessing(includingtransactionprocessing)BACKUP49麦肯锡中国移动总体战略e文版APPENDIX- PLAYERS PROFILEChina Mobile and China Unicom are duopoly in Chi
138、nas mobile telecom service market. China telecom, China Netcom, China Railcom, and Jitong(newly merged by China Netcom) are potential players of this market.50麦肯锡中国移动总体战略e文版PLAYER PROFILE CHINA MOBILEStrategic DirectionSubscriber BaseFinancial HighlightsMarket CapService OfferingMain PartnershipStre
139、ngths & WeaknessesOwnership StructureImpact of China Telecom Breakup*Revenue BreakdownBasic InformationLargestmobileoperatorinChinaOwnandoperatemobilenetworksacrossChinasinceearly1990sEstablished:1999Headoffice:BeijingCEO:ZhangLigui#ofemployee:38,343(CMHK)StrategyMaintainmarketshare&keephigh-endcust
140、omersinmobilebusinessEnterInternetbusinessmobileandfixedBeonleadingedgeoftechnology30%of2005revenuefromnon-voiceservicesNew initiativesLaunched“Monternet”toactivelypreparefor3GCMHKwillacquiremobilenetworkintherest18provincesfromCMCCearlynextyear(CMHK)US$BillionRevenueEBITDAProfitROE11.7*8.56.44.72.2
141、0.630%14%20001999Stockprice:HK$24.10MarketCap:HK$440bn(Oct.30,2001)UsagefeesMonthlyfeesConnectionfeesOtherChinaMobileMinistryofFinance100%75%25%100%UnlistedProvincialnetworkCMHK(listed)Publicshareholder* IncludesVodafone(2.0%)*TotalChinaMobilerevenueisUS$14.3billionStrengthLeaderinChinasmobilemarket
142、Extensivecoverage&comprehensivenetworkStrongstrategicpartnerlikeVodafoneStrongbrandQuickertomarketnewvalue-addedserviceOwnsitsownR&DarmWeaknessUnderconstantthreatduetoUnicomslowpricepolicyARPUisthreatenedbytheincreaseinprepaidsubscriberSource: Literaturesearch;industryinterviews;IDC;Teamanalysis100%
143、Vodafonehas2%stakeinCMHKSubscriberMillionARPUUS$/m199920003867199920003022MobilevoiceserviceMobiledataserviceNoimpactOriginalproposaltomergewithJitongrejectedbasedonconflictwithcorporategovernanceofpubliclyheldfirm51麦肯锡中国移动总体战略e文版PLAYER PROFILE CHINA UNICOMStrategic DirectionSubscriber BaseFinancial
144、 Highlights*Market CapService OfferingMain PartnershipStrengths & WeaknessesOwnership StructureImpact of China Telecom BreakupRevenue BreakdownBasic InformationThe1stoperatorintheworldoutsideUStooperatelargescaleCDMA&GSMnetworksOwnandoperate2ndlargestmobilenetworkacrossChinasince1996Established:1994
145、Headoffice:BeijingCEO:YangXianZhu#ofemployee:35,400(listedcompany)StrategyBettingonCDMAtowinhighvaluesubscribersfromChinaMobile30%of2005revenuefromnon-voiceservicesIncreasenetworkcoverageandqualityinfixed-lineFocusfixed-linebusinessoncorporateusersNew initiativesInvestUSD18mmtobuildupethernetfiberac
146、ross9provincesandinvestUSD30bninnext5yearsinitsvoiceanddatabusinessUS$BillionRevenueEBITDAProfitROE2.92.11.30.70.40.16%7.6%20001999Stockprice:HK$7.35MarketCap:HK$91bn(Oct.31,2001)CellularserviceFixedline&dataPagingservice*includingMII,MOR&MOEP*1.5%heldbyHutchison*AllthedataareofCU(listed)StrengthDat
147、aspeedadvantageoverChinamobilewithCDMAnetworkNospectrumshortageonCDMAFirstmoverinbuildinghigh-capacitybackbonewithnationalreachWeaknessNetworkuseshybridATM/IP-basedtechnology,whichismoreexpensivetooperatecomparedtoapureIPnetworkMinistryofFinance77%23%Unlistednetwork&CDMAnationwideCU(Parent)ChinaUnic
148、om(listed)PublicSharehol-ders*79%13minorityshareholders*21%100%Source: Literaturesearch;industryinterviews;TeamanalysisHutchisonhas1.5%stakeinChinaUnicomLtd.(listed)SubscriberMillionARPUUS$/m19992000519199920001914Fixed-linetelecomserviceMobilevoiceanddataservice(GSM&CDMA)Internet-relatedservicePage
149、rNoimpactOriginalproposaltomergewithChinaRailcomrejectedbasedonconflictwithcorporategovernanceofpubliclyheldfirm52麦肯锡中国移动总体战略e文版POTENTIAL PLAYER PROFILE CHINA TELECOMStrategic DirectionSubscriber BaseFinancial HighlightsMarket CapService OfferingMain PartnershipStrengths & WeaknessesOwnership Struct
150、ureImpact of China Telecom BreakupRevenue BreakdownBasic InformationIncumbentfixed-lineproviderinChinaOwnandoperatefixed-linenetworkscoveringacrossChina,anditsfiberlinesis1.2millionkm,covering75%+ofChinacities&countiesEstablished:1994Headoffice:BeijingCEO:ZhouDeqing#ofstaff:533,000StrategyStrengthen
151、fixed-linestatus,doublingitsfibernetworkoverthenext5yearsSupplementfixed-linebusinesswithfast-growingmobilebusinessNew initiativesIPOin2002or2003Facingbreakupto2companiesUS$BillionRevenueProfitROA19.818.60.11N/A0.17%N/A20001999LongdistanceserviceData/internetLocalvoiceStrengthComprehensivenationwide
152、networkwhichdominateslast-mileaccesstocustomersExtensivecustomerrelationshipsgivenitsstatusastheincumbentWeaknessLikelytobesaddlewithnationalserviceobligation,abigissuegiventhewideincomedisparitiesinChinaSource: Literaturesearch;industryinterviews;TeamanalysisLocalAcrossISPChinaTelecomMinistryofFina
153、nce100%100%100%FixedDatacom100%AT&Tinvested25%inShanghaiSymphonyTelecomOthercooperationswithJ-phoneandBritishTelecomFixed-line19992000109144LocalandlongdistancevoiceserviceData/InternetISP20002001E4.17.4InternetNOT LISTEDSpiltintotwocompaniesTworegionalmonopoliesbecreatedoutofonenationalincumbentNor
154、thernUnitwillmergewithCNCandJitongBothunitswillbereleasedfrompublicobligationBothunitslikelytoreceivemobilelicenses53麦肯锡中国移动总体战略e文版POTENTIAL PLAYER PROFILE CHINA NETCOMStrategic DirectionStrategic DirectionFinancial HighlightsMarket CapService OfferingMain PartnershipStrengths & WeaknessesOwnership
155、StructureImpact of China Telecom Breakup*Basic InformationSource: Literaturesearch;industryinterviews;Teamanalysis;JPMorganRevenue BreakdownOwns9,376km40GBtrunknetworkconnecting17majorcitiesEstablished:1999Headoffice:BeijingCEO:EdwardTian#ofEmployees:2,674Raised$325millionfor12%stakethroughprivatepl
156、acementin2001IdentityofJVpartnersremainsunclearStrengthHighqualitymanagementHighcapacitybackbonebasedonIPtechnologyStronglypositionedoninternationalbandwidththroughalliancewithC2CandpotentialinternationallinkthroughitsHongKonggatewayWeaknessInadequatelast-mileaccesstocustomerscurrentlyStrategyFocuso
157、nprovidinghighquality,low-costinfrastructure&valueaddedservices&solutionsTargetcommunication-intensivecorporateandhigh-endresidentialcustomersCompetethroughdifferentiation&distinctivevaluepropositionBuildastrongbrandEstablishstrategicpartnershipwithworld-classtech/bizleadersVoIPcard&CorporateDataSer
158、vicesBackbone&bandwidthwholesaleVPN,highspeedbandwidth,internationalintegrateddataservicesRevenue2000US$million65ChineseAcademyofScienceSARFT15%40%100%SHGovtCNCMinistryofRailwayPrivateinvestors15%15%15%NOT LISTEDTurnedprofitinSept.,2001LeaseBandwidthDataVoiceMergewithChinaTelecomNorthernUnitandJiton
159、gObtainvaluablefixed-lineinfrastructureandbusinessGetaccesstolastmiletoboostexistingbackbonenetworksandbusinessNew initiativesPrivateequityreplacementinFeb2001CorporatedataservicelaunchedStrongtake-upinNetcomsIDCSignedagreementwithSingTelthusbecomelessreliantonCTininternationalbandwidth54麦肯锡中国移动总体战略
160、e文版POTENTIAL PLAYER PROFILE CHINA RAILCOMStrategic DirectionSubscriber BaseFinancial HighlightsMarket CapService OfferingMain PartnershipStrengths & WeaknessesOwnership StructureImpact of China Telecom BreakupRevenue BreakdownBasic InformationOwn2ndlargestfixed-linenetwork(120,000+km)inChinacovering
161、500+citiesInternetcovers36cities;pagingnetwork1300+cities;IP16citiesFibernetworkis42,000kminlengthand10,000kmofitsbackbonehasbeenupdatedwithDWDMEstablished:Dec.,2000Headoffice:BeijingCEO:CuiQing#ofemployee:65,000StrategyStrengthentheservicetorailwaytransportationExplorepublicmarketEnhanceservicequal
162、ityFocusonHRandTechnologyNew initiativesInvest$240mninbroadbandnetworkconstructionInvest$384mninfixed-linenetworkconstructionEntersatellitecommunicationbusinessStrengthExistingnationwidenetwork10-20%priceadvantageWeaknessNetworkareallconstructedalongrailway,restrictingdevelopmentofservicetopublicNet
163、workneedtobeupgradetomeetthemassivecommunicationdemandofpublicFinancingchannelneedtobeexploredLackoftalentSource: Literaturesearch;industryinterviews;TeamanalysisAcquired20%shareofShinStaellitePCL(Thailand)withcashandstockexchange49%100%CRCMinistryofRailway15chinarailwaybranches51%NOT LISTEDFixedlin
164、evoiceservicePagingIP,DLDBackboneleasingRevenueAssetRegisteredCapital2000US$billion0.121.61.3Fixed-linePager2000million1.01.4N.A.NoimpactOriginalproposaltomergewithJitongrejectedbasedonconflictwithcorporategovernanceofpubliclyheldfirmCandidateformobilelicense(likelyTD-SCDMA)55麦肯锡中国移动总体战略e文版POTENTIAL
165、 PLAYER PROFILE JITONGStrategic DirectionSubscriber BaseFinancial HighlightsMarket CapService OfferingMain PartnershipStrengths & WeaknessesOwnership StructureImpact of China Telecom BreakupRevenue BreakdownBasic InformationStrategyLeadingcomprehensivetelecommunicationcompanyMeetcustomersdemandswith
166、tailoredservicesNew initiativesIPO2ndtimepostponedSignedagreementwithNortelandDigitalChinatobuildself-ownedbackboneStrengthAmarketleaderinVoIPNationwidenetworkandvarioustechnologies,e.g.satellite&SDHOwncustomerloyaltyStronginsalesgivenitssmallerscaleofoperationWeaknessFinanciallyweakforfurtherexpans
167、ionandinfrastructureinvestmentManagementstyleisstronglyentrenchedwithSOEmentalityQualitypersonnelleavingtojoinothertelecomco.HeavilydependantonVoIPrevenuesSource: Literaturesearch;industryinterviews;TeamanalysisiPassNortel,DigitalChinaNOT LISTEDShanghaiHuaHongIRICO45%0.14%SDICElectronicsJiTong5%Othe
168、rSOEsMII40%10%Internetconnectivity-dialuppermanent(viafiber,microwave,&satellite)VoIPVAS&VPNIDC199920000.31.1SubscribermnRevenue2000US$million60IPinfrastructureandvalue-addedserviceproviderLeadingISP&VoIPplayerinChinawithtelecomservicemarketshareof10%Establishedin1994ISPlicensedin1995IPphonelicensed
169、in2000Licensedin1998tooperateChinaGBN,ChinasnationalpubliccomputernetworkCoverage:200cities#ofemployee:2000MergingintoChinaNetcominApril2002ISPVoIP&others43%57%TobemergedwithChinaNetcomandtheNorthernUnitofChinaTelecom56麦肯锡中国移动总体战略e文版APPENDIX- 3G TECHNOLOGY STANDARDS CHOICESMobile technology in China
170、 is advanced and cutting edge. Operators are launching packet switch networks in GPRS and CDMA 1XRTT, and plan to launch 3G by 2003. The country will likely three technologiesW-CDMA, TD-SCDMA and CDMA2000in some form or another. China has actively been developing TD-SCDMA, which has significant bene
171、fits over other alternatives, as an ITU approved 3G standard. 57麦肯锡中国移动总体战略e文版CURRENT PUBLIC MOBILE SERVICE SPECTRUM RESOURCE ALLOCATION IN CHINA COVERS BOTH GSM AND CDMA825835870880885890909915930 935954 960ETSIGSMspectrumUpDownUpDownUnicomCDMA10mhzCMCCAnalogreallocation5mhzCMCCGSM19mhzUnicomGSM6mh
172、z1710172017451755178518051815184018501880ETSIGSMspectrumUpUpCMCCGSM19mhzDownDownUnicomGSM10mhzSource: Operatorinterviews58麦肯锡中国移动总体战略e文版CHINESE OPERATORS MOVING AGGRESSIVELY TO ROLL OUT PACKET NETWORKSKey eventsTransferofnonCMHKoperatorstoCMHKLaunchofGPRS3GtrialsLaunchof3GLaunchofGPRSCDMAlaunchImpli
173、cation by periodProjecteddateProjectedtimingrangeSource:Interviews;literaturesearchNow2002200320042005ExistingoperatorspreparingforwirelessdataCrucialtimeperiodfor3Gdecisionandpositioningwithnewoperators3GnetworksandnewmobileoperatorsemergingGrowthandmaturationof3GapplicationsOctobercommercialtrials
174、Octobertrials(64Kbps)IxRTT(140kbps)3-4additionalprovincialoperatorsLaunchLaunchChina MobileChina UnicomExisting networksGSMGSM/CDMA59麦肯锡中国移动总体战略e文版BOTH CHINA MOBILE AND UNICOM* FOCUSED THEIR GPRS PILOTS IN COASTAL AREASBeijingMobile/Motorola,1.4msubsTianjinMobile/Motorola,500,000subsLiaoningMobile/H
175、uawei,1.3msubsShanghaiMobile/Siemens,2msubsZhejiangMobile/Alcatel,2.5msubsFujianMobile/Nokia,2msubsGuangdongMobile/Ericsson,5.7msubsRationale VoicewillremainkeyrevenuesourceformobileoperatorsintheshortrunDemandsfordataservicewillprimarilyoriginatefromdevelopedcoastalarea&majorinlandcitiesMobiledatas
176、erviceisfarfromdeveloped,whichlimitsittocoastalareasItisestimatedbyChinaMobilethatGPRSmarketsizewillreach1millionbyendof2001ChinaMobile*Unicom*WuXiUnicom/Ericsson,SubscribersN/AShanghaiUnicom/Nokia,360,000subsShenzhenUnicom/Motorola,270,000subsGuangdongUnicom/Nokia,1msubs* UnicomGPRStrialsonholdasat
177、tentionhasshiftedtoCDMA*Subscribernumbersfromearly2000Source:Literaturesearch,industryinterviews60麦肯锡中国移动总体战略e文版CHINA UNICOM HAS LAUNCHED NATIONWIDE CDMA NETWORK AS BASIS OF CDMA2000 NETWORKCapacityofsubs,Million20012002E2005E152050CDMA20001XRTTIS-95Source:Literaturesearch,industryinterviewsTechnolo
178、gy CAGR 35%61麦肯锡中国移动总体战略e文版EVOLUTION OF MOBILE RADIO STANDARDS IN CHINA LEADS TO THREE 3G ALTERNATIVES* Availablebyendof2002* AssumingdualmodeGSM/W-CDMAsolutionSource: Variousvendors;McKinseyanalysis2G2.5GIS-95AGSMCDMA20001xRTTCDMA(ChinaUnicom)GSM(ChinaMobile,Unicom)IS-95BGPRSChina timingPresent2002
179、W-CDMA*(UTRAFDD)CDMA20003xRTTTD-SCDMA3G2003TSM*2003-200462麦肯锡中国移动总体战略e文版OUTLOOK FOR 3G STANDARDS IN CHINAAll 3 standards likely to exist in some capacity in ChinaW-CDMATD-SCDMACDMA2000China outlookAggressivelymarketedbyMNCvendorsRemainsthemostwidelyknownstandardandwillprobablyexistinChinaFavoredbygo
180、vernmentasthefirst3GstandardtobedeployedinChinaSeenasChinesetechnology,whichisveryimportanttodevelopmentofChineseITindustryUnicomplanningtoupgradeCDMAnetworkto1XRTTinearly2002Support in ChinaEricssonNokiaOperatorsHuaweiGovernmentOperators(reluctant)DatangSiemensNortelHuawei(moderatesupport)QualcommL
181、ucentSamsungZTEChinaUnicomGovernmentandoperatorsupportforTD-SCDMADelayedavailabilityofFDDspectrumAvailabilityofW-CDMAoutsideofJapan(includingdualmodehandsets)TechnologydevelopmentTerminaldevelopment(chipset)LowermarketawarenessandconfidencebyoperatorsNotclear3GlicenseforCDMA2000wouldbegranted,orifex
182、istingCDMAlicenseallowsupgradesto1XRTTand3XRTTMain obstacles in ChinaSource:McKinseyanalysis;Industryinterviews63麦肯锡中国移动总体战略e文版3G SPECTRUM HAS ALREADY BEEN ALLOCATED FOR W-CDMA AND TD-SCDMA, ALTHOUGH FDD SPECTRUM (W-CDMA) IS CURRENTLY USED FOR WLL IN SOME CITIES20 mhz30mhz60mhz15 mhz60mhzVoidTDDFDD
183、(uplink)SatelliteTDDVoidFDD (downlink)Void188519001920198020102025211021702200Air interfaceModeSpectrum rangeTotal spectrumBandwidthAvailabilityTD-SCDMATDD1900-19202010-202535mhz1.6mhzAvailablenowW-CDMAFDD1920-1980(UL)2110-2170(DL)60mhz5.0mhzCurrentlybeingusedincertaincitiesforWLL,andexpectedtobecle
184、anedupby2003-2004Source: TheInternationalEngineeringConsortium(IEC);Interviews;MII64麦肯锡中国移动总体战略e文版W-CDMA IS SCHEDULED FOR LAUNCH PER CHINA MOBILE BY 2003, ALTHOUGH SOME QUESTIONS REMAIN ABOUT VIABILITY OF TECHNOLOGY AND AVAILABILITY OF DUAL MODE HANDSETSLaunchin2003-2004*Notavailableuntil2H2002atthe
185、earliestwhentheW-CDMA/GPRSdual-modephonebecomeavailable,andmaybedelayeduntilTD-SCDMAlaunchedSource:Industryinterviews;Governmentinterviews;McKinseyanalysis20022003200420052001TechnologyPossible launch scheduleAllocatedtoFDDbutnotreadytoawardtooperatorsFDD SpectrumFDDspectrumandlicensewillbeawardedto
186、operatorsCommerciallyavailable*65麦肯锡中国移动总体战略e文版TD-SCDMA IS LAGGING BEHIND IN TERMS OF COMMERCIALIZATION AMONG 3G CANDIDATESMobile network equipmentMarket awarenessCDMA20001XRTTtechnologycommercialwith400,000usersinKoreaChinaUnicomwillconstructCDMA20001Xtestnetworksin10-15majorChinesecitiesCDMA20003X
187、RTTisinpreliminaryR&DphaseCDMA 2000GrowingsupportespeciallybyUSoperators400,0001XRTTusersinKoreatodayJapaneseoperatorswillalsoadoptPrimarilysupportedbyUSandKoreanvendorsEquipmentcommercializationnearlyfinishedinJapan44contractsforW-CDMAsourcingfinalizedTestnetworksarenotperformingwellW-CDMAPreviousl
188、y,themostwidelyacceptedtechnologyForatime,hasbeenpreferredoptionfor3GtechnologybymostoperatorsLargevendorbasesupportledbyEricsson,NokiaMobile terminalLucenthasCDMA2000(1XRTThandsetprototype,laterthisyearmassproductionstartsQualcommdevelopingdualmodechipsetforCDMA2000andW-CDMAChipsetdesigncompletedNo
189、prototypeavailableUnclearwhenW-CDMAterminalswillbeavailableoutsideofJapanSomequestionwhetherdualmodeGSMW-CDMAhandsetswillbeavailablebefore2004Time to marketCDMA20001XRTTtobelaunchedinearly2002NotimescheduleforCDMA20003XRTTintroductionUnclearwhetherCDMAlicenseincludes1XRTTor3XRTTOverallpostponingofW-
190、CDMAtimetomarket.Possiblynotlaunchedonlargescalenationwidefor2-3years,duetocomplexitiesofdualmodesolutionNetworkequipmentprototypewillbeavailablebyendof2001CallbetweenterminalprototypecompletedonApril27VideotransmittedbetweenbasestationsandterminalsonJuly4TD-SCDMASignsofmobilizationforchipsetdevelop
191、menthaveappeared(Qualcomm,TI,Phillips)Chipsetdesignisexpectedbyproponentstobecompletedin2002Prototypeandcommercialhandsetswillpotentiallybeavailablebylate2002ProponentsexpecttolaunchinChinabyendof2002ProponentsexpectTD-SCDMAtopotentiallyenterinternationalmarketsafterChinalaunchViewedasinferiorChines
192、etechnologydespitetechnicaladvantagesandsignificantSiemenscontributionLowerawarenessandacceptancebyindustrythoughacceptedbyITUand3GPPCurrentlySiemensandDatangarethekeysupportingvendorsSource:Industryinterviews;Analystreports66麦肯锡中国移动总体战略e文版TD-SCDMAS PROSPECTS LARGELY DEPENDS ON THE TIMING AND VIABIL
193、ITY OF TECHNOLOGYTD-SCDMA TechnologyPossible launch schedule2002200320042005TDDspectrumisreadytobedistributedtooperatorsassoonastechnologyisready2001Scenario1Trial*CommerciallyavailableScenario2TrialCommerciallyavailableScenario3TrialFailsScenario1Launchin2003Scenario1Scenario2Launchin2004Scenario2S
194、cenario3TD-SCDMA never launchesScenario3TDD SpectrumThe timing of the commercial availability of TD-SCDMA technology can be summarized in 3 scenarios. In scenario 1, TD-SCDMA is available by the end of 2002. In scenario 2, development is delayed due to terminal inavailability, and launch occurs in 2
195、003. In scenario 3, TD-SCDMA fails to launch* Trialswillincludeinfrastructurebuildoutin2002Source: Industryinterviews;McKinseyanalysis67麦肯锡中国移动总体战略e文版TD-SCDMA ALSO HAS ADVANTAGES IN MIGRATING FROM GSMNewhardwareinvestments9.6KbpsBothpathsbeginfromGSMnetwork2 G115KbpsPathconvergencecontinuesthrough2.
196、5G2.5 GMigrationData trans-mission rate Comment 384Kbps(mobile)2Mbps(stationary)ContinuedleverageofGSMnetworkforTD-SCDMAMixedapplicationcapabilityInvolveswidespreadnewinvestment384KbpsTSM:3GlikeperformancewithminimaladdedinvestmenttoGSMnetwork2001Late2001/200220032003-2004GSMBTSMSCTD-SCDMA pathW-CDM
197、A pathBSCGSMUMSCTD-SCDMANodeBTD-SCDMANodeBFDDNodeBFDDNodeBUMSCW-CDMA3G TD-SCDMARNCBSCenhancedMSCGSMBTSBSCenhancedTD-SCDMAGSMBTSGPRSBSCPCUMSCSGSNGGSNTD-SCDMANodeBSGSNGGSN3 GGSMBTSMSCBSCGSMGSMBTSGPRSBSCPCUMSCSGSNGGSNRNCSource: Industryinterviews68麦肯锡中国移动总体战略e文版OPERATORS WILL NOT NECESSARILY DECIDE 3G
198、STANDARD, AS MANY STAKEHOLDERS WILL HAVE INFLUENCE, AND THE GOVERNMENT HEADS THE LIST StakeholderRelevant entitiesGeneral positionDegree of influenceGovernmentStateCouncilStatePlanningandDevelopmentCommissionMinistryofScienceandTechnologyMinistryofInformationIndustriesLowawareness.Willconsidergeopol
199、iticalpressureandnegotiations.ExpectedtosupportTD-SCDMAbasedonnationalinterestindustrydevelopmentLowawareness.ExpectedtosupportTD-SCDMAbasedonnationalinterestStrongsupporterofTD-SCDMAbasedonChineseoriginGenerallyastrongsupporterofTD-SCDMAbut,somedissentwithintheministryOverridingdecisionmakingpowero
200、verallotherentitiesNexttoStateCouncil,greatestpowerStrongadvocatebutnotcentralPrimarydecisionmakerOperatorsExistingNewChinaMobileChinaUnicomPrefersW-CDMA,duetolackofconfidencewillsupportTD-SCDMAifinnationalinterestWilltrytodevelopCDMA2000.UnclearhowtodevelopGSMnetworkStrongerconfidenceinW-CDMA,butle
201、ssstrongviewonimportanceofstandardUnclearabouttechnologies.WillsupportnationalinterestsEagertoadoptandrolloutTD-SCDMAasplayforgovernmentsupportStateownedflagshipoperator;willacceptgovernmentdecisionsininterestofcountryMayhavegeneralbargainingchipwithCDMAdecisionWilltakewhateverspectrumisgrantedbyMII
202、WilldowhateverMIIplansLittledirectinfluencegivenownershipbyMinistryofRailwaysChinaNetcomChinaTelecomChinaRailcomLocalequipmentvendorsDatangHuaweiZTECo-developerofTD-SCDMASupportsTD-SCDMAbutinvestingheavilyinW-CDMAStrongsupportforCDMAgivenQualcommsupportFavoredsonofMIIgivenhistoricaffiliationbutquest
203、ionsaboutcapabilityofCATTPrivatizedbutmostcompetentlocalvendorViewedassuccessfulSOEForeignequipmentvendorsEricssonMotorolaNokiaSiemensNortelAggressivelypushingW-CDMAHedgingandwaitingtoseeduetofailedbeton2GPositionprobabilityinbetweenEricssonandMotorolaSupporterofTD-SCDMA,buthedgingwithW-CDMAProvider
204、alltechnologies,butcooperatingonTD-SCDMARNCtogainfavorInfluencethroughgovernmentlobbyinganddiplomaticmissionIndirectinfluencethroughoperatorsLocalhandsetplayersEricssonBirdKejianManyothersEagertogaintechnologiesManyrecognizeTD-SCDMAaseasierpathforgainingdomesticmarketshareLowindividualinfluenceGover
205、nmentwillconsiderimpactof3GonthemOtherstakeholdersQualcommTexasInstrumentsVariouspositionsCompetingforchipsetvalueStronglobbyingforce(Qualcomm)Source:Industryinterviews69麦肯锡中国移动总体战略e文版3G REGULATORY RESPONSIBILITIES3G regulatory tasksResponsible organizationProgressFrequencyallocationRadioFrequencyAd
206、ministrationDept.,MII3GspectrumspecificationcompletedFDDspectrumsneedtobecleaned-up3GstandarddecisionStateCouncilScience&TechnologyDept.,MIIScience&TechnologyDept.,SPDCVariousresearchinstitutes(CATT,RITT)Currently3GradiostandardssettingarestillunderdiscussionWaitingandhopingthatTD-SCDMAisviable3Gtim
207、ingScience&TechnologyDept.,MIITD-SCDMAcanbeginanytimeOtherstandardsin2002or2003TelecomAdminDept.,MIIStateCouncilSPDCMostlikelywouldawardtoexistingoperatorsand1-2newoperators3Gsupplierqualification(licensing)PlanningDepartment.,MIITelecomAdministrationDepartment.,MIIAllexistingMNCsuppliersarelikelyto
208、receivelicenses,ifproductsmeetspecificationLocalsupplierswillbepreferredNewentrantsreviewedontechnologyandsubjecttoimportrestrictionifnotmanufacturedlocally;approvalforentryofnewvendorslikelytobelimited3GoperatorlicensingandallocationofspectrumDecisionmakerSource: MinistryofInformationIndustries;CIT
209、ICCIEC70麦肯锡中国移动总体战略e文版SPDC & MIIs CURRENT POSITION ON 3G STANDARDSProblem areasCurrent positionViewthisasasuccessofChinesetechnologyViewthisasopportunitiesforlocalindustrytosucceedLocalmanufacturerssupportoutsideofDatangMNCterminalmanufacturerssupportTD-SCDMAThe government clearly supports TD-SCDMAA
210、nticipatedannouncementofsupportforTD-SCDMAcontingentonsuccessoftrialsTDDspectrumallocatedforTD-SCDMATD-SCDMAtrialstobepermittedwheneverproductisavailableFDDlicensingmaybedelayedforoneyearMNCsbeingpressuredtosupportTD-SCDMAW-CDMAMonitorandstudyConsideringholdingofflicensesforoneyearafterTD-SCDMAPress
211、urefromEUforfairtradeLobbyingbyMNCsCDMA 2000NotasactivelymonitoredandstudiedasW-CDMAWhether2GCDMAwillbewidelydeployedPressurefromUSforfairtradeNotconfidentyetaboutthetechnologypendingtrialsNeedcommitmentofotherlocalequipmentsuppliersbesidesDatangNeedcommitmentofterminalsuppliersHowever, the governme
212、nt is not ready to make a final decisionSource:MinistryofInformationIndustries;Industryinterviews71麦肯锡中国移动总体战略e文版GOVERNMENT RATIONALE FOR TD-SCDMA POSITION BASED ON DESIRE TO INCREASE COMPETITIVENESS OF CHINESE TECHNOLOGY AND CAPABILITY OF LOCAL VENDORSSource: MIIInterviews;RITTinterviews;CITICCIECF
213、actors for considerationSupportoflocalindustriesIPRsforChinaProtectingexistingnetworkinfra-structureinvestmentPoliticalconsiderations,i.e.,traderelationsDesiretoleadthetechnologydevelopmentDesiretoconformwithglobalstandardSupporting TD-SCDMA becauseAvoidingforeignIPRsPromotingChinesetechnologyandsta
214、ndardTimetomarketadvantageforlocalsuppliersPotentialforexportNot promoting TD-SCDMA exclusively becauseThreatofunfairtradepracticeaccusationsPressurefromEUandUSUncertaintyinstandard,productdevelopmentandterminalavailabilityGovernment wants to avoid a market dominated by foreign players as experience
215、d in 2G72麦肯锡中国移动总体战略e文版CHINA MOBILE MAY ADOPT BOTH TD-SCDMA AND W-CDMA WHILE CHINA UNICOM WILL LIKELY EMPHASIZE DEVELOPMENT OF ITS CDMA NETWORKCurrent operatorsApproach Probability Rationale Quotes China MobileChina UnicomMediumHighChinaMobilewillbeexperiencingGSMcapacityshortfallsinmanymajorcities,
216、whichmayinfluence3GdecisionGivenitsadvantagesinassymetrictransfer,TD-SCDMAbeingconsideredfordataservicingroleChinaMobileislikelytoadoptTD-SCDMAundergovernmentinstructionstosupportnationalinterestsChinaMobileprefersandwilllikelytoadoptW-CDMAjointlywithTD-SCDMAtocomplementeachother“ChinaMobilewilladop
217、tW-CDMAanduseTD-SCDMAascomplementarytechnology Li Mofang, China Mobile “CDMA1XRTTwillbereleasedcommerciallybyearly2002 China UnicomMediumMediumHighChinaUnicomwillfocusonexpandingCDMAnetworktobuildnationalcoverageinthecoming1-2yearsChinaUnicomwillattempttowinhigh-valueclientsfromChinaMobilebyleveragi
218、ngCDMAstrengthsinqualityandcapacityChinaUnicomwillnotbuildGPRS,focusinginsteadonrolloutofCDMAinOctober,andCDMA20001xRTTinearly2002ChinaUnicomhaslittlepressuretoupgradetheGSMnetworkgivennewspectrumavailabilityontheCDMAnetwork.MigratingtoTD-SCDMAorW-CDMAremainsanoptionbutnotaprioritynoranecessityInter
219、nalcompetitionwillhappenbetweenCDMAandGSM;ChinaUnicommaypositiontheCDMAnetworkasahigh-endnetwork,andtheGSMoneaslow-end3GTD-SCDMAW-CDMATSMGSMGPRSGSMGPRSTDDGSM3GTD-SCDMAW-CDMACDMACDMA20001XRTTCDMA20003XRTTLikelyapproachSource: Interviews73麦肯锡中国移动总体战略e文版TECHNOLOGY PATHS OF NEW OPERATORS WILL LIKELY AVO
220、ID SIGNIFICANT INVESTMENTS IN 2G INFRASTRUCTUREPotential new operatorsApproach Probability Rationale Quotes China TelecomChina NetcomLowHighMediumLowRegulatorybodiesarenotinclinedtoawarda2GlicensetoChinaTelecomPlanstowaituntil3Gentersmarketandadopt3GdirectlyLackofexperienceinmobilewillmakeChinaTelec
221、ommoreattentivetogovernmentmandatesandopentoTD-SCDMACDMAremainsaremotepossibilitydependingoninavailabilityofTD-SCDMAorW-CDMAandmigrationofCDMAbasedWLLnetwork“AsalmostallofourmobileexpertsareallocatedtoChinaMobile,wehavetorelyongovernmentmandates.Wewilladoptwhatevertechnologybasedonwhicheverbandwidth
222、thegovernmentallocates China Telecom“WewiilldowhatwecantopreventCMandCUfromtakingafirstmoveradvantageinmobiledata.Wemustenterintomobiledataservicequickly” China NetcomLowMediumMediumVendorsfor2standardsarebeingassessed:MotorolaandNokia(W-CDMA)andSiemens(TD-SCDMA)AgreementonpartnershipwithNokiatoallo
223、wNokiaprovidebasicskilltrainingMotorolaareintroducingW-CDMAtoCNCinsteadofCDMA2000SiemensisinvitedtopresentonTD-SCDMAPrefertochoosestandardthatwillgetthemfastesttomarketLikelyapproach* RailroadspectrumSource: IndustryinterviewsChina RailcomTD-SCDMAGSM-R*GSM/GPRS3GTD-SCDMAW-CDMATSMCDMA20001XRTTCDMA20003XRTT3GTD-SCDMAW-CDMATSMGSM/GPRSLease2GfromChinaMobileorChinaUnicom“WewouldliketoentermobileserviceswithTD-SCDMA China RailcomChinaRailcombelievesadoptingTD-SCDMAwouldincreaselikelihoodofgainingbroadmobileservicelicenseHigh74麦肯锡中国移动总体战略e文版
