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BIZCHINA> Review & Analysis
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China telecom market may reshuffle as consumers show low loyalty toward 3G operators
By Michael Zhan,Zhang Ling and CTR Market Research (chinadaily.com.cn)
Updated: 2009-06-04 11:01 China's telecom industry entered the 3G era in January 2009 as the Ministry of Industry and Information Technology granted 3G license to the three manor operators. What are the changes and impacts 3G has brought to the Chinese market? According to the latest study of CTR Market Research, 3G will probably trigger a change to the current telecom market: China Mobile is facing the risk of losing its users, while China Telecom is likely to surpass China Unicom in promoting 3G business. Michael Zhan, Research Director of CTR commented: "Users and potential users see that 3G represents the fashionable and innovative high-technology, and it would enrich their experience through its multimedia functions."
Chinese consumers' brand loyalty is low, with 1/3 looking for better alternatives CTR analyzed the user's loyalty by using its patented research solution called "States of MindTM model", which indicated Chinese consumers' loyalty toward telecom operators is low. Only 22 percent of consumers are loyal to a certain operator, compared to 42 percent worldwide. "Seekers" who look for better choices account for 34 percent, as they are not completely satisfied with the service from their current operator. Figure 1 Chinese Mobile Phone User Profile
Mobile telecom market faces changes as 3G brings more alternative choices to users On May 17 when China Unicom began to distribute 3G numbers to users, all the three 3G networks have released their marketing plans to serve the 3G markets. How are the users' preferences? Figure 2: The preference of 3G operators among potential users
Figure 3: 3G operators preferences among existing mobile users
The survey reveals that China Mobile has stronger ability to retain its existing users, with over 60 percent of its current users continue to use its 3G service, also China Mobile's 3G service is attracted by 42 percent of China Unicom users and 33 percent China Telecom users respectively. Nevertheless, China Mobile is facing the risk of losing users as 60 percent is obviously lower than its present market share at 75 percent. In particular, 15 percent users tend to choose China Telecom (11 percent) or China Unicom (4 percent) for their 3G services. Each of the three operators owns its competitive edge What do consumers consider when it comes to choose a 3G operator? The study also showed that every operator has its competitive territories. People like China Mobile because of the best service, its good reputation and availability to stick to the old operator without changing number. Users prefer China Telecom's initiative 3G image as well as its preferential measures, in addition to its convenience of staying with same number and extensive network. Consumers are fond of China Unicom's 3G technical innovation plus its abundant 3G cell phone terminals. Table 1: Reasons of choosing operators among potential 3G users (%)
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