Market Opportunities in Chinese MVNO Business for Finnish Companies. Seppo Selkälä Head of Finland Trade and Technology Beijing

Transcription

1 Market Opportunities in Chinese MVNO Business for Finnish Companies Seppo Selkälä Head of Finland Trade and Technology Beijing

2 Contents What is Happening on the Market? MVNO Policy in China Development of MVNO Market in China? 2

3 What s Happening in the Market? More and more consumers have access to smart phones Share of mobile phone users that use a smartphone in China: 43% (2014) Mobile internet subscribers overpasses fixed internet user in spring 2014 China has issued 42 mobile virtual network operator licenses until now to Chinese companies The mobile communications market is opening to private companies 3 12/05/2015 Finpro

4 Accelerated Upgrade of Mobile Users ,5% 13,0% By the end of ,29 B mobile users net increase of million 2G users are transferring to 3G/4G rapidly, user structure is optimizing; the 3G/4G penetration reached 45.3% The users of emerging business are growing rapidly The number of mobile payment users reached 7 million, the growth rate is 94% The number of M2M users reached million, the growth rate being 35.5% ,9% ,7% G users 3G users 4G users 3G/4G pennetration 45,3% 4

5 Increase of Mobile Internet Traffic 62,8% User Growth of Mobile Internet 67,3% 62,9% 64,9% Data Traffic Growth of Mobile Internet 98,3% 95,1% User Number(Million) User Penetration 37,4% 40,0% Data Traffic(Million GB) Growth Rate DOU Growth of Mobile Internet 74,2% 85,0% 6,2% 14,5% , DOU(MB/user/Month) Growth Rate of DOU Mobile Internet users reached 835 m with penetration being 64.9% in 2014 The data traffic of mobile phone 1.79 billion GB with growth rate of 95.1% The DOU of Chinese mobile phone users reached 186 MB with growth rate of 85% 5

6 Contents What is Happening on the Market? MVNO Policy in China Development of MVNO Market in China? 6

7 Regulations for MVNO activities In May 2013 the Chinese Ministry of Industry and Information Technology (MIIT) announced that it would allow MVNO activity in Mainland China for a two-year trialperiod Private enterprises wanting to enter the telecom market have been able to apply for a license in order to lease the networks from the state-owned MNOs (China Mobile, China Unicom, China Telecom) and offer repackaged telecom services of their own The MIIT has ruled that all of the MNOs must enter into such an agreement with at least two MVNOs, and at a wholesale price that s cheaper than the most preferential retail price offered to the MNO s own customers 7

8 Objectives of MVNO Pilot in China Take advantage of private capital s flexibility and innovation, active business and service innovation Satisfy mobile users application demand of individuation and differentiation 8 Explore the cooperative competition pattern and regulation policy between MNO and MVNO Promote the competition gradation and service level, protect users legal right in mobile telecommunication market Source: CATRI Presentation January Beijing

9 Contents What is Happening on the Market? MVNO Policy in China Development of MVNO Market in China? 9

10 42 Chinese MVNO License Holders Last year, there are 42 companies who obtained MVNO pilot approval in China China MVNOs began the business in May 2014 and by the end of MVNOs provided commercial service MVNO users 4,7 m (source MIIT), Snail Mobile largest with 1m By end of m subscribers, 8-10% market share in 5 years (about 100 m) 10

11 Current Modes of Operation Most of MVNO players set up individual department or subsidiary companies to operate in the MVNO business Each MVNO player has own focus area based on their current business, such as e- commerce, m-health, m-payment, SMEs solution, smart home, etc. Most of them are still doing the internal resource integration Due to the current cooperation model with operators (China Mobile, China Unicom and China Telecom), most of MVNOs lack good business models, they are looking for solutions The main focus for MVNO players at the moment is to build the ecosystem and increase the number of subscribers 11

12 License Holders Have Various Backgrounds The background of Chinese license holders vary Licensees include for example: E-commerce giants Mobile phone vendors Companies involved in software/media/gaming industries/airline Companies have different plans on what services to offer ranging from normal mobile communications and text/data services and from healthcare to mobile office solutions 12 12/05/2015 Finpro

13 Licence Holders Need to Differentiate from Each Other Mobile virtual network operators need solutions enabling service to their customers For example business support services and platforms such as customer care, billing system, mobile commerce platforms and more advanced services platforms such as SMSC or Voic Typical value added content such as games and applications to differentiate from other service providers In the long run also offering that is more specific and targeted to selected consumer groups 13 12/05/2015 Finpro

14 Operators Want to Develop Concepts to Serve Selected Clients Many of mobile network license holders will develop concept to answer certain segment s needs For example; Funtalk is targeting its services at active people with high concern for personal health This segment will be offered health related special services, such as health management terminals integrated into the mobile subscription China Telling Communications aims their services to segments of people who love sports, who take care of health and family members Suning is targeting its services at 3 segments which include: smart home, entertainment and smart transportation /05/2015 Finpro

15 MVNO License Holder Grouping Grouping Companies MVNO Business Focus Areas E-Commerce JD E-commerce business + MVNO business Suning Ali Based on MVNO business to promote its e-commerce business,. Smart home, entertainment and vehicle business. Build full mobile-internet business including e-commerce, m-commerce, etc. Gome China Minsheng Bank To promote its main electronic appliance and digital device sales business, form the O2O To promote its E-business service Retail/distribution D.Phone To penetrate mobile internet business and form O2O business Funtalk Focus on health and lifestyle related sectors Telephone World To support its mobile phone sales and start mobile-internet business Internet/Mobile Internet Application /Solution Aisidi Hengdahe PTAC SnailMobile Soshare Yonyou Channelsoft Busap To support its mobile phone sales and involve in mobile-internet business To act as mobile internet service provider To form O2O business To promote its mobile application business, especially mobile game To provide cloud computing business, enterprise solution To provide enterprise solution based on mobile communication To provide enterprise solutions To provide wi-fi on buses, and focus on young generation service 10 12

16 MVNO License Holder Grouping Grouping Companies MVNO Business Focus Areas Internet/Mobile Internet Application/Solution Huatone CIFCO Group Bewinner To provide enterprise solution based on MVNO business Focus on m-finance service Focus on wi-fi business to build nation-wide wi-fi service 263 To promote mobile internet business, value-added service and enterprise solution business Lianlian Tech Changjiang Era 35.Com CIFCO 21Vianet Yisheng E-Pay Youku Seecom (ZTE) Longmaster Yuantel To promote m-commerce business Focus on the smart transportation solution To provide enterprise solution, cloud computing business To provide m-finance services To enhance its IDC business and mobile enterprise solution (Infrastructure bases) To support its mobile payment business To support its online media business To provide smart home solution, and enterprise solution To enhance its mobile-internet business, especially for mobile value-added services To provide enterprise business Dr. Peng To provide enterprise solution, data center service 16

17 MVNO License Holder Grouping Grouping Companies MVNO Business Focus Areas Other Foxconn To provide telecom business for its factory area Stellar International Haier Hongdou XiaoMi Lenovo Hainan Airlines Pingan Phoenix Hisense Guangzhou Boyuan (China Motion) To enter mobile media and entertainment business To support its smart home business To provide wearable solutions based on MVNO business To combine with its smart phone business, form the whole eco system To promote its mobile phone business and support its other business N/A To provide enterprise service N/A To support its mobile phone, home appliances business and form smart home eco system. Enterprise solution 17

18 Contacts Seppo Selkälä Head of Finland Trade and Technology Center at Beijing Finpro Beijing /