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皇冠体育app 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

皇冠体育app'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: 皇冠体育app Mobile is facing the risk of losing its users, while 皇冠体育app Telecom is likely to surpass 皇冠体育app 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."

Related readings:  Unicom offers more 3G freebies  Qualcomm to ride 3G wave for growth  3G ready but users lag behind  Stiff competition, capex may take sheen off 3G

CTR conducted the first nationwide survey on 3G two weeks ago before World Telecommunications Day. The telephone interview survey looked into awareness, attitude and usage intention toward 3G service, covering 1,909 random cell phone and Personal Handy-phone System (PHS) users across 10 major cities including Beijing, Shanghai, Guangzhou, and Shenzhen.

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

Source: CTR 2009 皇冠体育app 3G Survey

 

Mobile telecom market faces changes as 3G brings more alternative choices to users

On May 17 when 皇冠体育app 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

Source: CTR 2009 皇冠体育app 3G Survey

Figure 3: 3G operators preferences among existing mobile users

Source: CTR 2009 皇冠体育app 3G Survey

The survey reveals that 皇冠体育app Mobile has stronger ability to retain its existing users, with over 60 percent of its current users continue to use its 3G service, also 皇冠体育app Mobile's 3G service is attracted by 42 percent of 皇冠体育app Unicom users and 33 percent 皇冠体育app Telecom users respectively. Nevertheless, 皇冠体育app 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 皇冠体育app Telecom (11 percent) or 皇冠体育app 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 皇冠体育app Mobile because of the best service, its good reputation and availability to stick to the old operator without changing number.

Users prefer 皇冠体育app 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 皇冠体育app Unicom's 3G technical innovation plus its abundant 3G cell phone terminals.

Table 1: Reasons of choosing operators among potential 3G users (%)

皇冠体育app Mobile 皇冠体育app Telecom 皇冠体育app Unicom Ability to stick to the current operator without changing number 86.3 64.8 56 Extensive 3G network coverage 71.5 60.4 53 Best service 65.4 44.9 44 Friends' recommendation; good reputation 57.9 47.1 45 Preferential packages, free cell phone in exchange for service commitment 51.2 57.3 41 Technology Innovation 47.9 46.3 52 The best packages that meet user's needs 45.5 46.3 47 Good impression on its 3G services 40.4 52.9 42 Abundant 3G cell phone terminals 38.4 33 39 Reasonable charges for 3G services 35.2 44.5 35 Source: CTR 2009 皇冠体育app 3G Survey

Figure 4: Correspondence Analysis

Source: CTR 2009 皇冠体育app 3G Survey

In summary, all the three telecom operators are accelerating their respective 3G deployment to compete in this new market, and consumers are highly anticipating to receive the value-added service that is going to better their communication in their daily lives.