Forecasts of the number of potential 3G users in large and medium Chinese cities
September 28, 2005
Research and Markets has announced the addition of Telecom Operation--Focus Report on 3G Customer Demands 2005 to their offering.
Facing varied results of overseas 3G implementations and uncertainty about securing 3G licenses in China, service providers need to carefully measure the opportunities, strive for an advantageous competitive position, plan a profitable investment strategy and grasp a full understanding of the situation before the licenses are handed out in the coming 3G age. Therefore, understanding 3G customer demands has become one of the most pressing needs for service providers in the current stage. Answering these needs will have a strong impact on the service provider's decisions regarding network construction, user development methods and marketing strategies.
Based both on qualitative and quantitative methods this report applies a research method of combining secondary analysis with in dept primary research into the consumption habits of potential 3G users that have the desire and capability to consume mobile communication and 3G services. The report also gives marketing suggestions targeted at specific market segments. Its value mainly lies in:
-- The Forecasts of the number of potential 3G users in large and medium Chinese cities.
We has predicted that the number of potential 3G users in big and medium cities in China in the initial implementation phase. This provides a foundation for the service providers to determine the investment strength, progress and coverage of 3G network construction, and made it possible to help them construct a 3G network step by step, provided services by utilizing network capacity economically and effectively and optimize the network return on investment (ROI). This is based on a long-term examination of service provider development, user's consumptions in existing networks, and deep understanding of regional differences between users.
-- Analysis of potential 3G users' consumption behaviors and habits
We have analyzed consumption behavior and habits of potential 3G users. This in-depth study establishes important references for service providers to know the users, enhance service quality and levels, make pertinent marketing decisions and develop better services. This is based on a long-term and systematic study of customer habits and thorough grasp of market demands,
-- Market Segments of potential 3G users
Based on a structured and systematic method, Research and Markets have studied the internal factors that make up user consumption behaviors and has set up an effective method of subdividing potential 3G users into four market categories. This establishes a foundation for effectively distinguishing clients, applying successful marketing strategies, satisfying user demands, gaining competitive advantages, and receiving profitable returns on investments.
Research and Markets Findings
Number of potential users
-- The number of potential users is influenced by the following factors:
-- Progress of 3G-network construction
-- Technical maturity of 3G mobile phones,
-- Costs of mobile services
-- Service development and combinations that meet users' demands and policies.
-- Based on large sample size research and secondary analysis, and considering the influence of the existing network coverage, we predict that in 2006, 3G users could potentially reach 22.67 million. By 2008, this number is expected to reach 106.08 million due to the completion of 3G network's expansion for national coverage.
Character and Composition of Potential Users
-- Young people between 20 and 28 accounts for 55.5%, more than half of the total potential users. Users with college qualifications and below account for 78.4% and university graduates 21.6%. The average academic qualification is far higher than the nationwide average. Students, private owners, and commercial services personnel represent the potential users group.
-- The potential users have a large capacity for consumption with a monthly telecommunication budget greater than 100 Yuan.
-- Most of the potential users enjoy an affluent lifestyle that emphasizes family and social activities. They actively pursue new experiences and work hard to create the life they want.
Potential users awareness and desired usage of 3G
-- Users' awareness of 3G is reasonable and clear. Their expectations for operations, technical features and advantages of fast network speeds are consistent with what 3G can deliver.
-- Potential users' predicted average price of 3G mobile phones is only a little higher than current average price of 2G mobile phones. The number of potential users willing to buy mobile phones priced higher than 3,000 Yuan is small.
-- 3G Value-Added Services that the potential users are willing to use are mostly for entertainment. The proportion of users willing to buy such value-added services as commercial and information applications is small. After the launch of 3G, the conditions in China will be similar to Japan and Korea--entertainment will account for the main part of the value-added services in the initial phase. Out of all the entertainment services, video content is most preferred.
Users' Awareness and Use Intentions of 3G per Service Provider
-- Most of the PHS users are low end users. Only 27.3% have heard about 3G. That can be compared to the 62.5% awareness of China Unicom's CDMA users.
-- For 3G mobile phones, post-paid users pay more attention to functions; pre-paid users are more concerned with appearance; and PHS users value a good price.
-- 76% of pre-paid users will use mobile phone Internet functionality, while not being interested in other 3G value-added services. Users with post-paid contracts have interests in some of the higher-level 3G services.
Market Segments of Potential Users
-- By qualitative study and quantitative analysis, we divided potential 3G users into four markets categories. These are: student, newly thriving white collar, business elite, and steady and practical.
-- Modern students are young and have little income, but they are interested in fashion.
-- White-collar workers that are new to their respective industries try hard to fit in with the higher echelons of society. They use their academic degrees to secure high paying positions. While seeking out more success, they pursue entertainment and active lifestyles.
-- The business elite more senior with successful careers, high incomes and refined lifestyles.
-- The steady and practical remainder constitutes manly of older people with steady careers who emphasize family cohesiveness.
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