Product Strategy - E-Final

Strictly Confidential
Table of Contents
1. Market Forecast
2. Key Target Customers
3. Product Strategy
4. Strategic Partnerships
5. Channel Strategy
6. Brand Strategy
7. Organization
3-1
Summary of product strategy
 ZMCC has launched a series of products targeting enterprises of Type A, B and C and their employees. Employee
market research and focus groups with decision makers confirm early successes of several of these products, such as
VPMN
 Going forward, however, ZMCC faces several challenges: enterprises increasingly demand tailored solutions; ZMCC’s
innovation advantage against competitors could be weakening; and ZMCC has yet to demonstrate credibility in the
fixed-line segment
 In order to overcome these challenges, CKAD must develop Group Customer/Enterprise product roadmaps that fulfill
four major objectives:
1. Retain existing customer base
2. Extend customer base
3. Develop new business areas
4. Build brand image
 Based on a long list of 190 potential applications and CKAD current plans about products, the team has identified 7
horizontal solutions categories, 6 vertical solutions categories, 41 generic solutions, and 52+ generic applications.
Taken together, these applications fulfill the four major objectives mentioned above
 The team has prioritized individual applications based on market attractiveness, strategic benefits, technology readiness,
and market readiness. As a result, the team is developing product roadmaps that cater to specific industries. As a next
step, applications will be further detailed to highlight required functionalities for each target industry
3-2
ZMCC is developing a comprehensive product offering to target employees and

enterprises
Examples of CKAD Current and Future Products
Wireless(1) Fixed-Wireless Fixed
Individual Products • Basic Voice • Mobile VoIP (17951) • Fixed line VoIP
Products/services that cater to the • VAS (Free Pagers, etc.) • Equal Access • ISP
needs of individuals not working • SMS/MMS
in a Type A, B, or C enterprises • CSD/GPRS connection
• Basic Voice • Mobile VoIP (17951) • Fixed line VoIP

Group Customers Products
• VAS (Free Pagers, etc.) • Equal Access • ISP
Products/services that target • SMS/MMS
employees working in Type A, B, • CSD/GPRS connection
or C enterprises
• VPMN
Enterprise Solutions • VPMN (2) • Mobile OA/Enterprise Info • VoIP (2)

• Enterprise remote access publication/Group SMS (2) • Leased Line Internet
Products/services that directly
address overall company needs • Wireless data application • Mobile conference call connection (2)
• STK Corporate Card • Wireless/Fixed PBX • Enterprise Internal Telephone
• Integrated VPMN Network
• WLAN+GPRS access
Core CKAD products • WLAN • IDC
• SMS/WAP gateway
• Unified messaging • Private line leasing
Additional, products to be • Uni-side payment service
• Enterprise Web/WAP • VPN/VPDM
considered for “Total
Solution” offerings KJAVA
Note: (1) Including voice, data and VAS

(2) Key products as component of “4+N” solution under major promotion
Source: ZMCC; A.T. Kearney analysis 3-3
Early products, such as VPMN, already are clear successes …
Would you like to join a Group Plan? VPMN Penetration Rate
100% 69% of total 22% of total
Maybe Market survey

16% results indicate
No that an approx.
8% 40% discount will
attract employees
Yes VPMN is
to join a group
76% ZMCC’s most
plan, despite a popular Group
required change product
in phone number
Total Know Already Use
Source: Focus Groups with decision makers; A.T. Kearney analysis 3-4
ZMCC is widely perceived as having a stronger product range than both ZU or

CT/XLT
Selected Quotes – Product Range
Enterprise Perspective – Perceived Performance
on Product Range
Weak Strong “ZMCC is so far providing the most comprehensive

product offerings in mobile products/service with widest
ZMCC network coverage and highest quality of network”
ZU
— IT/Telecom Manager,Bank
CT/XLT
“ZMCC has the capacity to be the leading total
solution provider in fixed line and mobile
products/services as long as it strives for delivery
Employee Perspective – Perceived Performance quality services”
on Product Range
Weak Strong — Business Manager, Insurance
Company
ZMCC “ZU has more sincere attitude and care for
customers, but in terms of choices of product
ZU-GSM offerings and quality of network, ZMCC is
superior”
ZU-CDMA
CT/XLT — IT Chief, High-tech Company
Source: Market survey, Focus Groups, A.T. Kearney analysis 3-5

However, enterprise customers increasingly demand tailor-made solutions

targeting their specific needs
Enterprise Customers – Interest in Tailored Solutions
The VPMN concept seems very interesting. For

It would be ideal if the operator can tailor a solution for example, the tourist guide can check flight seats
me rather than just “selling me products off the shelf” for customers easily
Telecom Manager, Government

Telecom Manager, Government
… the tracking of the tourist bus will be attractive

…Current ZMCC does not proactively understand our
to tourists because of the safety aspect
needs.. Mostly sell products to us based on what they
have… tailor-made solution would be the best
Telecom Manager from, Government
Telecom Manager, Manufacturing
… the VPMN would be useful for my reporters who

I wish my company enter the address into the mobile are always out of office. We are happy to try any new
device and then find most convenient way to arrive wireless products provided that the quality is good
at destination
Telecom Manager, Transportation Telecom Manager, Government
Large companies show a greater level of interest than smaller companies
Source: Focus Groups; A.T. Kearney analysis 3-6

There are also indications that ZMCC is losing its innovation edge against ZU …
Timing of Selected Products Introductions

Conference
Call
SMS
Gateway
Introduction
Family Plan by ZMCC
Introduction
Position by Unicom
System
VPMN
01/1/1 01/7/1 02/1/1 02/7/1
Unicom is gradually shifting from a price-based, fast follower strategy to a more

innovation-focused strategy
Note: (1) Including voice, data and VAS
Source: ZMCC, Interviews, A.T. Kearney analysis 3-7
… and that XLT is aggressively developing new data products
XLT Data Services Introductions in Hangzhou Industry Analyst Quotes

Time of
Data Service Applications Involved “… China Telecom and UTStarcom
Introduction
announced an ambitious plan to
SMS SMS between XLT 2002, 12, 24 increase the PHS user pool to 30
million by the end of 2003. Compared
SMS sent from internet to growth rates at China Mobile and
China Unicom of 16% and 26%
SMS between fixed SMS and XLT Short-term respectively, the PHS growth rate
stands at 64%”
SMS sent from call centre 11868
MiMi MiMi “Thumb” Information Service Short-term Norson Telecom
Market Intelligence
(C-mode portal information surf)
MiMi “Thumb” Email
(C-mode email or email with internet)
WiWi Internet connection with XLT handset + Short-term
modem + lap top, at 32k/64k
PDA or lap top internet connection with
“XLT E-card” at 32k/64k
GPS Location based services Short/Medium-
term
Source: Youth Daily 3-8

Enterprises in Zhejiang also demonstrate a strong interest in “one-stop-

shopping” solutions …
Selected Decision-Maker Quotes – One Stop Shopping Percentage of Decision-makers Favoring
Multiple Telecom Operators
“ We will certainly choose one-stop-
66%
“The key benefit of one-stop-shopping
shopping if operators provide the same is increased efficiency . This Manufacturing-
quality of services”
>80%
contributes to the bottom line of our high-tech
business.”
— IT/Telecom Manager, Transportation 80%
Shipping Company
— IT Manager from One of
the Four Major Banks Social service
“ The coming convergence of voice and
80%
data, fixed and wireless will make one-stop-
shopping concept more sensible and Government 70%
appealing”
“ The reason sometimes we consider
multiple operators is to create Financial 70%
— Telecom Chief, Telecom
Equipment Vendor competition. But if the one-stop-shopping industry
service provider can deliver a satisfactory
level of offerings and service level, this is Trading & 60%
the most ideal choice” Retail
“We will choose one-stop-shopping if the
operator can reasonably show us their back- Education & 30%
up solution in case of any potential crisis of Medical
network or service.” — Director of Administration,
Manufacturing-
Internet Firm
light & heavy industry 15%
— IT/Telecom Chief, Commutation
Equipment Vendor
Source: Focus Groups, A.T. Kearney analysis 3-9

… but ZMCC currently is not seen as a credible provider of fixed-line services
“We do not have a choice. CT is the only provider.

“How can ZMCC compete with China Telecom
We don’t even know that ZMCC provides fixed line
in fixed line products? They don’t even have the
service.”
last mile?”
— Telecom Manager, Tourism/Hotel

— Telecom Manager, Bank
“We don’t think ZMCC can build up the “Even if ZMCC has fixed line network, they will
fixed line network as ZT.” not be able to deliver the same level of services as
ZT”
— IT Manager, Hi-tech
— Telecom Manager, Hi-tech
“We will also need to consider country coverage for

our network in the bank. ZMCC will not be able to “Quality of network is our No. 1 purchasing
deliver this.” criteria. Can ZMCC really achieve this? Look at
Netcom!”
— Telecom Manager, Bank

— Telecom Manager, Manufacturing
Source: Focus Groups, A.T. Kearney analysis 3 - 10

China Telecom is currently perceived as the strongest potential provider of “one-

stop-shopping” total enterprise solutions
Customer Perception Selected Customer Quotes

Despite that China Telecom has very “China Telecom is clearly the No. 1 in the telecom field.”
few corporate wireless products Telecom Manager, Tourism/Hotel
products, most customers still believe
that they will choose a total solution “Who has a coverage as extensive as China Telecom? No one will be
from China Telecom. The main reasons able to build a fixed line network, close to what CT has, within the next
10 years.”
are:
Telecom Manager
• Perceived as No. 1 in the China “What about the issue of number portability?” — Why relevant?
Telecom market Telecom Manager, Manufacturing
• Trust in the China Telecom
brand “China Telecom has products and service guarantees.”
• Believe that China Telecom is Telecom Manager, Tourism
resourceful and has the ability to
“China Telecom and China Mobile used to be the same company. I
develop high quality products
believe that China Telecom can again provide mobile services easily.”
and provide best service
• Perceive that China Telecom has Telecom Manager, Tourism/Hotel
the best pricing among all “Based on our experiences with China Telecom, we have the confidence
operators that China Telecom be the best competent operator for fixed line and
mobile services.”
Business Manager, Hi-tech
Source: Focus Groups; A.T. Kearney analysis 3 - 11

We followed a 5-step approach to develop CKAD product strategy
1. Create a 2. Group applications 3. Prioritize solutions 4. Determine timeline 5. CKAD’s product

“Universe” of based on based on market based on market strategy and
potential mobile similarities and attractiveness and and technology industry specific
applications strategic purposes strategic benefits product roadmap
• Consult experts in • List ZMCC’s key strategic • Evaluate market • Identify and compare
international markets imperatives attractiveness of solutions technological requirements of
• Conduct internal • Identify horizontal and per target industries each solution
brainstorming and analysis vertical solution categories • Determine potential • Evaluate availability of required
• Screen out unrealistic ideas • Regroup individual strategic benefits of technologies
• Consider ZMCC current applications into generic solutions based on • Evaluate market readiness and
solutions retention and image ZMCC capabilities
offerings
building potentials • Determine feasibility according
• Consider additional
products from focus groups to ease of implementation,
and interviews market readiness, technology
availability, terminal availability
and ZMCC capabilities
• Long list of 190 potential • 7 horizontal solution • Prioritized list of solutions • Prioritized list of solutions over
enterprise applications, categories and 6 vertical • Fit with target customer time, including technological
including more than 130 solution categories industries** requirements
wireless data applications • 41 generic solutions • Short-term, top solutions
• 52 horizontal applications* priorities and corresponding
applications
Note: * Not counting for a large number of vertical applications that depend on tailoring to client’s specific needs
** From a market potential perspective 3 - 12
First, we created a “universe” of potential mobile applications

offerings
products from focus to ease of implementation,
groups and interviews market readiness, technology
including more than 130 solution categories industries requirements
• 52 horizontal applications priorities and corresponding
applications
Note:* Not counting for a large number of vertical applications that depend on tailoring to client’s specific needs
In order to develop CKAD’s product roadmaps, we started with existing ideas for
wireless and fixed-wireless applications …
1. Voice local calls, long distance calls and roaming 22. Mobile office assistance through group SMS, including
2. Free pager services (12591) meeting notices, salary bills sent to mobile phones
3. Call waiting 23. Simple enterprise announcement through SMS
4. Call reminding 24. SMS mail box
5. Voice mail 25. Email, mail, fax receipt notice through SMS
6. Calling party/receiving party pay (800) 26. UMS - email reading, reply and delete from mobile phone
7. Call conference 27. Mobile certification, i.e., password sent as SMS to mobile
phones from security network servers
8. Caller ID
28. SMS customs clearance
9. Call transfer
29. SMS account statement for banks, telecom and utilities
10. Call center
30. SMS bank payment receiving notice
11. VPMN
31. Area SMS broadcasting
12. Point to point SMS communications
32. GPS based taxi locator
13. MMS communications
33. SMS based data check and accident reporting by traffic police
14. GRPS access to mobile internet
34. SMS/GPRS based tax reporting
15. Mobile VoIP
35. SMS based invoice lottery notice
16. Fixed VoIP
36. SMS based airline delay/other information notice
17. Unified messaging
37. Mobile meter reading for utilities, gas station, etc.
18. Integrated VPMN
38. Mobile equipment monitoring
19. STK card
39. Mobile logistics information through SMS
20. Wireless PBX
40. Mobile lottery
21. Mobile secretary
Source: A.T. Kearney, ZMCC 3 - 14

…plus fixed-line and other applications available in China market
40. Fixed line local calls, normal long distance calls 52. Enterprise leased-line internet/intranet access
41. Fixed line VoIP calls 53. VPN
42. Enterprise leased line for voice 54. Internet data center (IDC)
43. Enterprise internal phone network 55. Intranet building
44. Fixed PBX 56. Wireless LAN
45. Dial-up internet connection 57. City Wide Area Network (WAN)
46. ISDN 58. Carrier branded terminals
47. ADSL
48. SDH
49. DDN
50. ATM
51. Frame relay

To complete the list of potential applications, A.T. Kearney brainstormed an

additional 132 applications with the Global Telecommunications Practice
59. Meeting room reservations 75. Accident/damage analysis and reporting for insurances
60. Mobile access to general information on company 76. Closing of orders for all kind of field forces
organization / products and prices 77. Receipt confirmation (end of delivery process) for couriers,
61. Mobile company directory postal services
62. Mobile tariff - calculators for energy or telecom industry 78. Remote Inquiry on parts availability
63. Mobile Office E-mail 79. Inventory control and management
64. Download and modification of files (Word,Excel,Time- and 80. On the spot quality control for utilities
expense sheet) Meeting room reservations, Coordination of 81. M-enabled product information / detailed support of field forces
appointments
82. M-enabled sales and marketing
65. Conversion of Fax/SMS/email/voice + alert for all devices
83. Online ordering of spare parts
66. Internet access
84. Online check of spare parts availability
67. Internet access (eventually restricted)
85. Data input of warehouse information (number/kind of goods
68. Mobile Dictionary via internet arrived / left / on stock etc.)
69. Routing programs via internet 86. Interaction about appointments, support materials, special
70. Currency converter via internet information with secretary, assistants, colleagues for sales
71. Search engines for internet forces / executives
72. General information (News, Weather, Traffic, Financial) via 87. Communication among professors / teaching staff and assistants
internet 88. Download of consolidated, secure data by executives of all
73. Specific traffic information for field forces, bus/taxi/truck- industries
drivers 89. Separate invoicing for private and business use of applications
74. Breaking News, Weather, Financial information, Market 90. Mobile VPN
tracking and portfolio management for mobile workers / 91. Corporate portal - aggregation and design of mobile business
executives portals


additional 132 applications with the Global Telecommunications Practice (cont’d)
92. Mobile video-conferencing 104. Parking machines - sending of status information (enough
93. Mobile video-telephony paper, needs to be emptied, no change available) and damage
94. Speech based portal control 105. Household appliances (washing machines, refrigerators) -
sending of status (e.g.fill, temperature) and damage (first
95. Emergency "life" data monitoring / patient management -
information for service staff)
mobile health devices for patients send health information to
hospital / emergency server 106. Surveillance of remote industrial sites (e.g. waterworks) by
video, "motion detector" alert
96. Telediagnosis - status report of vehicles to "operating
company": inspection data, freight status (temperature, amount 107. Monitoring of household installations, e.g. oil tanks (fill level),
of goods loaded), driver specific data (e.g. hard breaking, heating
exceeding defined speeding limits) 108. Monitoring of remote industrial installations (status of mobile
97. Monitoring mobile vessels in process industry, e.g. Pressure in vessels, water levels of barrages)
vessel, temperature, empty/full etc) 109. Monitoring of infrastructure network elements (gas/ water
98. Maintenance of car park / remote vehicles - theft/damage pipelines, energy / telephone network base-stations&servers)
protection via mobile device ("moving alert") for functionality, leaks etc.
99. Monitoring of containers/ equipment: (Video-) Surveillance to 110. Monitoring of sensors for foggy/icy road or local weather
protect against theft, fire and other damage e.g. on construction conditions for public administration, airports, railway, city
sites, remote warehouses administration, weather stations
100. Monitoring of freight status ("presence"-signal for quantity, 111. Monitoring of remote shelters, e.g. food supply levels for
other for temperature, damage) animals
101. Surveillance of elevators for immediate repair 112. Security service for remote houses, sites, machines (against
burglary, damage, theft, fire...) via video, "motion detector"
102. Metering Machines surveillance - sending actual counter
alert, heat alert etc.
reading
113. Steering of network elements (e.g. valves for gas / water
103. Vending machines - information of status (fill level / damage)
pipelines


114. Steering of remote machines on industrial sites ("manual" 126. Retail surveillance - localization of pallet frames, goods,
temperature regulation etc.) containers in warehouses, on large storage areas (harbors, railway
115. Steering of sites (open/close doors, switch on lights, alarms stations, company sites) for monitoring and tracking
etc.) 127. Delivery tracking - localization of pallet frames, valuable goods
116. Steering of household appliances and installations (coffee in the delivery process for transport industry
machine, oven, heating, etc.) 128. Emergency tracking - Localization of persons in emergencies
117. Remote dosing of drugs (medical trials) (triggered manually or automatically, e.g. by critical health data)
118. Automatic stop of cars for stolen cars / cars leaving a 129. "Mobile handcuffs" - localization of persons under house arrest
predefined area for security agencies, insurance applications 130. Optimal dispatch - Navigation of couriers or trucks of transport
etc. companies / Post with spare space to pick up new freight on its
119. Tracking of (valuable) goods, pallet frames or containers in way or due to traffic information
warehouses, supermarkets 131. Routing of ambulances and police cars to emergencies and
120. Tracking of goods in delivery process, e.g. for transport accidents
industry, couriers, post 132. Routing of money transports according to traffic / security
121. Localization of construction workers, cleaning personnel; information
journalists, other field forces 133. Navigation of security staff to emergencies according to floor
122. Tracking of valuable animals plans, site maps etc.
123. Theft protection - Localization of trucks, taxis, buses, rental 134. Navigation of field forces (engineers, maintenance staff) to
cars in certain areas in case of theft locations of broken network elements, broken household
appliances etc.)
124. Localization of trucks, taxis, buses, rental cars, in certain areas
for regular monitoring of car park 135. Access to patient records for doctors, nurses in hospitals, family
doctors
125. Localization of taxis, rental cars in certain areas for optimal
allocation 136. Mobile diagnostics tools for patients that consider their health
data


137. On-line ordering of new supplies on PDA for Doctors & nurses 150. Mobile channel for medical information platform on latest
138. Electronic prescriptions for doctors medication, disease information etc. (passive detailing of
doctors)
139. Mobile support for Land-surveyers (download of special
information maps) 151. Remote information's of salesmen on incoming requests
140. Mobile support for insurance agents to record accidents / 152. Sending of traffic wardens to parking machines with expired
damage; get comparable data / other tools that help assess time / broken / needed to be emptied
damages 153. Remote information's of harbor workers of incoming ships /
141. Access for architect / ingenious to computer based construction containers to be emptied or loaded
plans when they are on the site and need to verify, check, 154. Dispatch of cleaning personnel on new jobs to optimize time
control, report progress, damages, general status 155. Dispatch of police / security staff to burglaries / accidents /
142. Mobile recording / processing of guest orders (tables, bill..) for emergencies
waiters in restaurants, hotels, bars... 156. Dispatch of doctors/ ambulance staff to accidents / emergencies
143. Mobile channel to auctioning platforms (marketplaces) to check 157. Direction of engineers to network failure sites
prices, auction online etc.
158. Direction of maintenance field force to broken household
144. Medical card - access to patients medical records (X-rays, heath appliances / household accidents (flooding, etc.)
files)
159. m-engineering (mobile guide to find hidden installations)
145. Mobile educational trainings (e.g. at open universities) or mobile
160. Vending machines mobile payment
access to lectures / support material
161. Taxi services mobile payment
146. Log-in to surveillance systems for security staff / police on patrol
162. Parking machines mobile payment
147. Mobile educational trainings (e.g. At open universities)
163. Ticketing machines mobile payment
148. Shared product information's for research teams of different
companies 164. Mobile signature for traveling executives
149. Mobile channel for project coordination of all kind (construction, 165. Transaction intensification for banking / brokerage solutions
R&D, academic research) 166. Electronic prescriptions of doctors


167. Mobile payment for ordinary purchases in shops, supermarkets 180. Interactive TV - Mobile phones as "remote controls" for
etc interactive TV series and quiz shows
168. Payment of parking machines 181. Localization of customers in close distance of shop - sending of
169. Payment at ticketing machines, e.g for bus, rail or cinema customized advertising
tickets 182. Localization of passengers in close distance to airport and
170. Mobile signature for traveling executives that need to sign of notification of delayed planes and check-in possibility
documents while traveling 183. Customer satisfaction analysis for hotel, airline, rail, travel etc.
171. M-prescriptions of medication by doctors industries
172. Transaction verification for brokerage, other financial 184. Market research for special customer groups (location
transactions dependent)
173. Payment for drinks, cigarettes etc in vending machines 185. Mail arrived notification - Information of arriving deliveries,
possibility for customers to confirm presence at home to
174. Mobile payment in face-to-face transactions, e.g. taxi services,
announced time or set new time
cafes, restaurants
186. Mail arrived notification - information of arrived deliveries,
175. Market research - mobile customers reply with SMS/otherwise
eventually possibility for customers to drop by and receive
to surveys
delivery
176. Vote in elections or on other plebiscites
187. Passenger notification of changes in schedules, delays etc.
177. Tourist information services: Chose additional information on
188. Mobile advertising on mobile phones
touristy places
189. Mobile advertising on mobile / remote screens (e.g. in hotels,
178. Vote in opinion polls in the areas of media and entertainment,
conference centers, on buses, skyscrapers) and advertising
game shows, on advertised products etc.
spaces
179. Reactive advertising - mobile customers can access/request
190. Mobile advertising on moving screens (e.g. on buses, taxis) with
more specific product information via SMS/short number when
ads adapted to location of screen / vehicle
they see certain advertisements
This is to our knowledge the most exhaustive list of potential enterprise
applications
Operators in international markets have already launched several of these

applications
Internet, File
Agenda/ Intra- Productivity
Operator E-Mail Inform- Down- MVPN
contacts net applications
ation load
Sales force automation,
Orange     Credit rating, Payment 
Multicast
Switzerland
Diax    ERP access
Telefonica
T-Mobile     Various 
(see later)
Germany Vodafone    Various 
(see later)
mmO2   
mmO2   
UK
Vodafone     
France Orange  Various

(see appendix)
TIM    
Omnitel  
Italy
Wind    
Blue 
Source: A.T. Kearney Analysis 3 - 21

Operators in international markets have already launched several of these

applications (cont’d)
Internet, File
Agenda/ Intra- Productivity
Operator E-Mail Inform- Down- MVPN
contacts net applications
ation load
Airtel  
Spain Ameny 
Movistar      SAP / Meta4
mobilkom   
maxmobil   
Austria
telering   
Globalone 
Nether- Libertel    
lands
Belgium Mobistar     
Optimus    Customized 
applications
Portugal Vodafone  
TMN   

Vodaphone in Germany provides advanced mobile solutions

Example Operator
Vodafone Germany: Business solution offering
 Wireless PBX
 Field force dispatching
 Sales force automation
 Fleet management / monitoring
for parcel services / money-
transports/ Car Sharing
 Remote monitoring of on-site
equipment
 Monitoring of construction or
other equipment / security
against theft
 Monitoring/controlling of
utility-installations and mobile
networks
Most solutions are SMS/MMS based leveraging location based data

T-Mobile in Germany offers tailored enterprise solutions

Example Operator
T-Mobile Germany: Business solution offering
 WAP e-mail
 Mobile IP VPN
 WAP Intranet access
 Localization information on
digital maps
 Fleet management solution
 Monitoring of vehicle data
 Monitoring and control of
equipment status for service-
and quality enhancement
Offer solutions projects on request, leveraging existing enabler and partner networks

Orange’s Mobile Internet for Business (MIB) comprises horizontal and vertical
solutions
Example Operator
Description of MIB offer
Description Examples of tailor-made applications
End-user Air Liquide (chemical industry)

• Choice of devices • Transmission of alarms to maintenance
• Tailor-made mobile applications technical team and real-time consultation
for wap/PDA of database on wap phone for technicians
Services • Internal firm information BDDP (communication agency)
provided • Thematic content (news…) • E-mail and internal directory on wap
• Internet access (wap/web) phone for sales and VIPs
Comptoir des Entrepreneurs (banking)
Administrator Name, First Name
• Real-time consultation of customer My company
• User management and profiling My job

My travels
database on wap phone for customer care WAP Internet
tool on web
department to prepare meetings
Choose Return
Port autonome du Havre (marine

• Multi-network usage transport)
• Multi-device platform • Consultation of ship arrival/departure
• Secure access to the Intranet time, loading/unloading time and
Solutions technical characteristics of ships on
• Integration into company IS
provided Intranet database with PDA for harbour
• Hosting of applications
workers
• Restricted access to Internet
wap/web sites

mmO2 in UK focuses on Mobile Office rather than industry-specific solutions
mmO2 in UK: Business solution offering
 Mobile Office
• Mobile Intranet
solution
• Wireless e-mail
• Text messaging
• Traffic reports
• Timetable / alert

mmO2 in Germany has reference solution projects based on its WAP-Portal,

SMS, and increasingly MMS
mmO2 in Germany: Business solution offering
 Wireless PABX
 Mobile Banking
 SMS based Dispatching

(without location
functionality)

Second, we grouped applications based on similarities and key strategic impact

offerings
applications
Four categories of solutions emerge that have distinct strategic focus
Overall Nature of Solutions Key Strategic Impact Rationale
B2B2E Extend current ‘voice

(“Business to Business to Retain existing customer base contracts’ and lock-in
Employees”) employees
B2B2P Enterprise customers can

(“Business to Business to Extend customer base ‘roll-out’ to own network of
Partners”) partners (e.g. suppliers)
Create new communications

M2M needs, for example in
(“Machine to Machine”) Develop new sources of revenues improving operations
efficiency
B2B2C
Create high-visibility with
(“Business to Business to
Build brand image end-users
Consumers”)
3 - 29
All 190 applications can be allocated to seven horizontal solutions categories and
six vertical solutions categories
Horizontal Solutions Categories Vertical Solutions Categories
“Standardized solutions that can be commercialized across “Solutions that require tailoring to specific industries, typically
industries for Type A, B and C customers” for Type A (and selectively for type B) customers”
Generic #Generic
Solutions* Applications* Generic Solutions*
• Voice 3 • Monitoring of Remote Mobile Devices
Wireless Voice •
• Value-Added Services 8 Monitoring & Control Monitoring of Remote Fixed Devices
Communications • Enterprise Voice Services 2 • Control of Remote Mobile Devices
• Control of Remote Fixed Devices
• Messaging 5
Wireless Data 3
• Info Access/Broadcast • Locating and Navigating People
Communications 5 Tracking & Tracing • Locating and Navigating Vehicles
• Database Access
• Locating and Navigating Goods
Fixed-Wireless Voice • VoIP 2
Communications • PBX 1 Vertical Business/ • Access to Corporate Specific Systems
Corporate Systems • Access to Extranet
Fixed-Wireless Data 7
• MVPN
Communications • Field Force Planning Dispatch
Mobile Workforce • Fleet Mgmt.
• Local Calls 1
• VoIP 1 Management • Sales Force Mgmt.
Fixed Voice
Communications • Leased lines 1 • M Ticketing
• VAS based on leased lines 2 • SMS billings, forms and payments
• Normal Internet Access 2 Payment & Transaction • Credit Card Payment at Mobile Terminal
Fixed Data • M-banking
• Leased-line Internet Access 1
Communications • Other Services • M-brokerage
2
• Digital Signature/Encryption
• Infrastructure 2
• Systems Integration • Basic Ads
Others 1 Advertising & Polling •
• SIM Cards Location Based Ads. Coupons
2 • Market Surveys, Polling
• Terminals 1
20 Generic 52 Generic 21 Generic Large depends on
Total Total
Solutions Applications Solutions tailoring**
Note: * Regrouping of applications into generic categories for the purpose of modeling
** The 21 generic solutions will all be tailored to specific industry or customer requirements 3 - 30
The team identified fifty-two generic horizontal applications

7 Horizontal Solutions
Categories 20 Generic Solutions 52 Generic Applications
• Voice • Local
• Long Distance
• Roaming
Wireless Voice • Value-Added Services • Free Pagers • Calling/Receiving Party Pays

• Call Waiting • Call Conferences
Communications • Call Reminding • Caller ID
• Voice Mails • Call Transfer
• Enterprise Voice Services • VPMN
• Call Center
• SMS Communication
• Wireless Messaging • MMS Communication
• Video Communication
• Instant Messaging
Wireless Data • Video Conferences
Communications • Wireless Info. Access/ • General Information Via Internet (Pull)

• Push Services of Publicly Available. Data (Data Broadcasting)
Broadcast • Push Services of LBS Data (traffic guide, city tour guide, etc.)
• Wireless Database Access • Access to CRM Systems

• Access to SCM Systems (Logistics)
• Access to Reporting Systems
• Access to ERP Systems
• Access to Groupware
• VoIP • Mobile VoIP

• Fixed VoIP
Fixed-Wireless Voice
Communications
• PBX • Wireless-Fixed PBX

The team identified fifty-two generic horizontal applications (cont’d)

7 Horizontal Solutions
Categories 20 Generic Solutions 52 Generic Applications
• MVPN • Intranet Access

• Corporate Email
Fixed-Wireless Data • Mobile Office Assistant
Communications • MS Office Suite Access/Use
• Integrated VPMN
• Personal Information Management
• Unified Messaging
• Local Calls • Fixed Line Local Calls
Fixed Voice • VoIP • Fixed VoIP
Communications • Leased Lines • Leased Lines
• VAS Based on Leased Lines • Enterprise Internal Phone Network

• Fixed PBX
• Nomal Internet Access • Dial-up, ISDN, ADSL

• DDN, SDH, ATM, Frame Relay
Fixed Data • Leased-lines Internet Access • Leased line Internet Access
Communications
• VAS Based on Leased Lines • Internet Data Center
• Enterprise VPN
• Infrastructure • Intranet
• W-LAN
• Systems Integration • System Integration

Others
• STK Cards
• SIM Cards • SIM Card Groups
• Terminals • Carrier Branded Special Terminals

Most horizontal solutions/applications belong to the B2B2E category and

therefore help retain the existing customer base; some also belong to the B2B2P
category and therefore help expand the customer base
Horizontal Solutions
Categories B2B2E B2B2P M2M B2B2C
Wireless Voice
Communications
Wireless Data
Communications
Fixed Wireless Voice

Communications
Fixed Wireless Data

Communications
Fixed Voice
Communications
Fixed Data
Communications
Others

The team identified twenty-one generic vertical applications
6 Vertical Solutions Categories 21 Generic Solutions
• Monitoring of Remote Mobile Devices

Monitoring & Control • Monitoring of Remote Fixed Devices
• Control of Remote Mobile Devices
• Locating and Navigating People

Tracking and Tracing • Locating and Navigating Vehicles
Vertical Business/Corporate • Access to Industry Systems

• Access to Extranet
Systems
Mobile Workforce • Field Force Planning, Dispatch

• Fleet Management
Management • Sales Force Management
• M-Ticketing
Payment & Transaction • SMS Billing, Forms and Payments
• Credit Card Payment at Mobile Terminal
• M-Banking
• M-Brokerage
• Basic Ads
Advertising & Polling • Location Based Ads, Coupons
• Market Surveys, Polling

Vertical solutions are of all four natures and therefore contribute to achieving all
four strategic objectives
Vertical Solutions Categories B2B2E B2B2P M2M B2B2C
Monitoring & Control
Tracking & Tracing
Vertical Business/
Corporate Systems
Mobile Workforce
Management
Payment &
Transaction*
Advertising & Polling
Note: Some solutions are split amongst different categories 3 - 35

Horizontal applications will dominate Zhejiang’s telecommunications market in

the short-term
Horizontal Applications: Vertical Applications:
Revenue and Strategic Impact Strategic Impact
Revenue in RMB Billion
2007 12.8 2007 0.1
Wireless Voice Monitoring &
Communications 2003 9.7 Control 2003 0
2007 1.4 2007 0.2

Wireless Data
Tracking & Tracing
Communications 2003 0.6 2003 0.01
2007 0.7 2007 0.2

Fixed Wireless Voice Vertical Business/
Communications 2003 0.2 Corporate Systems 2003 0.002
2007 1.2 2007 0.3

Fixed Wireless Data Pure fixed line Mobile Workforce
Communications 2003 0.03 market Management 2003 0.05
2007 1.9 2007 0.5

Fixed Voice Payment &
Communications 2003 1.4 Transaction 2003 0.05
2007 1.8 2007 0.2

Fixed Data Advertising & Polling
Communications 2003 1.3 2003 0.003
2007 1.2 Not taking into account potential

Others Licensing/upgrading fees
2003 0.2
Source: ZMCC; FAMS database, market surveys, A.T. Kearney analysis 3 - 36

As the third step, we prioritized solutions based on market attractiveness and

strategic benefits

offerings
applications
The market attractiveness of each solution is based on a qualitative assessment of

expected users, traffic, and potential for mobile carriers to share revenues
Criteria 1 2 3 4 5
Expected number No/few mobile <25% of mobile 25%-50% of mobile 50%-75% of mobile >75% of mobile
of users based on workers, low pricing, workers, low workers, medium workers, medium workers, high
experience, focus limited growth pricing, limited pricing, pricing, pricing, significant
group and growth medium growth significant growth growth
interviews
Expected No/very little traffic Low level of traffic Medium level of Reasonably high Frequent usage and
traffic/monthly fee expected traffic level of traffic very high traffic
based on
estimation
Potential for Most/all revenue will Mobile carriers can Revenue will be Mobile carriers can Most/all revenue
mobile carriers to be dominated by only share a small split between mobile share significant will be dominated
share revenue system integrators or portion of the carriers and other portion of the by mobile carriers
fixed-line carriers revenue players revenue
Source: A.T. Kearney Analysis, ZMCC 3 - 38

The strategic benefits of each solutions are based on the retention/extension

potential and image building potential
Criteria 1 2 3 4 5
Retention and Solution adds low value, Solution is considered as "must Solution adds significant
extension potential including convenience, have” by employees tangible value to employees
* reliability and price benefit to Solution creates some network Solution creates significant
(80% of weighting) employees using mobile effect as employees will see network effect as employees not
phones, comparing to some benefit in using the same using the same carrier as the
competitors’ offerings carrier as the enterprise or his enterprise or his peer group will
Little network effect as solution peer group, or have significant inconvenience
Intermediate scoring
Intermediate scoring
brings low benefit to employees Can be part of a part of “one in work
who use the same carrier as the stop shopping” concept Important component of “one
enterprise or his peer group stop shopping” concept
Not related to “one stop
shopping” concept
Image building Solution is not considered as Medium impact as strong Solution is considered as truly
potential differentiating competing brand/solution is innovative
(20% of weighting) Solution is not “visible” in the already established Solution is highly visible in the
mass market Solutions is visible in the mass mass market
market
Note: * Retention and extension potential is mainly assessing the potential effect of new services on the main
revenue source - voice revenue through retaining existing customers or acquiring new customers
Source: A.T. Kearney Analysis, ZMCC 3 - 39
The prioritization of each solutions is assessed taking into account both market
attractiveness and strategic benefits Market Attractiveness Strategic Benefits
Horizontal Solutions Categories Vertical Solutions Categories
Generic Solutions Total Priority Score Generic Solutions Total Priority Score
5 5
• Voice • Monitoring of Remote Mobile 2 1
Wireless Voice 2 1 Monitoring & Control Devices
• Value-Added Services 2 1
Communications • Enterprise Voice Services • Monitoring of Remote Fixed
4 3 Devices 3 2
• Control of Remote Mobile Devices
4 2 2 1
Wireless Data • Messaging
3 2
Communications • Info Access/Broadcast 3 4
• Database Access 3 3 • Locating and Navigating People
3 2 Tracking & Tracing • Locating and Navigating Vehicles 3 3
Fixed-Wireless Voice • VoIP 2 2
3 2
Communications • PBX 3 3
• Access to Corporate Specific
4 4 Vertical Business/ Systems 3 4
Corporate Systems • Access to Extranet
Fixed-Wireless Data • MVPN
Communications 3 4
• Field Force Planning Dispatch
Mobile Workforce • Fleet Mgmt. 3 3
5 2
Management • Sales Force Mgmt.
• Local Calls 3 2 3 4
Fixed Voice • VoIP
Communications • Leased lines 4 2
3 3
• M Ticketing
• VAS based on leased lines 3 2
Payment & Transaction • SMS billings, forms and payments 4 3
3 2 • Credit Card Payment at Mobile 2 2
Fixed Data • Normal Internet Access Terminal 3 3
4 2
Communications • Leased-line Internet Access • M-banking
• Other Services 3 1 • M-brokerage 3 3
2
• Infrastructure 5 3 3
• Systems Integration 3 3 • Basic Ads 3 2
Others Advertising & Polling
• SIM Cards 4 4 • Location Based Ads. Coupons 3 3
• Terminals 2 5
• Market Surveys, Polling 3 3

Market attractiveness and strategic benefits are evaluated for each individual
applications
Market
Strategic Benefits
Attractiveness
Total Priority Score
B2B2E Generic Applications B2B2P Generic Applications
Acces s to Gro up ware
Lo cal
Co rp o rate Email Acces s to Rep o rting
Field Fo rce Planning , Dis p atch Acces s to ERP
Carrier Brand ed Sp ecial Terminals

Acces s to CRM
Acces s to Invento ry Sys tems
Acces s to Invento ry
Lo catio n Bas ed Ad s , Co up o ns
M -Banking
Lo cating and Navig ating Vehicles

B2B2C Generic Applications
Leas ed Lines
Wireles s -Fixed PBX M -ticketing
Bas ic M o b ile Ad s
Bas ic M o b ile Ad s
DDN, ATM , SDH, Frame Relay
Lo catio n Bas ed Ad s
Fixed Vo IP
Dig ital s ig nature/encryp tio n
Acces s General Info Via Internet
Caller ID SM S b illing , fo rms and p ayments
Lo cating and Navig ating Go o d s
VPN M2M Generic Applications

Acces s to Gro up ware Co ntro l o f remo te fixed d evices
Vid eo Co nferences Co ntro l o f remo te mo b ile d evices
Call Co nferences M o nito ring o f remo te mo b ile d evices
M o nito ring o f Remo te M o b ile Devices Lo cating navig ating g o o d s
Ins tant M es s ag ing M o nito ring o f remo te fixed d evices
Vo ice M ails Lo cating navig ating vehicle
Call Waiting Lo cating navig ating p eo p le

Priority scores highlighted the most important applications and target industries
based on market attractiveness and strategic benefits
Market
Strategic Benefits
Attractiveness
Priority Applications Priority Industries

First tier - priority score 9 or 10
• Voice Local Top 500
• Voice Long Distance
• Voice Roaming Bank & Insurance
Manufacture – Hi-tech
Second tier - priority score 7 or 8
• System Integration • Locating and Navigating People
Retail & Trade
• Unified Messaging • Carrier Branded Special Terminals
• Corporate Email • Fixed Local Calls Police
• SMS Billing, Forms and Payment • Personal Information Management
• Sales Force Management • Access to Inventory Systems Media
• Field Force Planning, Dispatch • Access to CRM Systems
• Access to Extranet • VPMN Securities
Third tier - priority score 5 or 6 Transportation

• Location Based Ads, Coupons • Market Survey, Polling
• Digital Signature/Encryption • Basic Mobile Ads Utilities
• M-Brokerage • Monitoring of Remote Fixed Devices
Custom Office
• M-Banking • W-LAN
• Fleet Management • DDN, ATM, SDH, Frame Relay Education
• Access to Industry Systems • Fixed PBX
• Locating and Navigating Vehicles • Mobile Office Assistant Hotel
• SIM Card Groups • Fixed VoIP
• Fixed Internet Access • Mobile VoIP Travel Agency
• Leased Lines • Access to Reporting Systems
• Integrated Systems • Access to General Info Via Internet Tax Bureau
• Intranet Access • MMS
• Wireless-Fixed PBX • SMS Others
• Access to ERP Systems • Caller ID
Source: A.T. Kearney Analysis, Focus group and interviews, ZMCC 3 - 42

3. Product Strategy
Detailed Assessment by Industry
• Market attractiveness of horizontal

solutions/applications
• Strategic benefits of horizontal

• Market attractiveness of vertical

• Strategic benefit of vertical

3 - 43
Market attractiveness of horizontal solutions (1/2)
Solutions Summary
Aggregate Score
Top 500
Manufacturing - Hi-tech
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Generic Solutions
Category
• Voice 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
Wireless Voice • Value-Added Services 2 2 2 2 1 2 2 2 1 1 2 2 2 2 2 1
Communications • Enterprise Voice
4 4 4 3 3 4 4 3 3 3 4 4 4 4 3 3
Services
• Wireless Messaging 4 3 4 4 3 4 3 4 2 5 4 4 3 3 2 2
Wireless Data • Wireless Info. Access/
3 3 4 4 4 4 4 3 2 1 4 4 2 3 2 2
Communications Broadcast
• Wireless Database
3 4 4 3 4 5 3 3 2 1 2 2 2 2 2 2
Access
Fixed-Wireless Voice • VoIP 3 4 3 4 3 3 2 4 2 3 4 2 2 2 3 3

Communications • PBX 3 4 3 2 3 4 3 2 3 1 3 3 3 3 3 2
Fixed-Wireless Data • MVPN 4 4 4 2 3 4 4 3 2 2 3 4 3 3 2 2
Communications

Market attractiveness of horizontal solutions (2/2)
Solutions Summary
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal
Generic Solutions
Solutions Category
• Local Calls 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
• VoIP 3 3 3 2 2 3 2 3 2 3 3 3 3 3 2 2
Fixed Voice
Communications • Leased Lines 4 5 3 1 2 5 4 2 5 5 4 4 4 4 4 2
• VAS Based on Leased
3 3 2 1 3 3 3 1 3 3 2 3 2 2 2 2
Lines
• Normal Internet Access 3 3 4 3 4 2 2 3 3 3 2 3 3 3 3 3
Fixed Data • Leased-lines Internet
Communications 4 4 4 2 4 5 4 3 5 5 2 3 3 3 1 3
Access
• Other services 3 2 2 3 3 2 2 2 1 2 2 3 3 3 1 2
• Infrastructure 3 3 4 1 3 4 3 1 5 3 4 3 3 3 2 2
• Systems Integration 4 4 3 2 2 4 4 2 2 3 4 3 4 4 3 2
Others
• SIM Cards 3 3 2 3 2 2 2 3 1 3 1 3 3 3 2 3
• Terminals 2 2 2 3 2 2 2 2 2 2 2 3 2 2 2 2

Market attractiveness of horizontal applications (1/5)
Applications Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal
Solutions Generic
Generic Applications
Category Solutions
• Local 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
• Voice • Long Distance 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
• Roaming 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
• Free Pagers 2 2 1 3 3 1 1 3 1 2 3 2 1 1 2 1
• Call Waiting 1 2 3 1 1 2 2 2 1 1 2 1 1 1 1 1
• Call Reminding 2 3 3 2 2 2 2 3 1 1 2 3 3 3 3 2
Wireless Voice
• Value-Added • Voice Mails 2 2 2 2 1 3 3 2 2 1 3 2 1 1 1 1
Communications
Services • Calling Party Pays 2 1 1 1 1 2 2 3 2 1 2 3 3 3 1 1
• Call Conferences 2 3 3 1 2 3 2 1 1 1 3 2 2 2 1 1
• Caller ID 4 4 4 4 4 4 4 4 4 3 4 4 4 4 4 4
• Call Transfer 3 3 3 3 3 3 3 3 3 1 3 3 3 3 3 3
• Enterprise • VPMN 4 4 4 3 3 4 3 3 3 4 4 4 4 4 3 3
Voice Services • Call Center 2 2 1 3 3 3 3 2 1 1 1 2 1 1 1 1

Applications Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agency
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal Generic
Solutions Solutions Generic Applications
Category
• SMS 4 4 4 5 3 5 3 5 3 5 5 5 4 4 3 3
• MMS 4 4 4 4 3 4 4 4 2 4 5 5 3 3 3 2
• Wireless • Video Communications 2 2 2 1 1 3 3 3 1 1 4 3 1 1 1 1
Messaging
• Instant Messaging 1 1 1 2 1 2 3 2 1 1 3 1 1 1 1 1
• Video Conferences 2 3 3 1 1 3 3 1 1 2 4 2 2 2 1 1
• Access to General Info.
Wireless Data Via Internet (Pull) 3 3 4 3 3 4 4 3 2 1 4 4 2 3 2 2
• Wireless
Communica- Info.
tions
• Broadcast of Publicly
Access/ Avail. Data (Push) 2 2 2 2 3 2 4 2 2 2 3 3 2 2 1 1
Broadcast
• Broadcast of LBS Data 2 2 1 4 4 1 1 4 2 1 3 3 1 3 1 1
• Access to CRM Systems 4 4 4 3 4 5 3 3 3 1 1 1 1 1 1 3
• Access to Inventory
Systems 4 4 3 4 5 1 1 3 2 1 1 1 1 1 3 3
• Wireless
Database • Access to Reporting
Systems 3 3 3 2 3 3 3 2 1 1 2 3 3 3 2 2
Access
• Access to ERP Systems 3 4 4 3 3 4 3 2 2 1 3 1 1 1 3 2
Applications Levels
Aggregate Score
Top 500
tech
Manufacturing - Hi-
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal Generic
Solutions Generic Applications
Category Solutions
• Mobile VoIP 3 4 3 4 3 3 2 4 2 3 4 2 2 2 3 3
Fixed-Wireless • VoIP
Voice • Fixed VoIP 3 4 3 2 3 3 2 3 3 3 3 3 3 3 3 3
Communications • PBX • Wireless-Fixed PBX 3 4 3 2 3 4 3 2 3 1 3 3 3 3 3 2
• Intranet Access 3 3 4 2 3 3 3 1 1 2 3 3 3 3 1 1
• Corporate Email 4 4 4 2 3 4 4 3 2 2 3 4 3 3 2 2
• Mobile Office Assistant 2 3 3 2 2 3 2 1 1 1 3 3 2 2 1 1
Fixed-Wireless • MS Office Suite
• MVPN 2 2 3 1 2 3 2 2 1 2 2 2 2 2 1 1
Data Access/Use
Communications • Integrated VPMN 3 3 3 2 3 3 3 3 1 1 1 2 2 2 1 1
• Personal Information
3 4 4 2 2 4 4 3 1 2 4 4 3 3 2 2
Management
• Unified Messaging 4 4 4 2 3 4 3 2 2 2 4 2 2 2 2 2

Applications Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal
Solutions Generic
Category Solutions
• Local Calls • Local Calls 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5

• VoIP • Fixed VoIP 3 3 3 2 2 3 2 3 2 3 3 3 3 3 2 2
Fixed Voice • Leased Lines • Leased Lines 4 5 3 2 2 5 4 2 5 5 4 4 4 4 4 2
Communications
• VAS Based on • Enterprise Internal
2 3 2 2 2 3 2 1 2 1 2 2 2 2 2 2
Leased Lines Phone Network
• Fixed PBX 3 3 2 1 3 3 3 1 3 3 2 3 2 2 2 2
• Dial-up, ISDN, ADSL 3 2 4 3 3 2 3 2 3 3 2 3 3 3 1 2
• Normal
Internet Access • DDN ， ATM ， SD
3 3 3 1 4 2 2 3 1 3 2 3 3 3 3 3
H, Frame Relay
Fixed Data
Communications • Leased-lines • Leased-line Internet
4 4 4 2 4 5 4 3 5 5 2 3 3 3 1 3
Internet Access Access
• Internet Data Center 2 1 1 3 3 1 1 2 1 1 1 3 3 3 1 2
• Other services
• VPN 3 3 3 1 2 3 3 2 1 3 3 3 2 2 2 2

Applications Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal
Solutions Generic Solutions Generic Applications
Category
• Intranet 2 3 4 1 3 4 3 1 3 4 4 3 3 3 2 1
• Infrastructure (1)
• W-LAN 3 3 3 1 3 3 3 1 5 3 4 3 3 3 2 2
• Systems • System Integration 4 4 3 2 2 4 4 2 2 3 4 3 4 4 3 2
Integration(2)
Others
• STK Cards 2 3 2 2 2 2 3 3 1 1 1 3 1 3 1 1
• SIM Cards
• SIM Card Group 3 3 2 3 2 2 2 3 1 3 3 3 3 3 2 3
• Carrier branded
• Terminals 2 2 2 3 2 2 2 2 2 2 2 3 2 2 2 2
special terminals
Note: (1) Currently ZMCC mainly install the infrastructure free for key clients. Enterprise internal infrastructure is
standardized products and companies prefer to install by themselves if ZMCC cannot offer free installation.
(2) ZMCC does not have the capacity to do system integration. Instead, this will be done through
partnership/outsourcing with application providers and IT service companies.
3. Product Strategy




3 - 51
Strategic benefits of horizontal solutions (1/2)

Solutions Summary
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Generic Solutions
Category
• Voice NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA
• Value-Added
Wireless Voice 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Services
Communications
• Enterprise Voice
3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Services
• Wireless Messaging 2 2 2 2 1 2 2 2 1 1 3 2 2 2 1 1
Wireless Data • Wireless Internet
2 2 1 3 2 2 2 3 1 1 3 2 2 2 1 1
Communications Access
• Wireless Database
3 4 4 2 3 3 3 2 2 1 2 2 2 2 1 2
Access
Fixed-Wireless Voice • VoIP 2 2 1 2 2 2 2 2 2 2 2 2 2 2 2 2

Communications • PBX 2 2 3 1 2 3 3 1 4 1 1 3 3 3 1 1
Fixed-Wireless Data • MVPN 4 4 4 2 3 4 3 2 2 2 3 4 3 3 1 2
Communications

Strategic benefits of horizontal solutions (2/2)

Solutions Summary
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal
Generic Solutions
Solutions Category
• Local Calls 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Fixed Voice • Fixed VoIP 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

Communications • Leased Lines 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
• VAS Based on Leased
2 2 2 1 2 2 2 1 2 2 2 2 2 2 2 2
Lines
• Normal Internet Access 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Fixed Data • Leased-lines Internet
Communications 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 2
Access
• Other Services 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Infrastructure 2 2 2 1 2 2 2 1 2 2 2 2 2 2 2 2
• Systems Integration 4 4 4 3 3 4 3 2 2 3 3 3 3 3 3 2
Others
• SIM Cards 3 3 3 3 3 3 3 3 1 3 3 3 3 3 3 3
• Terminals 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
Strategic benefits of horizontal applications (1/5)
Applications Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal
Solutions Generic
Category Solutions
• Local NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA
• Voice • Long Distance NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA
• Roaming NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA
• Free Pagers 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Call Waiting 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Call Reminding 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Wireless Voice
• Value-Added • Voice Mails 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Communications
Services • Calling Party Pays 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Call Conferences 2 2 1 2 2 2 2 1 1 2 2 2 2 2 1 1
• Caller ID 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Call Transfer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Enterprise • VPMN 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Voice Services • Call Center 2 1 2 2 2 2 2 2 1 1 1 2 1 1 1 1

Applications Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal Generic
Solutions Solutions Generic Applications
Category
• SMS (point to point) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

• MMS 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Wireless • Video Communications 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Messaging
• Instant Messaging 2 1 1 2 1 2 2 2 1 1 2 1 1 1 1 1
• Video Conferences 2 2 2 1 1 2 2 1 1 1 3 2 2 2 1 1
• Access General Information
2 2 2 1 1 2 2 1 1 1 3 2 2 2 1 1
Wireless Data • Wireless Via Internet (Pull)
Communications Info. • Broadcast of Public Data
Access/ 2 2 1 3 2 2 2 3 1 1 2 2 2 2 1 1
(Push) (e.g. group SMS)
Broadcast
• Broadcast of LBS Data 2 2 1 3 3 1 1 3 1 1 2 2 1 2 1 1
• Access to CRM Systems 3 4 4 2 3 3 3 2 2 1 1 1 1 1 1 2
• Access to Inventory Systems 3 4 3 4 4 1 1 2 1 1 1 1 1 1 3 1
• Wireless • Access to Reporting
Database 2 2 2 2 2 2 2 2 1 1 2 2 2 2 2 2
Systems
Access
A.T. Kearney Analysis, FocusAccess to interviews,
ERP Systems 3 3 3 3 2 3 3 2 2 2 3 1 1 1 3 33 - 55
•
Source: group and ZMCC
Applications Levels
Aggregate Score
Top 500
tech
Manufacturing - Hi-
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal Generic
Solutions Generic Applications
Category Solutions
• Mobile VoIP 2 2 2 2 2 2 2 2 1 2 2 1 1 1 2 2
Fixed-Wireless • VoIP
• Fixed VoIP 2 2 1 2 2 2 2 2 2 2 2 2 2 2 2 2
Voice
Communications • PBX • Wireless-Fixed PBX 3 4 3 2 3 4 3 2 3 2 3 3 3 3 3 2
• Intranet Access 3 3 3 2 3 3 3 1 1 3 3 3 3 3 1 1
• Corporate Email 4 4 4 2 3 4 4 3 2 3 3 4 3 3 1 2
• Mobile Office Assistant 3 3 3 2 2 3 3 1 1 2 3 3 2 2 1 1
Fixed-Wireless • MS Office Suite
• MVPN 2 2 2 1 2 3 2 2 1 2 3 2 2 2 1 1
Data Access/Use
Communications • Integrated VPMN 3 3 3 2 3 4 3 3 1 2 1 2 2 2 1 1
• Personal Information
4 4 4 2 2 4 4 3 1 2 4 4 3 3 3 3
Management
• Unified Messaging 4 4 4 2 3 4 3 3 2 2 4 3 3 3 3 3

Applications Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal
Solutions
Generic Solutions Generic Applications
Category
• Local Calls • Local Calls 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

• VoIP • Fixed VoIP 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Fixed Voice
Communicatio • Leased Lines Voice • Leased Lines 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
ns
• VAS Based on • Enterprise Internal
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Leased Lines Phone Network
• Fixed PBX 2 2 2 1 2 2 2 1 2 2 2 2 2 2 2 2
• Dial-up, ISDN, ADSL 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 2
• Normal Internet
Access • DDN ， ATM ， SD
2 2 2 1 2 2 2 2 1 1 2 2 2 2 2 2
Fixed Data H, Frame Relay
Communicatio • Leased Line Internet
ns • Leased-lines Data 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 2
Access
• Internet Data Center 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Other services
• VPN 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Applications Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Horizontal Generic
Solutions Generic Solutions
Category Applications
• Intranet 2 2 2 1 2 2 2 1 2 2 1 2 2 2 2 1
• Infrastructure
• W-LAN 2 2 2 1 2 2 2 1 2 2 2 2 2 2 2 2
• Systems • System Integration 4 4 4 3 3 4 3 2 2 3 3 3 3 3 3 2

Integration
Others
• STK Cards 2 2 2 2 2 2 2 2 1 1 1 2 1 2 1 1
• SIM Cards
• SIM Card Group 3 3 3 3 3 3 3 3 1 3 3 3 3 3 3 3
• Carrier branded
• Terminals 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
special terminals

3. Product Strategy




3 - 59
Market attractiveness of vertical solutions
Solutions Categories Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Vertical Solution Categories
• Monitoring & Control 3 3 3 3 3 1 1 3 1 1 1 4 1 1 4 1
• Tracking and Tracing 3 3 1 4 3 2 1 3 1 1 1 4 1 1 3 2
• Vertical Business/Corporate Systems 3 3 3 3 3 4 3 4 3 1 1 4 2 2 1 1
• Mobile Workforce Management 4 4 3 4 4 3 2 4 1 1 4 5 3 4 4 2
• Payment & Transaction 3 2 1 3 3 2 4 3 1 1 1 2 1 1 4 1
• Advertising & Polling 3 3 1 2 5 2 2 3 3 1 4 2 2 2 1 1

Market attractiveness of vertical applications (1/2)

Solutions Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Vertical
Solution Generic Solutions
Categories
• Monitoring & • Monitoring of Remote Mobile 2 2 1 3 3 1 1 3 1 1 1 1 1 1 2 2

Control Devices
• Monitoring of Remote Fixed 3 3 3 1 1 1 1 1 1 1 1 4 1 1 5 1
Devices
• Control of Remote Mobile 2 2 1 2 3 1 1 1 1 1 1 1 1 1 2 2
Devices
• Control of Remote Fixed Devices 2 2 3 1 1 1 1 1 1 1 1 3 1 1 3 1
• Tracking and • Locating and Navigating People 3 3 3 4 3 2 1 3 1 1 4 5 1 1 1 1

Tracing
• Locating and Navigating Vehicles 3 3 1 5 3 1 1 1 1 1 1 5 1 1 3 2
• Locating and Navigating Goods 2 3 1 2 3 1 1 1 1 1 1 3 1 3 1 1
• Vertical • Access to Industry Systems 3 3 3 3 3 5 3 4 3 1 1 4 1 1 1 1

Business/Corp
orate Systems • Access to Extranet 3 3 4 3 1 1 1 4 1 1 1 3 2 2 1 1

Market attractiveness of vertical applications (1/2)

Solutions Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Vertical
Categories
• Mobile • Field Force Planning, Dispatch 3 3 3 3 2 3 1 5 1 1 5 5 3 4 5 2

Workforce
Management • Fleet Management 3 4 3 5 4 1 1 3 1 1 2 4 1 1 2 1
• Sales Force Management 3 4 3 2 4 3 2 2 1 1 1 1 1 1 1 1
• Payment & • M-Ticketing 2 1 1 3 1 1 1 4 1 1 1 1 1 1 1 1
Transaction
• SMS billing, forms and payments 4 1 1 1 3 1 1 1 1 1 5 3 4 2 5 1
• Credit Card Payment at Mobile 2 1 1 3 3 1 1 3 1 1 1 2 1 1 1 1
Station
• M-Banking 3 1 1 1 3 3 1 1 1 1 1 1 1 1 1 1
• M-Brokerage 3 1 1 1 1 1 5 1 1 1 1 1 1 1 1 1
• Digital Signature/Encryption 3 3 4 4 2 4 3 2 1 2 3 4 3 4 1 1
• Advertising & • Basic Mobile Ads 3 3 1 2 5 2 2 3 4 1 4 1 1 1 1 1
Polling
• Location Based Ads, Coupons 3 2 1 3 5 1 1 2 2 1 3 1 1 1 1 1
• Market Surveys, Polling 3 3 2 1 4 3 3 3 3 3 4 3 3 3 1 1

3. Product Strategy




3 - 63
Strategic benefits of vertical solutions
Solutions Categories Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Vertical Solution Categories
• Monitoring & Control 2 1 1 1 1 1 1 1 1 1 1 1 1 1 3 1
• Tracking and Tracing 3 3 1 4 3 1 1 1 1 1 1 4 1 1 3 2
• Vertical Business/Corporate Systems 3 3 3 3 3 4 3 3 3 1 1 3 1 1 1 1
• Mobile Workforce Management 4 4 3 3 3 3 1 5 1 1 4 5 3 4 5 2
• Payment & Transaction 3 2 1 1 2 4 4 1 1 1 2 2 3 3 4 1
• Advertising & Polling 2 2 1 2 3 2 2 2 2 1 2 1 1 1 1 1

Strategic benefits of vertical applications (1/2)

Solutions Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Vertical
Categories
• Monitoring & • Monitoring of Remote Mobile 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Control Devices
• Monitoring of Remote Fixed 2 1 1 1 1 1 1 1 1 1 1 1 1 1 3 1
Devices
• Control of Remote Mobile 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Devices
• Control of Remote Fixed Devices 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
• Tracking and • Locating and Navigating People 4 4 3 4 4 3 2 4 1 1 4 5 1 3 3 2

Tracing
• Locating and Navigating Vehicles 3 3 1 4 3 1 1 1 1 1 1 4 1 1 3 2
• Locating and Navigating Goods 2 2 1 2 2 1 1 1 1 1 1 2 1 2 1 1
• Vertical • Access to Industry Systems 3 3 3 3 3 4 3 3 3 1 1 3 1 1 1 1

Business/Corp
orate Systems • Access to Extranet 4 4 4 3 1 1 1 4 1 1 1 3 3 3 1 1

Strategic benefits of vertical applications (2/2)

Solutions Levels
Aggregate Score
Top 500
Transportation
Retail, trade
Bank & Insurance
Securities
Travel Agencies
Hotel
Education
Media Entertainment
Police
Tax Bureau
Customs Office
Utilities
Others
Vertical
Categories
• Mobile • Field Force Planning, Dispatch 4 4 3 3 3 3 1 5 1 1 4 5 3 4 5 2

Workforce
Management • Fleet Management 3 4 3 4 3 1 1 3 1 1 2 3 1 1 2 1
• Sales Force Management 4 5 3 1 4 4 2 3 1 1 1 1 1 1 1 1
• Payment & • M-Ticketing 2 2 1 3 1 1 1 2 1 1 1 1 1 1 1 1
Transaction
• SMS billing, forms and payments 3 2 1 1 2 1 1 1 1 1 2 2 3 3 4 1
• Credit Card Payment at Mobile 2 2 1 2 2 1 1 2 1 1 1 2 1 1 1 1
Station
• M-Banking 3 1 1 1 2 4 1 1 1 1 1 1 1 1 1 1
• M-Brokerage 3 1 1 1 1 1 4 1 1 1 1 1 1 1 1 1
• Digital Signature/Encryption 3 3 3 3 2 4 3 3 1 1 3 3 3 3 1 1
• Advertising & • Basic Mobile Ads 2 2 1 2 3 2 2 2 2 1 2 1 1 1 1 1
Polling
• Location Based Ads, Coupons 3 2 1 2 4 1 1 2 2 1 2 1 1 1 1 1
• Market Surveys, Polling 2 2 2 1 2 2 2 2 2 2 3 2 1 1 1 1

As next step, we assessed the feasibility and timeline of each solution

offerings
applications
Five key factors are used to estimate expected timeline of implementation
Expected realistic launch date/timeline

Not feasible After mid 2005 2004 to mid 2005 2003 Now
Criteria
1 2 3 4 5
Ease of Not feasible in terms Requires more than 28 May be implemented May be Service already
Implemen- of cost and benefits months to be and launched within 28 implemented and accepted by ZMCC
tation implemented and months launched within 10 customers
launched months
Technology Necessary technology Necessary technology Necessary technology Necessary Service already
availability required for mass required for mass required for mass technology required wildly accepted by
adoption not adoption not available adoption is available but for mass adoption is ZMCC customers
available in 5 years in 28 months still developing available and mature
Terminal Adequate terminals Adequate terminals Adequate terminals Adequate terminals Service already
availability not available within not available within available within next 28 available within next accepted by ZMCC
next 5 years next 28 months months 10 months customers
ZMCC ZMCC has strong ZMCC has no ZMCC has capability ZMCC has strong Service already
capability competitive capability yet but may but also faces strong capability and accepted by ZMCC
disadvantage and will develop in the future competition with other competitive customers
not be able to succeed players advantage
Market Market will not be Market for solution Early adopters are Market is seeking Service already
readiness ready within 5 years not developed, little asking for solution for solution accepted by ZMCC
awareness of need but customers
may have some future
potential
Market readiness is the key driver behind timeline for launch/customer
adoption

We rated the timeline of each priority solution — Wireless Voice
Same across all industries Industry specific – Market readiness

Top Priority Solutions –
Wireless Voice Ease of Technology Terminal ZMCC Score Industry segmentation
Implementation availability availability capability
• Voice Local 5 5 5 5 5 All industries
• Voice Long Distance 5 5 5 5 5 All industries
• Voice Roaming 5 5 5 5 5 All industries
• Caller ID 5 5 5 5 5 All industries
• VPMN 5 5 5 5 5 All industries

We rated the feasibility and timeline of each priority solution — Wireless Date

Top Priority
Solutions – Wireless Ease of
Data Implementati Technology
availability
Terminal
availability
ZMCC
capability Score Industry segmentation
on
• SMS 5 5 5 5 5 All industries

4 Top 500, Hi-tech, Bank Insurance, Securities, Education, Media, Police
• MMS 5 5 4 4 3 Transportation, Retail, Travel, Utilities
2 Tax Bureau, Customs Office, Others
4 Hi-tech, Bank Insurance, Securities, Media, Police
• Access General
Top 500, Transportation, Retail Trade, Travel, Tax Bureau, Customs
Info Via Mobile 5 5 5 4 3
Office
Internet
2 Hotel, Education, Utilities, Others
4 Bank Insurance
• Access to CRM 3 Top 500, Hi-tech, Securities, Media
4 5 3 4
Systems
2 Transportation, Retail Trade, Travel, Hotel, Others
4 Top 500, Hi-tech, Transportation, Retail Trade
• Access to
4 5 3 4 3 Utilities, Hotel
Inventory Systems
2 Travel
4 Bank Insurance, Police, Tax Bureau, Customs Office
• Access to
4 5 3 4 3 Top 500, Hi-tech, Retail Trade, Securities
Reporting Systems
2 Transportation, Travel, Hotel, Education, Media, Utilities, Others
4 Bank Insurance, Hi-tech,
• Access to ERP
4 5 3 4 3 Top 500,, Securities, Media, Utilities
Systems
2 Transportation, Retail Trade, Travel, Hotel, Others

We rated the feasibility and timeline of each priority solution — Fixed Wireless
Voice and Data
Top Priority
Solutions – Fixed Ease of
Wireless Voice and Implementati Technology Terminal ZMCC
Score Industry segmentation
availability availability capability
Data on
• Mobile VoIP 5 5 5 5 5 All industries

Top 500, Hi-tech, Bank Insurance, Media Entertainment, Police, Tax
4
• Wireless-Fixed Bureau, Customs Office
5 5 5 4
PBX 3 Securities, Retail Trade
2 Transportation, Travel, Hotel, Education
4 Hi-tech, Bank Insurance, Securities
• Intranet Access 4 5 4 4 3 Top 500, Media, Police, Tax Bureau, Customs Office
2 Transportation, Retail Trade, Travel, Education
• Corporate Email 4 5 4 4 3 Top 500, Media, Police, Tax Bureau, Customs Office
2 Transportation, Retail Trade, Travel, Education
Bank Insurance, Hi-tech, Securities, Police, Tax Bureau, Customs
4
• Mobile Office Office
4 5 4 4
Assistant 3 Top 500, Media
2 Transportation, Retail Trade, Travel
• Integrated VPMN 4 5 5 4 3 Top 500, Media, Police, Tax Bureau, Customs Office
2 Transportation, Retail Trade, Travel
• Personal 4 Hi-tech, Bank Insurance, Police, Media
Information 4 5 3 4 3 Top 500, Securities, Retail Trade, Tax Bureau, Customs Office
Management 2 Transportation, Travel, Education
4 Top 500, Hi-tech, Bank Insurance
• Unified Messaging 4 5 4 4 3 Securities, Media, Police, Tax Bureau, Customs Office
Source: A.T. Kearney Analysis, Focus group and interviews, ZMCC 2 Transportation, Retail Trade, Travel, Education 3 - 71
We rated the feasibility and timeline of each priority solution — Fixed Voice and
Data
Top Priority
Solutions – Fixed Ease of
Implementati Technology Terminal ZMCC Score Industry segmentation
Voice and Data on availability availability capability
• Fixed Local Calls 5 5 5 2 5 All industries
• Fixed VoIP 5 5 5 3 5 All industries
• Leased Lines
5 5 5 3 5 All industries
Voice
• Fixed PBX 5 5 5 3 5 All industries
• DDN ， ATM ，
SDH, Frame 5 5 5 2 5 All industries
Relay
• Leased Line
5 5 5 3 5 All industries
Internet Access
4 Hi-tech, Hotel
Top 500, Bank, Securities, Education, Media, Police, Tax Bureau,

• W-LAN 5 5 5 3 3
Customs Office
2 Retail Trade, Travel, Utilities, Others
• SIM Card Group 5 5 5 4 5 All industries

We rated the feasibility and timeline of each priority solution — Vertical

Applications
Top Priority
Solutions – Vertical Ease of
Technology Terminal ZMCC
Implementati Score Industry segmentation
Applications on
availability availability capability
• Monitoring of 4 Utilities, Police

Remote Fixed 4 5 4 4 3 Top 500, Hi-tech
Devices 2 -
4 Police
• Locating and 4 5 4 4 3 Transportation, Media, Travel
Navigating People
2 Top 500, Hi-tech, Retail Trade
4 Police, Transportation
• Locating and 4 5 4 4 3 Top 500, Retail Trade
Navigating Vehicles
2 Utilities
4 Police
• Access to Industry 4 5 3 4 3 Bank Insurance, Hi-tech
Systems
2 Top 500, Transportation, Retail Trade, Securities, Travel, Hotel
4 -
3 -
• Access to Extranet 4 5 3 4
Top 500, Hi-tech, Transportation, Travel, Police, Tax Bureau,
2
Customs Office
4 Police, Customs Office
• Field Force 4 5 4 4 3 Hi-tech, Travel, Utilities, Tax Bureau, Media,
Planning, Dispatch
2 Top 500, Transportation, Retail Trade
4 Transportation
• Fleet Management 4 5 4 4 3 Retail Trade, Top 500, Travel, Police
2 Media, Utilities
4 -
• Sales Force 4 5 4 4 3 Top 500, Hi-tech, Retail Trade
Management
2 Transportation, Bank Insurance, Securities, Travel
We rated the feasibility and timeline of each priority solution — Vertical

Applications (Continued)
Top Priority
Solutions – Vertical
Ease of
Applications Implementati Technology
availability
Terminal
availability
ZMCC
capability Score Industry segmentation
(Continued) on
4 Utilities
• SMS billing, forms
4 5 5 4 3 Police, Tax Bureau, Customs Office, Media
and payments
2 Retail Trade
4 -
• M-Banking 4 5 4 4 3 Bank Insurance, Retail Trade
2 -
4 Securities
• M-Brokerage 4 5 4 4 3 -
2 -
• Digital 4 Bank Insurance, Securities
Signature/Encrypt 3 4 3 4 3 Top 500, Hi-tech, Police, Tax Bureau, Customs Office
ion 2 Retail Trade, Travel, Education, Transportation
4 Retail Trade, Media Entertainment
• Basic Mobile Ads 4 5 5 4 3 Top 500, Travel, Hotel
2 Transportation, Bank Insurance, Securities
4 Retail Trade
• Location Based
4 4 3 4 3 Top 500, Travel, Hotel
Ads, Coupons
2 Transportation, Bank Insurance, Securities
4 Education, Police
• Market Surveys,
4 5 5 4 3 Retail trade, Hotel, Media Entertainment, Bank Insurance
Polling
2 Top 500, Hi-tech, Securities, Travel

Finally, we combine results to draft industry-specific product roadmaps

each solution
• Conduct internal • Identify horizontal and per target industries
• Evaluate availability of
brainstorming and analysis vertical solution categories • Determine potential required technologies
• Screen out unrealistic ideas • Regroup individual strategic benefits of • Evaluate market readiness and
• Consider ZMCC current applications into generic solutions based on ZMCC capabilities
solutions retention and image • Determine feasibility
offerings
building potentials according to ease of
• Consider additional implementation, market
products from focus readiness, technology
groups and interviews availability, terminal
availability and ZMCC
capabilities
• Long list of 190 potential • 7 horizontal solution • Prioritized list of solutions • Prioritized list of
enterprise applications, categories and 6 vertical • Fit with target customer solutions over time,
including more than 130 solution categories industries including technological
wireless data applications • 41 generic solutions requirements
• 52 horizontal applications • Short-term, top solutions
priorities and
corresponding
applications
3 - 75
Highlights of product strategy
Preliminary
Short-term(2003) Medium-term(2004- mid 2005)

• Continue promoting current applications across • Evolve current applications to account for
all key industries larger bandwidth (e.g. SMS to MMS)
• Develop basic mobile office applications (such • Develop advanced mobile office solutions (such
as Intranet Access and e-mail) for most as access to databases) for selected industries
industries
• Develop broader vertical productivity
• Lock-in selected customers/industries with a applications, such as sales force dispatch, and
few, specific vertical applications (1) location-based services
• Promote fixed applications to very large • Start promoting WLAN and other infrastructure
companies only applications to IT-intensive industries
Note: (1) Some industries, such as police, customs office, retail, securities, media, transport, utilities and travel are
already ready for certain specific vertical applications 3 - 76
Product Roadmap – Bank Insurance
Product Roadmap – Bank Insurance

Advanced Office Applications
•Access to CRM (Bank)
•Access to ERP
Vertical Solutions
•Access to Industry Specific
Basic Office Applications System
•Personal Information Management
•Unified Messages
•Access to CRM (Insurance)
•Access to Reporting System
Basic Office Applications
•Mobile Office Assistant Vertical Solutions
•Mobile Banking
•Intranet Access
•Corporate Email Total Solution Offerings
•Wireless LAN
•Integrated VPMN
•Digital Encryption
•Access to General Info. Via Internet
•MMS
Current Offerings Total Solution Offerings
•Wireless Voice •Leased Line Internet Access
•SMS •Wireless Fixed PBX
•VPMN
•Mobile VoIP
Current Q1 2003 to Q4 2003 Q1 2004 to Q2 2005 After Q3 2005

Product Roadmap – Manufacturing High-tech
Product Roadmap – Manufacturing High-tech
Vertical Solutions
•Access to Industry Specific
System
•Access to Extranet
•Sales/Field force
Basic Office Applications management
•Unified Messages Total Solution Offerings
•Digital Encryption •Wireless LAN
Basic Office Applications Advanced Office Applications

•Mobile Office Assistant •Access to CRM
•Intranet Access •Access to Inventory Systems
•Corporate Email •Access to Reporting System
•Personal Information Management •Access to ERP Systems
•Integrated VPMN
Major Offerings •MMS
•Wireless Voice Total Solution Offerings
•SMS •Leased Line Internet Access
•VPMN
•Mobile VoIP

Product Roadmap - Police
Product Roadmap – Police
Total Solution Offerings

•Wireless LAN
Advanced Office
Applications
Basic Office Applications •Access to Reporting System
•Intranet Access Vertical Solutions
•Corporate Email •Field Force Planning,
•Integrated VPMN Dispatch
•Unified Messages •Fleet Management
Basic Office Applications Vertical Solutions
•Access to General Info. Via Internet •Access to Industry Specific System (Criminal Police
•Mobile Office Assistant Applications)
•Personal Information Management •Locating Navigating People
•MMS
Vertical Solutions
•Access to Industry Specific System (Traffic Police Applications)
Major Offerings •Field Force Planning, Dispatch
•Wireless Voice •Locating Navigating Vehicles
•SMS
•VPMN •PBX
•Mobile VoIP

Product Roadmap – Customs Office/Tax Bureau
Product Roadmap – Customs Office/Tax Bureau
Advanced Office
Applications
•Intranet Access
•Corporate Email
•Integrated VPMN
•Unified Messages
Basic Office Applications •Personal Information Management
•Mobile Office Assistant Vertical Solutions
•MMS •Field Force Planning, Dispatch (Customs Office)
Vertical Solutions
•Access to Industry Specific System
(e.g., customs clearance personnel)
Major Offerings •SMS billing, forms and payments (e.g., personal income tax, invoice lottery)
•VPMN •Wireless Fixed PBX
•Mobile VoIP

Product Roadmap – Retail Trade
Product Roadmap – Retail Trade

Advanced Office
Applications
•Access to CRM (for trade
only)
Vertical Solutions
Basic Office Applications •Market Survey
•Intranet Access Total Solution Offerings
•Corporate Email •Wireless LAN
•Personal Information Management (for trade only)
Vertical Solutions
•Locating Navigating Vehicle
Basic Office Applications •Fleet Management
•Corporate email (for trade only) •Sales Force Management
•Access to General Info. Via Internet Total Solution Offerings
•MMS •Leased Line Internet Access
Advanced Office Applications •Wireless Fixed PBX
Major Offerings •Access to Inventory System
•Wireless Voice Vertical Solutions
•SMS •Basic Mobile Ads
•VPMN •Location Based Ads
•Mobile VoIP

Product Roadmap - Securities
Product Roadmap – Securities
Advanced Office
Applications
•Access to ERP
•Access to CRM
•Wireless LAN
•Wireless Fixed PBX
•Intranet Access
•Corporate Email
•Mobile Office Assistant
•Integrated VPMN
Major Offerings
•MMS
•Wireless Voice
•SMS Vertical Solutions
•M-brokerage
•VPMN
•Mobile VoIP Total Solution Offerings
•Leased Line Internet Access

Product Roadmap – Media Entertainment
Product Roadmap – Media Entertainment
Advanced Office
Applications
•Access to ERP System
Basic Office Applications Vertical Solutions
•Intranet Access •Field Force Planning,
•Corporate Email Dispatch
•Integrated VPMN
•Unified Messages
Vertical Solutions
Basic Office Applications •Locating Navigating People
•Access to General Info. Via Internet •SMS billing, forms and payments (for subscription fees)
•Mobile Office Assistant •Market Survey Polling
•Personal Information Management Total Solution Offerings
•MMS •Wireless LAN
Vertical Solutions
Major Offerings •Basic Mobile Ads
•Mobile VoIP

Product Roadmap - Transportation
Product Roadmap – Transportation

•Access to General Info. Via
Internet
•Intranet Access
•Corporate Email
•Personal Information Management
Advanced Office Application
•Access to ERP Systems

•Access to Inventory (Logistics) Systems
Vertical Solutions
•Locating Navigating People
•MMS
Vertical Solutions
•Locating Navigating Vehicles
Major Offerings •Fleet Management
•Wireless Voice
•SMS
•VPMN
•Mobile VoIP

Product Roadmap - Utilities
Product Roadmap – Utilities

•Intranet Access
•Corporate Email
•Access to General Info. Via
Internet
Vertical Solutions
•Locating Navigating Vehicle
•Access to Inventory System
Vertical Solutions
Basic Office Applications •Field Force Planning, Dispatch
•Corporate email (for trade only) •Fleet Management
•MMS
Vertical Solutions
Major Offerings •Monitoring of Remote Fixed Devices
•Wireless Voice •SMS Billing, forms and payments
•SMS Total Solution Offerings
•Mobile VoIP

Product Roadmap - Hotel
Product Roadmap – Hotel
Advanced Office
Applications
•Access to CRM
•Access to Inventory System
Vertical Solutions
•Market Survey
Vertical Solutions
•Location Based Ads, Coupons
•Access to Industry Systems (Booking, etc.)
Basic Office Applications Total Solution Offerings

•MMS •Wireless Fixed PBX
Vertical Solutions
•Basic Mobile Ads
Major Offerings •Leased Line Internet Access
•Wireless Voice •Fixed VoIP
•SMS •Wireless LAN
•VPMN
•Mobile VoIP

Product Roadmap - Travel
Product Roadmap – Travel

•Intranet Access
•Corporate Email
Advanced Office
Applications
•Access to CRM
•Access to Reporting Systems
Vertical Solutions
•Locating Navigating People

•MMS
Major Offerings Vertical Solutions

•Wireless Voice •Field Force Planning, Dispatch
•SMS (Point to Point)
•VPMN
•Mobile VoIP

Product Roadmap - Education
Product Roadmap – Education

•Intranet Access
•Corporate Email
•Personal Information
Management
•Wireless LAN

•MMS

Current Offerings •Leased Line Voice
•Wireless Voice •Leased Line Internet Access
•SMS
•VPMN
•Mobile VoIP

In the short term, the target industry for horizontal application and vertical
application should be different
Horizontal Application Vertical Application
Priority Horizontal Application Priority Industry Priority Vertical Application Priority Industry
• Mobile Office Assistant • Bank and Insurance • Access to Industry Specific • Insurance
• Intranet Access • Manufacturing High-tech System • Police
• Corporate Email • Police
• Personal Information • Customs Office/Tax • Locating Navigating Vehicle • Police
Management Bureau • Fleet Management • Transportation
• Integrated VPMN • Trade
• Digital Encryption • Security • Field Force Planning, Dispatch • Police
• Access to General Info. Via • Media • Media
Internet • Travel Agency
• MMS
• SMS Billing, forms and payments • Tax Bureau
• Leased Line Internet Access • Bank and Insurance • Utility
• Wireless Fixed PBX • Manufacturing High-tech • Media (Including Lottery)
• Police
• Customs Office/Tax • Basic Mobile Ads • Retail
Bureau • Location Based Ads • Media
• Media • Information SMS publication
• Wireless LAN • Hotel • M-brokerage • Security
• Meida
• Monitoring of Remote Fixed • Utility
Devices

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Summary of product strategy

ZMCC is developing a comprehensive product offering to target employees and

• Basic Voice • Mobile VoIP (17951) • Fixed line VoIP

Enterprise Solutions • VPMN (2) • Mobile OA/Enterprise Info • VoIP (2)

Note: (1) Including voice, data and VAS

Early products, such as VPMN, already are clear successes …

Would you like to join a Group Plan? VPMN Penetration Rate

100% 69% of total 22% of total

Maybe Market survey

Total Know Already Use

ZMCC is widely perceived as having a stronger product range than both ZU or

Weak Strong “ZMCC is so far providing the most comprehensive

CT/XLT — IT Chief, High-tech Company

Source: Market survey, Focus Groups, A.T. Kearney analysis 3-5

However, enterprise customers increasingly demand tailor-made solutions

The VPMN concept seems very interesting. For

Telecom Manager, Government

… the tracking of the tourist bus will be attractive

Telecom Manager, Manufacturing

… the VPMN would be useful for my reporters who

Telecom Manager, Transportation Telecom Manager, Government

Large companies show a greater level of interest than smaller companies

Source: Focus Groups; A.T. Kearney analysis 3-6

Timing of Selected Products Introductions

01/1/1 01/7/1 02/1/1 02/7/1

Unicom is gradually shifting from a price-based, fast follower strategy to a more

… and that XLT is aggressively developing new data products

XLT Data Services Introductions in Hangzhou Industry Analyst Quotes

Source: Youth Daily 3-8

Enterprises in Zhejiang also demonstrate a strong interest in “one-stop-

Source: Focus Groups, A.T. Kearney analysis 3-9

… but ZMCC currently is not seen as a credible provider of fixed-line services

“We do not have a choice. CT is the only provider.

— Telecom Manager, Tourism/Hotel

“We will also need to consider country coverage for

— Telecom Manager, Bank

Source: Focus Groups, A.T. Kearney analysis 3 - 10

China Telecom is currently perceived as the strongest potential provider of “one-

Customer Perception Selected Customer Quotes

Source: Focus Groups; A.T. Kearney analysis 3 - 11

We followed a 5-step approach to develop CKAD product strategy

1. Create a 2. Group applications 3. Prioritize solutions 4. Determine timeline 5. CKAD’s product

First, we created a “universe” of potential mobile applications

1. Create a 2. Group applications 3. Prioritize solutions 4. Determine timeline 5. CKAD’s product

Source: A.T. Kearney, ZMCC 3 - 14

…plus fixed-line and other applications available in China market

Source: A.T. Kearney, ZMCC 3 - 15

To complete the list of potential applications, A.T. Kearney brainstormed an

Source: A.T. Kearney, ZMCC 3 - 16

To complete the list of potential applications, A.T. Kearney brainstormed an

Source: A.T. Kearney, ZMCC 3 - 17

To complete the list of potential applications, A.T. Kearney brainstormed an

Source: A.T. Kearney, ZMCC 3 - 18

To complete the list of potential applications, A.T. Kearney brainstormed an

Source: A.T. Kearney, ZMCC 3 - 19

To complete the list of potential applications, A.T. Kearney brainstormed an

Operators in international markets have already launched several of these