麦肯锡中国移动通信市场分析.ppt

CONFIDENTIAL,Chinas Mobile Telecom Services Industry Overview,GCO Practice Development,May 2002,This report is solely for the use of Firm personnel. No part of it may be circulated, quoted, or reproduced for distribution without prior written approval from McKinsey & Company.,02 PD China Mobile Telecoms Service Industry 020403.ppt,1,ACKNOWLEDGEMENTS AND REFERENCES,MGMs and CSS involved in the relevant studies include the following:,Tony Perkins (BEI) Stefan Albrecht (BEI) Chipper Boulas (HKO) Peter Kenevan (TOK) Perchow Joseph Chang (SHA) Andrew Wu (HKO) Hai Wu (BEI) Jane Xing (HK) Yi Feng (BEI) Sheng F Li (SHA) Yoshinobu Takanuki (TOK) Graeme Hunter (JOH) Julia Yang (BEI) Eric Xu (BEI) Jason Liu (BEI) Shirley Chen (BEI),The series of PDs include the following:,# China Macroeconomic Environment # Chinas Mobile Telecom Service Industry Overview # Chinas Internet Industry Overview # China Telecom Equipment and Services Overview # Chinas Mobile Handset Sector Overview # China Telecom Industry Regulatory Overview # Key Success Factors and Case Studies of MNCs Entry to China,02 PD China Mobile Telecoms Service Industry 020403.ppt,2,KEY MESSAGES,1. Chinas mobile telecom service market is huge and fast growing, representing US$21 billion market size in 2001 and US$38 billion in 2005. This market is supported by the worlds largest subscriber (用户)base at 145 million, already comprising 15% of the worlds total in 2001 and growing to potentially 218 million in a low case or 300 million in a high case by 2005 2. The competitive landscape for mobile services has evolved from a single regulator and operator to todays duopoly（双寡头） of China Unicom and China Mobile, both of whom are unassociated with the Ministry（财政部） of Information Industries. A second breakup of China Telecom is expected to form two large telecom operators, China Telecom and China Netcom Group, who are likely to receive mobile licenses. A fifth telecom operator, China Railcom, also has the potential of receiving a third generation license and building a mobile business. For now, China Mobile dominates the market with 82% value share and 72% subscriber share and owns much of the high value user base. However churn（用户流失） is already high and is expected to increase with continuing pricing pressures and increased competition. 3. Wireless data services are expected to grow quickly in China to a market of potentially over US$4 billion by 2005, used by 43% of all mobile users. Interest from consumer surveys（调查） have been high and operators and other players are actively building services in the market. While early WAP services have failed to catch on, SMS has grown exponentially with up to 20 billion SMS messages in 2001. The early adopters will be mobile professionals and modern youth, who will require services and devices tailored（定制） to their needs. 4. Regulatory changes loom, particularly with the accession of China to the WTO. While foreigners will be unlikely to set up MVNOs, WTO will allow greater participation of foreigners in basic and value added services, although geographic limitations will exist through 2004 and Chinese players will be required to own at least 50% of telecom service ventures (51% for basic services). Regulatory risks remain, with no means to appeal regulator decisions, unclear interpretation of regulation including WTO commitments, and the governments track record of intransparent and unpredictable decision making. (See separate regulatory PD for details) Appendix Players profiles 3G technology standards choices,02 PD China Mobile Telecoms Service Industry 020403.ppt,3,KEY MESSAGES,1. Chinas mobile telecom service market is huge and fast growing, representing US$21 billion market size in 2001 and US$38 billion in 2005. This market is supported by the worlds largest subscriber base at 145 million, already comprising 15% of the worlds total in 2001 and growing to potentially 218 million in a low case or 300 million in a high case by 2005,02 PD China Mobile Telecoms Service Industry 020403.ppt,4,1997-2001 MOBILE SERVICE REVENUE GROWTH OF 30% CAGR HAS OUTPACED OTHER TELECOM SERVICE SECTORS AND IS PROJECTED AT 16% THROUGH 2005,Revenues US$ Billions,CAGR vs. other industries (1997-2001) Percent,Mobile,Fixed line （固话）,Paging （传呼）,CAGR 30%,CAGR 16%,Source: Deutsche Bank; McKinsey analysis,02 PD China Mobile Telecoms Service Industry 020403.ppt,5,* Revenues do not equal the product of ARPU as subscriber figures are provided for year end, not average subscribers during a year. Detailed information on the timing of new subscriptions and churn required for the calculation of average subscribers during a given year is not available * All CAGRs are calculated on the announced data Source: Deutsche Bank; JP Morgan; MII,EXTRAORDINARY SUBSCRIBER GROWTH IS THE PRIMARY DRIVER OF REVENUE EVOLUTION, MORE THAN MAKING UP FOR LARGE DECLINES IN ARPU DUE TO STIFF COMPETITION,Mobile revenues* $ Billions,Number of subscribers low case Millions,CAGR 30%,CAGR 16%,CAGR 83%,ARPU US$/month,CAGR -24%,CAGR -7%,Penetration initially low Government backing for increasing subscriber numbers Relatively low fixed line penetration Low-end prepaid subscriber increase,Drivers,Decline due to increased prepaid and lower spending by late entrants Tariff reduction as competition increases Slightly off-set by increase in data traffic in later years,CAGR 19%,208,235,263,291,17,16,15,15,Announced,Effective,02 PD China Mobile Telecoms Service Industry 020403.ppt,6,* 05 forecast use low case, net subs after inactive and multi-sim-card reduction * Major European countries include: UK, France, Italy, Germany, Netherlands, Spain, Sweden Source: JP Morgan; WEFA-WMM; MII; McKinsey analysis,Japan,CHINA IS THE WORLDS LARGEST MARKET IN TERMS OF SUBSCRIBERS, HAVING OVERTAKEN THE US IN 2001,US,Major European* countries,CAGR = 30%,CAGR = 14%,CAGR = 7%,Number of mobile subscribers Millions,CAGR = 13%,China low case*,China high case*,CAGR = 22%,02 PD China Mobile Telecoms Service Industry 020403.ppt,7,CHINAS MOBILE SUBSCRIBER BASE IS GROWING MORE RAPIDLY THAN ANY OTHER MAJOR MARKET, COMPRISING 15% OF WORLD TOTAL IN 2001,* Afirca, Eastern Europe, Middle East, Canada * Forecast of 02-05 use the high case, net subs after inactive and multi-sim-card reduction Source: JP Morgan; Gartner 2001; Deutsche Bank; Merrill Lynch; Piper Jaffray,1997,1998,1999,2000,2001E,207,300,482,727,965,1,178,1,393,1,633,100% =,Global mobile subscribers Million subscribers; percent,Western Europe,US,South and Latin,Japan and Asia Pacific,China*,Rest of world*,CAGR 1997-2005 percent,29,18,45,28,47,45,2002E,2003E,2004E,2005E,1,850,02 PD China Mobile Telecoms Service Industry 020403.ppt,8,CHINAS MOBILE MARKET IS PROJECTED TO GROW SIGNIFICANTLY,* 02-05 forecast are net subs after inactive and multi-sim-card reduction Source: IDC report; JP Morgan report; McKinsey analysis,Net subscriber* additions Millions,1997,1998,1999,2000,2001,2002E,2003E,2004E,2005E,108,47,133,-9,8,-47,1,1,Annual growth Percent,1,2,3,7,9,12,13,15,16,Penetration（渗透率） Percent,47.1,43.9,46.3,45.7,5.5,11.5,16.9,39.4,35.9,Low case,High case,Low,108,47,103,-9,22,5,-1,3,High,Low,High,1,2,3,7,9,12,16,19,23,02 PD China Mobile Telecoms Service Industry 020403.ppt,9,0%,5%,10%,15%,20%,25%,CHINAS SUBSCRIBER BASE OF 218 MILLION IMPLIES A 47% PENETRATION OF AN ADDRESSABLE MARKET OF 460 MILLION BY 2005,* Low case, net subs after inactive and multi-sim-card reduction Source: JP Morgan; DRI; Asiandemographics.com; Literature search; Analyst reports; Team analysis,Income per capita (US$ p.a.),2001,Addressable market Number of mobile subscribers Implied penetration of the addressable market,2005E,345 mn 145 mn 42%,463 mn 218 mn* 47%,China income distribution and addressable market Percent,1,815,1,772,Chinas addressable population for mobile services is projected to increase by 8% p.a. for the next five years to 460 million in 2005 The key assumptions in determining the income threshold are: Chinese consumers willing to spend 5-10% of their income on communication services higher than the average of 3.5-4% for more developed markets as a greater portion of income is available for non-essential goods as a result of Chinas relatively low living cost Half of this assumed spent on mobile services (5.5%) Unicoms prepaid ARPU will decrease from USD 8.3 for 2001 to USD 8.1 for 2005; therefore the threshold income will drop from USD 1,815 (8.3*12/5.5%) for 2001 to USD 1,772 for 2005 (8.1*12/5.5%),2005 Addressable market: 35% Addressable population: 460 mn persons,2001 Addressable market: 27% Addressable population: 345 mn persons,Percent of population,02 PD China Mobile Telecoms Service Industry 020403.ppt,10,MOBILE SUBSCRIBER PENETRATION OF LESS THAN 7% IN 2000, LEAVES SIGNIFICANT ROOM FOR GROWTH,Source: JP Morgan; IDC report; Gartner; Literature search, EIU,100%,1996,1997,1998,1999,2000,2001E,2002E,2003E,2004E,2005E,Mobile subscriber penetration in 2000 Percent,Italy,Sweden,Netherlands,UK,Spain,Germany,France,US,China*,All subscribers,Data service subscribers,1,218,1,230,1,242,1,254,1,265,1,276,1,287,1,298,1,309,1,319,As percentage of total population low case* Millions (total population),China Urban*,* 02-05 forecast are net subs after inactive and multi-sim-card reduction * Penetration over total population * Penetration over urban population.,0.6,1.0,1.9,2.9,6.6,8.9,1.1,2.0,3.9,7.1,0.4,12.0,13.4,15.0,16.4,02 PD China Mobile Telecoms Service Industry 020403.ppt,11,CHINAS RICHER PROVINCES GENERALLY HAVE MORE SUSCRIBERS AND ARE GREATER PENETRATED,Population Millions,Penetration Percent, 2000,Subscriber CAGR Percent, 1998-2000,Number of subscribers Millions,Province,Guangdong,Liaoning,Zhejiang,Jiangsu,Shandong,Fujian,Heilongjiang,Shanghai,Hebei,Sichuan,Beijing,Henan,Anhui,Hubei,Hunan,Source: China Statistical yearbook, JP Morgan Report, McKinsey analysis,02 PD China Mobile Telecoms Service Industry 020403.ppt,12,WHILE THE POOR WESTERN AND INTERIOR PROVINCES HAVE LESS SUBSCRIBERS AND ARE LESS PENETRATED,* Growth rate from 1999 - 2000 Source: China Statistical yearbook, JP Morgan Report, McKinsey analysis,Population Millions,Penetration Percent, 2000,Subscriber CAGR Percent, 1998-2000,Number of subscribers Millions,Province,Jilin,Guangxi,Yunnan,Shaanxi,Chongqing,Shanxi,Tianjin,Inner Mongolia,Jiangxi,Gansu,Xinjiang,Hainan,Ningxia,Qinghai,Tibet,Guizhou,02 PD China Mobile Telecoms Service Industry 020403.ppt,13,KEY MESSAGES,2.The competitive landscape for mobile services has evolved from a single regulator and operator to todays duopoly of China Unicom and China Mobile, both of whom are unassociated with the Ministry of Information Industries. A second breakup of China Telecom is expected to form two large telecom operators, China Telecom and China Netcom Group, who are likely to receive mobile licenses. A fifth telecom operator, China Railcom, also has the potential of receiving a third generation license and building a mobile business. For now, China Mobile dominates the market with 82% value share and 72% subscriber share and owns much of the high value user base. However churn is already high and is expected to increase with continuing pricing pressures and increased competition.,02 PD China Mobile Telecoms Service Industry 020403.ppt,14,CHINAS MOBILE OPERATOR LANDSCAPE HAS EVOLVED SIGNIFICANTLY, CULMINATING IN SECOND BREAKUP OF CHINA TELECOM,No mobile licenses currently,Source: Literature search; EIU Pyramid; Industry reports,China Telecom,China Unicom,Became the second mobile network operator in mid 1994 However, China Telecom as the sole provider of both basic and wireless telephony services made it difficult for Unicom to grow,China Unicom,China Railcom,China Unicom,Ministry of Posts and Telecommunications,Created in 1994 when former MPT separated into regulatory and operating functions China Telecom ownership transferred to Ministry of Finance, with regulatory functions placed in the new Ministry of Information Industries (MII),China Telecom,China Mobile (CMCC),China Telecom,China Mobile (CMCC),Under the governments anti-monopoly plan, in the 1st half of 1999, China Telecom was split into 4 operating companies: CT fixed, China Mobile, CT Paging, CT Satellite The change became official on April 20, 2000,Prior to 1994, the MPT acted as the regulator and sole operator of telecommunications In 1993, announcement was made to separate operating and regulatory functions along with the establishment of a 2nd operator,Great Wall,Established in 1995 to harness PLAs radio spectrum The company undertakes “the CDMA project” at the direction of the government,Great Wall,Due to government commitment to separate PLA from commercial activities, Great Wall dissolved with decision to transfer CDMA assets to China Unicom made in October 2000 (transfer yet to be completed),2nd largest fixed line network Established December 2000 Offers limited GSM service over its railway network,2002 and beyond 2nd breakup and future landscape,China Netcom,Established in Sept.1999 with internet backbone Likely license winner,Jitong,Jitong,Setup in 1994 to develop data communication service,Began to offer VoIP services Leading player in voice over IP,China Netcom Group,China Railcom,China Telecom broken up into North and South with CT North merging with China Netcom and Jitong to become China Netcom Group,China Telecom South continues operation as China Telecom Operating CDMA local loop services in several cities,China Mobile unaffected by second breakup, surviving proposal to merge it with Jitong, given concerns about consequences of forced mergers for publicly listed companies,China Unicom unaffected by second breakup, surviving proposal to merge it with Railcom While Great Wall CDMA asset transfer has yet to be completed, Unicom will become first major operator in the world with both CDMA and GSM services, with launch of its own CDMA network in 2002,Operator bidding for 3G license, with openness towards adopting Chinas 3G standard, TD-SCDMA,02 PD China Mobile Telecoms Service Industry 020403.ppt,15,Source: Literature search; industry interviews,Before,After CT break-up,MOST RECENT BREAK-UP OF CHINA TELECOM TO LEAD TO A LANDSCAPE OF 5 OPERATORS COMPETING ACROSS BOTH MOBILE AND FIXED,Licenses,Licenses,Announcement on November 26 to merge Jitong with China Netcom and China Telecom Northern unit Competition will increase as merged telecom giants obtain licenses for comprehensive telecom operations, including Fixed-line phone Mobile phone Internet-related services Original plan to merge China Mobile with Jitong and China Unicom with China Railcom, met with strong dissent from the capital markets who saw this as an affront to China Mobile and China Unicoms governance as publicly held companies,Mobile,Mobile Fixed,Mobile (GSM-R) Fixed,Fixed,Fixed,Fixed,GROUP,C