Mobile Payment Solution For Sk Bup Ters

Mobile Your Life ： A Mobile Payment Solution For SK By Wang Chen, School of Economics and Management Ma Linian, School of Economics and Management Li Gang, School of Economics and Management

Outline New competition situation of China Telecom Industry 1.1 The change of telecom operators’ income structure 1.2 The trend of the service evolution 1.3 Mobile payment is a smart choice for China Unicom 1.4 SK has mature operation experience in Mobile Payment 1.5 Transportation and micro-payment is Feasible and Potential for China Unicom 2.1 Description of Transportation card service 2.2 Description of Micro-payment service 2.3 Criteria of choosing a long-term profitable strategy 3.1 Market plan of the strategy 3.2 Strategy for Phase 1, 2,3 in details 3.3 Establish commercial alliance to provide total mobile financial service for subscriber Goal Why is Mobile payment? What is Mobile payment? How to Mobile payment?

1.1 New competition situation of China Telecom Industry Before the reform After the reform 3G Brand & Network license TD-SCDMA WCDMA CDMA2000 Brand & Tech Market Share of income Market Share of mobile subscribers Source ： Information and Technology Industry Department of PR. China ,[object Object],[object Object],Fixed operator

1.2 The change of telecom operators’ income structure Source ： Annual report of CMCC, Vodafone, Verizon, Ericsson business consulting technology.cgap.org ,[object Object],[object Object]

1.3 The trend of the service evolution ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Customer’s diversified demands ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Basic services Value-added services Comprehensive and converged services Customer Value Extension China Mobile operators are evolving to offering comprehensive services

1.4 Mobile payment is coming! Cooperating with SK is a smart choice for China Unicom ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

1.5 SK’s comprehensive mobile payment solution and mature operation experience in Mobile Payment Source ： technology. cgap. org, www. catr. cn ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2001 2002 2003 2007 2003.03 Transportation Pass Launch 2005. 01 Membership Shopping Mall Launch 2005 ,[object Object],[object Object],[object Object],[object Object]

Outline New competition situation of China Telecom Industry 1.1 The change of telecom operators’ income structure 1.2 The trend of the service evolution 1.3 Mobile payment is a smart choice for China Unicom 1.4 SK has mature operation experience in Mobile Payment 1.5 Transportation and micro-payment is Feasible and Potential for China Unicom 2.1 Description of Transportation card service 2.2 Description of Micro-payment service 2.3 Criteria of choosing a long-term profitable strategy 3.1 Market plan of the strategy 3.2 Strategy for Phase 1, 2,3 in details 3.3 Why is Mobile payment? What is Mobile payment? How to Mobile payment?

2.1 Transportation and micro-payment is Feasible and Potential for China Unicom Source ： chip.moneta.co.kr ,[object Object],Stability Convenient Unity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Criteria for CU to choose application at the beginning ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Transportation card Micro-payment Feasible and Potential Application for CU

2.2 With public transportation investment increasing, transportation Card is booming in the main cities of China ,[object Object],Regions Start Time Application Scope 2000.10.23 ,[object Object],[object Object],1999.05.25 ,[object Object],[object Object],2001.12.01 ,[object Object],[object Object],[object Object],Situation in China The transportation cards’ number will continue increasing fast in the future, and will enter non-transportation scope, such as utilities and micro payment, etc. 25 11 20 Unit: Million Accumulated number of card in Beijing transportation Micro-payment 8.0 17.0 25.0 Unit: Million 2006 2007 2008

2.3 Rapid growth of retail sales and chain stores make a wonderful preparation for mobile micro-payment service. Rapid growth in Retail Sales ,[object Object],[object Object],Chain Sales of More Rapid Growth ,[object Object],[object Object],Rapid growth of total retail sales especially the rapid development of Top 100 chain sales have made a wonderful preparation for the promotion of mobile micro-payment service. transportation Micro-payment

2.4 Convenience store is the best choice for micro-payment as target group to cooperate with at the beginning 2 Department Stores Exclusive Retailers Super Markets Convenience Stores C1 C2 C3 C4 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The Analysis Matrix Of Options 3 Convenience Store is the Best Choice transportation Micro-payment 1 Potential Divers for Market Adoption Total 3.26 4.66 3.02 4.0 Consumption Frequency 40% 4 5 3 4 Branch Number 30% 4 5 3 3 Consumer Number 30% 3 4 4 5 Business willingness 40% 2 4 2 4 Consumer attitude 60% 3 5 3 4 Key Factors for Evaluation Weight C1 C2 C3 C4 Capability 60% 3.7 4.7 3.3 4.0 Acceptability 40% 2.6 4.6 2.6 4.0 5 4.5 4 3.5 3 2.5 2.5 3 3.5 4 4.5 5 Capability Acceptability C1 C2 C3 C4

2.5 Cooperating with 7 companies covers 3 main economics developed areas in China Company Name Summary Scale 5000 Under the Division of China Petroleum & Chemical Corporation , who have long-term relationship with SK More than 2000 Belong to Don guan Sugar & Liquor Group Holding More than 1200 Subsidiary of Agribusiness Super mart Group Co,. Ltd 590 Shanghai, Beijing and Guangdong stores managed by the three companies More than 300 Co-management by Rosen Co., Ltd. from Japan and Hualian (Group) Co.,Ltd More than 200 Belong to Hong Kong's best holding 313 Run by Wu-Mart Group transportation Micro-payment The companies below are selected as target group to cooperate

Outline New competition situation of China Telecom Industry 1.1 The change of telecom operators’ income structure 1.2 The trend of the service evolution 1.3 Mobile payment is a smart choice for China Unicom 1.4 SK has mature operation experience in Mobile Payment 1.5 Transportation and micro-payment is Feasible and Potential for China Unicom 2.1 Description of Transportation card service 2.2 Description of Micro-payment service 2.3 Criteria of choosing a long-term profitable feedback strategy 3.1 Market plan of the strategy 3.2 Strategy for Phase 1, 2,3 in details 3.3 Why is Mobile payment? What is Mobile payment? How to Mobile payment?

3.1 Cooperating with China Unicom ensure a long-term profitable feedback from mobile payment Strategy 2: Equipment Supplier ,[object Object],[object Object],Strategy 1: Cooperate with China Unicom ,[object Object],[object Object],Details 1 2 3 4 5 Score Profitability Short term Mid-term Long term Global Strategy MVNO Transformation FMA Market Prepare Brand Criteria Influence on customer ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Goals 3.Goals Analysis 1.Goals 2.Strategy option Conclusion: Statery1 : Cooperate with China Unicom is one absolute advantage option, which will ensure SK a long-term profitable feedback and SK should take it.

3.2 Through 30 months market plan, establish a commercial alliance to provider total mobile financial service Phase 1 Phase 2 Phase 3 We introduce a 30-month market plan to implement Strategy 1; The market plan consists of 3 phases and includes hard system and soft system. Hard system Soft system Phase Description Phase target Start 6th month 18th month 30th month As the first phase of whole market plan, main task in this phase is to establish a good consumer base. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],During this phase, Moneta should spread its brand influence and extend from transportation area to Micro-payment area ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],At the base of consumers’ trust, Moneta could try to provider comprehensive personal mobile financial service for consumers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Cooperate with transportation card company Cooperate with commercial banks Cooperate with convenience stores ,[object Object],[object Object]

3.3 Proposed strategy of Phase 1: cooperate with transportation card company 2 Strategy partner: Beijing Public Transport, Ltd.(BPT) General Description As of the end of 2006, BPT has a fleet of 25,409 operating vehicles of various kinds, plying 800 bus routes with an annual mileage and passenger trips topping 1.57 billion km and 389 billion respectively. About transportation card ,[object Object],[object Object],[object Object],1 At very best, SK should establish a the long-term cooperation relationship with China Unicom. We suggest SK establish an joint venture company with CU to operate mobile payment business. Cooperate with BPT SWOT analysis for cooperating with BPT Strength & Weakness ,[object Object],[object Object],[object Object],[object Object],[object Object],3 Opportunity & Threat ,[object Object],[object Object]

3.4 Proposed strategy of Phase 2: cooperate with convenience store 1 Selected convenience store: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Proposed strategy of Phase 2 2 ,[object Object],[object Object],[object Object],[object Object],[object Object]

3.5 Criteria and Factors impact on option analysis Internal capability External Tendency Criteria Description Comments Policy Informa- tionization Service Capability Customer Scale Interest on Mobile Payment Mobile Payment Status ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

3.5 In phase 3, China Merchants Bank is the very best partner to choose China Merchants Bank is the very best partner for this business. EXTERNAL INTERNAL TENDENCY Alternative Policy Informa- tionization Service Capability Customer Scale Interest On Mobile Payment Mobile Payment Status Summary ,[object Object],[object Object],Beijing Bank matching

3.6 Establish commercial alliance to provide total mobile financial service for subscriber IT industry Financial industry Retail industry ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Media industry Entertainment industry Mobile Carrier ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Financial Business character Financial Business Key-point To foster a carrier dominated and cooperated with banks mobile communication eco-system together with non-communication industries to occupy customer value at maximum.

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Mobile Payment Solution For Sk Bup Ters

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