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COMPARISON BETWEEN

CHINA MOBILE & VODAFONE


COMPANIES ON THE BASIS OF
SWOT ANALYSIS

INTRODUCTION OF VODAFONE COMPANY:

• It is a British multinational mobile network operator headquartered in


Newbury, Berkshire, United Kingdom. Vodafone is the world's largest
mobile telecommunication network company, based on revenue, and has a
market value of about £71.2 billion (November 2009).

• The name Vodafone comes from voice data fone, chosen by the company to
"reflect the provision of voice and data services over mobile phones".

• It was founded in 1983 as Racal Telecom, and became independent 1991.

• Key people : Sir John Bond (Chairman)


Vittorio Colao (CEO)
John Buchanan (Deputy Chairman)
Andy Halford (CFO)

• It currently has operations in 31 countries and partner networks in a further


40 countries.

• As of March 31, 2009, the company employs more than 79,000 people
worldwide.

• Products promoted by the Group include Vodafone live!, Vodafone Mobile


Connect USB Modem, Vodafone Connect to Friends, Vodafone Passport,
Vodafone Freedom Packs, Vodafone at Home, Vodafone 710 and Amobee
Media Systems.
• Vodafone owns 45% of Verizon Wireless, the largest wireless
telecommunications network in the United States, based on number of
subscribers.

• It is listed on the London Stock Exchange, where it is a constituent of the


FTSE 100 index.

INDRODUCTION OF CHINA MOBILE COMPANY:


• China Mobile Limited was started in 1997. Originally it was called China
Telecom (Hong Kong) and then China Mobile (Hong Kong) and finally
China Mobile Limited as we know it today. Its public offering in 1997
generated capital of USD $2.5 million.

• Headquarters : Queen's Road, Hong Kong

• Key people : Wang Jianzhou (Chairman & CEO)

• It is the world’s largest mobile network.

• China Mobile has also the greatest number of mobile subscribers. As of 2009,
it is the world's largest mobile phone operator, with over 508 million
customers,the largest Chinese company listed overseas and the largest
telecom in Asia.

• A state-owned enterprise directly controlled by the government of the


People's Republic of China but also a public company that is listed on the
NYSE and the Hong Kong stock exchange, China Mobile has dominated
Chinese mobile services since its inception.

• Services :
Mobile services
Value-added mobile services
IP telephony
STRENGHTS: (VODAPHONE COMPANY)

• Vodafone is the world's largest mobile telecommunication network company,


based on revenue.

Revenue £41.02 billion (2008/09)

Operating income £5.857 billion (2008/09)

Profit £3.078 billion (2008/09)

Total assets £152.7 billion (2008/09)

Total equity £84.78 billion (2008/09)

• It currently has operations in 31 countries and partner networks in a further


40 countries.

• Based on subscribers, it is the world's second largest mobile phone operator


behind China Mobile, with over 427 million subscribers in 31 markets across
5 continents as of 2009.

• As of March 31, 2009, the company employs more than 79,000 people
worldwide.

• Vodafone owns 45% of Verizon Wireless, the largest wireless


telecommunications network in the United States, based on number of
subscribers.

• In March 2007, Safaricom, which is part owned by Vodafone and the leading
mobile communication provider in Kenya, launched a mobile payment
solution developed by Vodafone.M-PESA is aimed at mobile customers who
do not have a bank account, typically because they do not have access to a
bank or their income is insufficient to justify a bank account. The M-PESA
system allows customers to deposit and withdraw cash via local agents, and
transfer money to other mobile phone users via SMS.
• By February 2008, the M-PESA money transfer system in Kenya had gained
1.6 million customers and Vodafone announced that it was to extend the
service to Afghanistan. The service here was launched on the Roshan
network under the brand M-Paisa with a different focus to the Kenyan
service. M-Paisa was targeted as a vehicle for microfinance institutions'
(MFI) loan disbursements and repayments, alongside business to business
applications such as salary .

• Products promoted by the Group include Vodafone live!, Vodafone Mobile


Connect USB Modem, Vodafone Connect to Friends, Vodafone Passport,
Vodafone Freedom Packs, Vodafone at Home, Vodafone 710 and Amobee
Media Systems. Between June and August 2009, Vodafone suspended
roaming charges within 35 different countries, allowing their customers to
take their standard UK price plan abroad.

• Vodafone sponsors the following teams and events to advertise their


company worldwide.:
• Kshitij, Annual Techno-management festival of IIT Kharagpur, Strategic
Partner 2008
• Albania national football team, 2008 sponsor
• Brisbane Lions Football Club, Australian rules football team, major sponsor
from 2007, this sponsorship ended on October 31, 2009
• Indian Premier League (Cricket), Associate sponsor
• Bucharest Ring – Vodafone Bucharest Challenge 07, primary sponsor
• Clare Gaelic Athletic Association
• Deutsche Tourenwagen Masters (DTM - German Touring Car Masters)
series (2002–2007) (formerly D2).
• Vodafone Oaks and Vodafone Derby horse races
• Gaelic Athletic Association - Vodafone is one of the main sponsors of
Ireland's GAA
• All-Ireland Senior Football Championship for the 2009 Summer.
• Dublin GAA - Gaelic Football team, beginning in 2010 until 2016 etc.
STRENGTHS: (CHINA MOBILE COMPANY)

• China Mobile was listed fifth in Millward Brown's Brandz Top 100 Brands
in 2007. This would have be unheard of 10 years ago (or even less). The news
means that the company is becoming more than a business since it is now
also a brand i.e. possessing brand equity and brand value. Other Chinese
brands to break the top 100 were the Bank of China, the Chinese
Construction Bank and IBBC. It is argued by many that Chinese companies
are not strong in relation to marketing but perhaps things are changing.

• China Mobile's has the world's largest GSM network, which encompasses all
31 provinces, autonomous regions and directly-administered municipalities
in Mainland China and includes Hong Kong, too.

• The company has made good profits over recent years.

• China Mobile has gone down the acquisition trail on a number of occasions.
In its early days it took over Jiangsu Mobile (1997). Other important
acquisitions include Fujian Mobile, Henan Mobile, and Hainan Mobile
(1999); - and Beijing Mobile, Shanghai Mobile, Tianjin Mobile and Hebei
Mobile (2000). These developments have delivered strong growth.

• China Mobile is number one in the Chinese market. It recorded a 67.5%


market share in 2006. It is the world's largest digital mobile company, and
serves more custom

• As of 2009, it is the world's largest mobile phone operator, with over 508
million customers, the largest Chinese company listed overseas and the
largest telecom in Asia ers than any other mobile supplier.

• While a state-owned enterprise, it is listed on both the NYSE and the Hong
Kong stock exchange.

• China Mobile expanded overseas in 2007, with the purchase of Paktel in


Pakistan, and launched the ZONG brand there a year later.

• In May 2008 the company took over China Tietong, a fixed-line telecom and
the third largest broadband ISP in China, thus adding internet services to its
core business of mobile services.
WEAKNESSES : ( VODAFONE COMPANY)

• In the UK, its home ground, Vodafone has badly underperformed in the
last few years due to brisk change in administration. It has slipped from
first to third largest telecom operator.

• US business not nearly as strong as European/rest of the world


operations 80% of its business is generated in Europe

• Until recently Vodafone (specailly Airtel in India) did not own its own
towers, which was a particular strength of some of its competitors such as
Hutchison Essar. Towers are important if your company wishes to
provide wide coverage nationally.

• The fact that the has not pulled off a deal with South Africa's MTN
could signal the lack of any real emerging market investment opportunity
for the business once the Indian market has become mature.

• It does not have that much customers as that of China Mobile although it
has got its network in 31 countries across the glob.
WEAKNESSES : (CHINA MOBILE COMPANY)

• According to the head of China Mobile, China's home-grown mobile


technology is a few years behind that of its international competitors since it
was having problems with handsets. Essentially 3G technology was lagging
behind. Part of the problem was the choice to swap to TD-SCDMA's
network which many would consider inferior to the 3G technology offered
by European and American alternatives (which their competitors have
decided to adopt).

• The company is not globally diversified. Telecoms companies tend to trade in


more than one country, usually through acquisition, joint-ventures or
strategic alliances (for example the Vodafone company has trade in many
countries.). This may leave the company exposed if the Chinese market were
to go into a deep or sustained decline.

• Although it is the largest GSM company in the whole world regarding the
number of costumers but still its revenue is prety much less than the
vodafone company.

• GPRS is not yet fully functionled in all of its covered regions as it is fully
functionled in Vodafone.
OPPORTUNITIES: (VODAFONE COMPANY)

• Vodafone has great opportunity to increase its customers by reducing its


cost, because its cost is pretty much high as compare to China Mobile
Company which have very least costs.

• It has got an opportunity to become the largest Stake holders in many other
countries like Germany, Netherland , Norway etc just like India, where it has
got the largest Stake in the Telecommunication Market.

• It can also improve its research and development of new mobile


technologies .

• It has got a good opportunity to become the largest mobile company


regarding the number of customers by focusing on developing markets , for
example Africa, Latin America, Russia etc.

• It can overtake China Mobile regarding the number of customers by


improving there administration, by providing more facilities in Urban areas
and extending its coverage area to Rural areas.

• It can extend it Mobile Money Trasfer Service to other contries of the globe
for example in India, Albania, African countries etc, as well which will
improve the revenue.

• It can increase its customers by sponsering more and more international


events e.g. in sports , it can sponser Foot ball Word cup, Cricket word cup,
Badmentan Word cup etc.
OPPORTUNITIES: (CHINA MOBILE COMPANY)
• The Chinese economy has undergone enormous growth, which has lead to
the huge demand for mobile telephones, devices and technologies. According
to the Chinese Government, China is the world's largest mobile market with
520 million mobile phone users. This number could reach 600 million by
2010.

• Budget users in China are driving growth in the mobile telecoms sector.
China Mobile reported a net profit between January and March 2008 of
around 24.1bn yuan (£3.4bn; £2.2bn) which is a rise of 37% on 2007
according to BBC News.

• Since the cities have become saturated, much of the new growth is predicted
for rural China and it is this segment that is most likely to be targeted by the
large operators. 3G technologies provide the largest opportunity for China
Telecom.

• As it is the largest GSM company basis on the number of customers ( which


is 508 million by 2009) , it can become the world larget GSM providing
company on revenue basis as well, by extending its netword across the globe
as that of the Vodafone which extended its network to 31 countries across the
globe.

• China Mobile Company ( i.e. ZONG mobile company) can beat all the other
companies in Pakistan e.g. Mobilink, ufone , warid , telenor, by reducing
there cost, introducing new services for example Mobile Money Transfer
Service as Vodafone did start it in many countries across the globe and other
services as well because it is largest company in the world so it will not affact
its revenue that much if they reduces there cost comparing to other
companies in Pakistan.

• It can extend its netword to Europe ( where it should compete with


Vodafone) , to USA, to Latin America , to Africa, to Middle East , to Russia,
to Mongolia , to Australlia and many other regions and countries. Than this
company will become unbeatible.

• It can increase its customers by sponsering more and more international


events e.g. in sports , it can sponser Foot ball Word cup, Cricket word cup,
Badmentan Word cup etc as did by Vodafone in many countries across the
globe.

THREATS: (VODAFONE COMPANY)

• It has got highly competitive market market across the globe e.g. China
Mobile Company emerged as largest GSM providing company in the whole
world.

• If China Mobile company introduced its services in Europe and India ( the
largest markets of Vodafone) than there would be a great decrease in the
revenue of the company.

• It still lags behind major competitors in the USA.

• There are extremely high penetration rates of new companies in key


European markets.

• European Union regulation on cross-border cell phone usage by customers.

• Development of VoIP communication may also reduce the use of GSM


across the globe, especially in Europe and America.
THREATS: (CHINA MOBILE COMPANY)

• It has got highly competitive market market across the globe e.g. Vodafone
Mobile Company emerged as largest GSM providing company in the whole
world on the basis of revenue, and its number of customers increase day by
day because it has introduced its network in 31 countries across the globe.

• New subscribers are mainly low-use, low-value. So average revenue is falling


as the mobile phone market matures and the market becomes more price
competitive. So mobile phone suppliers are awaiting the introduction of 3G
mobile technologies to rejuvenate the market and stimulate demand as
Chinese customers consume the new added value services.

• China Mobile could face more competition in the future as the Chinese
Government plans to allow more operators into the market. China Mobile
has 70% of the 2G market in China. China Unicom wants to become the
biggest 3G operator, and China Telecom aims to win 15% of the 3G market
by 2010.

• China Mobile has a number of service obligations under agreements with the
Chinese (PRC) Government. So the business may be obliged to provide
unprofitable services that pay a social dividend. Added to this the Ministry
of Information and Industry has allocated a limited frequency (44MHz) to
the company which will not support large numbers of subscribers in the
future.

• As Vodafone is the emerging GSM provider company on the basis of number


of customeres so China Mobile may lose there customers if Vodafone
introduced its network in Pakistan , China and Hong Kong. And that would
reduce their revenue to a great extent.
CONCLUSION & SUGESTIONS

FOR CHINA MOBILE COMPANY:

• As the company is not globally diversified. Telecoms companies tend to trade


in more than one country, usually through acquisition, joint-ventures or
strategic alliances (for example the Vodafone company has trade in many
countries.). This may leave the company exposed if the Chinese market were
to go into a deep or sustained decline.

So China Mobile should introduced their network services in


other countries across the globe just like Vodafone who have introduced there
services in 31 countries in the world while China Mobile has their services only
in 3 countries.

• According to the head of China Mobile, China's home-grown mobile


technology is a few years behind that of its international competitors since it
was having problems with handsets. Essentially 3G technology was lagging
behind. Part of the problem was the choice to swap to TD-SCDMA's
network which many would consider inferior to the 3G technology offered
by Vodafone. And China Unicom wants to become the biggest 3G operator
in China.

So in order to take competitive advantages from their competators,


they should start implementation of 3G technology.

• As there advertisements are very less as compare to Vodaphone so they


should increase there advertisement.
• The sponserships of china mobile fone is very less as compare to voda fone so
they should increase their sponsership to get compatitive advantages.

• The bandwidth utilization of china mobile fone compani is only 44MHz


which is less as compare to voda fone, due to which its blocking capability of
calls in busy hours is more than voda fone and so it has poor quality of
services than voda fone
CONCLUSION & SUGESTIONS

FOR VODAFONE COMPANY:

• As Vodafone has got highly competitive market across the globe e.g. China
Mobile Company emerged as largest GSM providing company in the whole
world.

So Vodafone should increase their number of customers to compete


with China Mobile Company by decreasing their cost.

• It still lags behind major competitors in the USA.

So Vodafone should compete in the USA market by introducing their


network in the USA and it should decrease their cost to the minimum
possible just to cover the market.

• As there is extremely high penetration rates of new companies in key


European markets.

So Vodafone Company should offer more and more


services to its customers with the minimum cost possible to stop the penetration
of the new competitors.

• Development of VoIP communication may also reduce the use of GSM


across the globe, especially in Europe and America.

So Vodafone should offer more packages especially


regarding making of calls with the minimum cost possible. Because it will help
the GSM network to compete with the VoIP communication, otherwise it will
greatly affect the revenue of the Vodafone especially in Europe and America
where the VoIP communication is developing with enormous speed.