China’s telecommunications industry is at a point where its growth has come down by almost half from its peak of 20 % from 1997 to 2002 to about 11 % in 2005. There is also a shake out between the four principals, China Telecom, Netcom, China Mobile and Unicom and that are now subject to the interests of the share holders and have to deliver value. Thus there is a need to identify and induct new strategies for telecommunications companies in China, for which CRM is considered ideal as this short survey of the Chinese telecommunication industry will reveal.
The Chinese telecommunications industry is essentially controlled by four big players, to include Chinese Telecom, China Netcom, Unicom and China Mobile. These are state controlled firms which are also listed on the New York and the Hong Kong stock exchanges. While in the early stages of growth of the telecommunication sector, there was adequate room for expansion, today these companies are facing increased pressure and are seeking a shift from product oriented to a customer oriented strategy for growth. The details of the key players in the market and their respective areas of interest are shown as per below.
The present status of customer relationship in China is migrating from that of ready absorption to skeptical concerns about quality and reliability. The rate of turn over of telecommunications customers in China is quite high at approximately 40 %. Growth in the Chinese telecommunications market will thus be determined by adopting strategies which develop customer loyalty and build on the need to enhance the services. Chinese telecommunications companies are aware of the need for effective CRM and have partially adopted it with significant results.
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A greater acceptance of its adoption measure, the manner and mode of implementation and dovetailing with other strategies are areas which need consideration. Problem Statement. China’s telecommunication sector is showing signs of some deceleration in its growth though it may appear a comparative trend after the exponential growth of over 20 percent seen in the late 1990’s. The introduction of value added services and the large size of the market with China’s burgeoning population of 1. 3 billion of which over 400 million have been connected implies that the size of the market is very large.
However the demand for telecommunication services is likely to be saturated over the next few years, till a new surge through regulatory standardization, introduction of 3 G services and growth of the rural segment takes place. These factors are likely to greatly affect the growth of Chinese telecommunications industry and increase the level of competition which even now is very high despite being considered as state oligopolies. There is a need for an increase in focus on the customer as the product line appears to be well developed.
This is also essential as once value added services as 3 G are rolled out, the niche segment of the high end customer will demand a better quality and consistency in service and its aspirations are likely to go up once value addition comes up. Customer relationship management offers a viable alternative to the Chinese telecommunications companies to achieve higher growth by retaining existing customers as well as by adding newer customers by meeting their desires. This is also essential to increase revenues which despite the high level of penetration in terms of numbers are relatively low.
CRM is a concept adopted successfully in developed markets in the west. Its relevance and application to the emergent markets as China and India needs deliberation. Thus the essential contours of CRM in relation to the Chinese market as well as the telecommunication industry are not very clear. It is therefore essential that these issues be examined in detail and the impact of CRM interventions on the Chinese telecommunication markets is effectively visualized to assess its future trajectory. Aim and Research Questions.
The aim of this research is to review the concept of CRM and analyze its need and impact on Chinese telecommunications companies. Research Questions. To fulfill the aim, the research questions have been evolved as follows:- What is the efficacy of CRM as an appropriate strategy for growth of a business with specific relation to the telecom sector? What is the present status of the Chinese telecommunication industry and future prospects? Are China’s telecommunications companies ready for implementation of CRM, if so what would be the mode of implementation and effect on their growth in the future?