Comparison b/w China Mobile & Vodafone on basis of SWOT analysis

COMPARISON BETWEEN

CHINA MOBILE &

VODAFONE

COMPANIES ON THE BASIS OF

SWOT ANALYSIS

INTRODUCTION OF VODAFONE COMPANY:

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It is a British multinational mobile network operator headquartered in Newbury, Berkshire, 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).

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

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

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Key people : Sir John Bond ( Chairman) Chairman ) Vittorio Colao (CEO) CEO) John Buchanan (Deputy Chairman) Andy Halford (CFO (CFO))

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It currently has operations in 31 countries and partner networks in a further 40 countries.

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

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Products promoted by the Group include Vodafone live!, live! , Vodafone Mobile Connect USB Modem, Modem, Vodafone Connect to Friends, Vodafone Passport, Vodafone Freedom Packs, Vodafone at Home, Vodafone 710 and Amobee Media Systems. Systems .

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Vodafone owns 45% of Verizon of Verizon Wireless, Wireless , the largest wireless telecommunications network in the United States, based on number of subscribers.

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It is listed on the London Stock Exchange, 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.

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Headquarters : Queen's Road, Road, Hong Kong

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Key people

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It is the world’s largest mobile network.

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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.

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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.

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Services : Mobile services Value-added mobile services IP telephony

: Wang Jianzhou (Chairman & CEO) CEO)







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)

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It currently has operations in 31 countries and partner networks in a further 40 countries.

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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.

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

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Vodafone owns 45% of Verizon of Verizon Wireless, Wireless , the largest wireless telecommunications network in the United States, based on number of subscribers.

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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







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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 .

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Products promoted by the Group include Vodafone live!, live! , Vodafone Mobile Connect USB Modem, Modem, Vodafone Connect to Friends, Vodafone Passport, Vodafone Freedom Packs, Vodafone at Home, Vodafone 710 and Amobee Media Systems. 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.

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Vodafone sponsors the following teams and events to advertise their company worldwide.: Kshitij, Kshitij, Annual Techno-management festival of IIT Kharagpur, Strategic Partner 2008 Albania national football team, 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), Cricket), Associate sponsor Bucharest Ring – 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.

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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.

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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.

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The company has made good profits over recent years.

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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.

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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

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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.

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

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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, Tietong, a fixed-line telecom and







WEAKNESSES : ( VODAFONE COMPANY)

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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.

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US business not nearly as strong as European/rest of the world operations 80% of its business is generated in Europe

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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.

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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.

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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)

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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).

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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.

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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.







OPPORTUNITIES: (VODAFONE COMPANY)

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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.

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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.

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It can also improve its research and development of new mobile technologies .

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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.

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It can overtake China Mobile regarding the number of customers by improving there administration, administration, by providing more facilities in Urban areas and extending its coverage area to Rural areas.







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.

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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.

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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.

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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.

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China Mobile Company ( i.e. ZONG mobile company) can beat all the other companies in Pakistan e.g. Mobilink, ufone , warid , telenor, by reducing







Badmentan Word cup etc as did by Vodafone in many countries across the globe.

THREATS: (VODAFONE COMPANY)

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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.

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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.

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It still lags behind major competitors in the USA.

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There are extremely high penetration rates of new companies in key European markets.

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







THREATS: (CHINA MOBILE COMPANY)

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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.

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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.

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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.

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China Mobile has a number of service obligations under agreements with the Chinese (PRC) Government. So the business may be obliged to provide









CONCLUSION 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







CONCLUSION CONCLUSION & SUGESTIONS

FOR VODAFONE COMPANY:

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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.

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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.







Comparison b/w China Mobile & Vodafone on basis of SWOT analysis

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