With the entire business currently handled by JWT, China’s second largest mobile phone operator is attempting to improve its CDMA offering to better compete with its bigger rival, China Mobile.
Accordingly, China Unicom’s GSM division is pitching a high-end service project, which sources say could lead to the entire GSM creative account. It is believed that six agencies contested the pitch, including JWT, BatesAsia and the front-runner, TBWA.
This has been followed by a CDMA full-service creative review, to create a new brand for the company’s second network. At press time, it was believed incumbent JWT, Euro RSCG, TBWA and Dentsu were taking part. “China Unicom wants to focus attention on CDMA, as it wants to enhance its competency against China Mobile,” said a source involved in the pitch.
In March, China Unicom had 109 million GSM subscribers, but only 38 million CDMA customers, giving a total of 147 million — less than half of its larger competitor, China Mobile. “It has a big challenge with CDMA, because people don’t believe it’s a viable network and it has a big distribution challenge,” said another source.
Industry experts have already predicted that the Chinese Government is considering breaking up China Unicom, merging its GSM side with China Netcom and its CDMA network with China Telecom to create two Chinese mobile phone giants capable of competing with China Mobile.
The Chinese Government only plans to issue three licences for 3G.
“China Unicom came into the market as a discount player and has never really overcome that image. It tried to shake it off in its CDMA business but, despite some successes, it has struggled to operate two networks,” said Ted Dean, MD of BDA Consulting, a Beijing-based telecoms and technology consultancy.
Dean added that, although relevant, the splitting of the company’s marketing department is not a definite sign of further restructuring.
Additional reporting by Arun Sudhaman