CHINA MOBILE (HK) LIMITED Human Resource Strategy Shanghai February 15, 200X,THE BOSTON CONSULTING GROUP,CONTENT,Hypotheses on China mobile phone market BCGs approach to HR strategy Project approach and structure BCG qualification and experience Appendix Selected CVs,THE EVOLUTION OF THE MOBILE MARKET WILL CREATE MAJOR STRAINS ON HUMAN RESOURCES,Historically, the growth challenge has been simple Serve pent-up demand with one basic product “Build the network, activate subscribers, collect the payments” Increasing competition and new technologies mean dramatic challenges Tremendous emphasis on marketing and sales Intense warfare requiring strategy and tactics Increasing importance of customer relationship management and service The need to develop partnerships and create new businesses Increasing pressure on technical abilities-broader definition of technology Increasing pressure on overall cost position and productivity Need for commercially-driven senior management, working as a team These strains create a need for a fundamental rethink of HR strategy,WITHOUT BUSINESS-DRIVEN INPUT, AN HR STRATEGY DEVELOPMENT EXERCISE WILL FAIL,The strategic changes in the mobile market bring revolutionary change, not evolutionary change One dominant factor is that these changes will require the rapid creation of entire new job families, and rapid change in the requirements of existing job families As a result, the overall people mix of the company will be dramatically different in the future than it is today. The mix will also be quite different than either the “typical PRC company” or the “typical telco.” The required pace of change will also be quite different. An HR strategy that fails to take this into account will also fail. If the HR strategy fails, then the company will fail. Wrong skills to face the future competitive threat Wrong overall cost structure The best employees leaving to join the competitors Major missed opportunities to form new businesses and partnerships A traditional HR consulting firm will not have a clear view on the strategic changes Their models will be based upon “typical PRC companies” and “typical global telcos.” Neither will be sufficient, and both will have major flaws.,CONTENT,Hypotheses on China mobile phone market BCGs approach to HR strategy Project approach and structure BCG qualification and experience Appendix Selected CVs,The cellular telephone market in Asia in particular in China will continue to show strong growth As a result of this growth, the dynamics of the market will be increasingly strong and will affect the Human Resource strategy of China Mobile BCG has developed an integrated HR Strategy Framework that will link external market factors to the internal requirements of the organization We have subsequently outlined both our HR Strategy Framework as well as some initial analyses on the most relevant external factors specifically these are: WTO Competition Technology Business Migration Customer Service,CHINA MOBILES HUMAN RESOURCE STRATEGY WILL BE AFFECTED BY A POWERFUL SET OF MARKET FACTORS Summary of subsequent Proposal Section,Summary,STRONG GROWTH IN CELLULAR TELEPHONY IN ASIA . Asia-Pacific Cellular Subscribers, 1990 - 2000,Cellular Subscribers (M),Annual Growth 75%,Annual Growth 40%,Note: The Asia-Pacific region includes the countries of Northeast Asia, Southeast Asia, South Asia, the islands of the Western Pacific, Australia and New Zealand. Assumes decrease in revenue per subscriber of 5% per annum between 1996 and 2000. Source: International Telecommunications Union, Merrill Lynch,Revenue (US$B),3,4,7,11,17,27,51,68,89,118,156,Asia claims 36% of the worlds cellular subscribers by 2000,. AND IN PARTICULAR IN THE GREATER CHINA REGION China Cellular Subscribers, 1991 - 2000,Cellular Subscribers (Mn),Annual Growth 170%,Annual Growth 86%,Source: CCID,0.05,0.177,0.638,1.57,3.63,6.85,13.23,24.98,43.8,75,Cellular Subscribers (Mn),GREATER CHINA WILL REPRESENT AN INCREASINGLY LARGE AN DYNAMIC MARKET IN ASIA,Note: Sub-regional groupings include South Asia (India, Pakistan, Bangladesh, Sri Lanka), Greater China (China, Taiwan, Hong Kong, Macau) and Southeast Asia (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) Source: International Telecommunications Union,Japan,Australia/ New Zealand,Southeast Asia,Greater China,Korea,South Asia,0.2,8.5,37,0.5,17,77,Greater China (M),Total ANJ,Total Asia-Pacific (M),1.2,33,125,Distribution Of Asia-Pacific Cellular Subscribers,NEW BUSINESS CHALLENGES, WITH MAJOR HR IMPLICATIONS WILL FACE MOBILE PLAYERS IN CHINA,Upcoming business challenge,Emphasis on marketing and sales and intense warfare requiring strategy and tactics Increasing importance of customer relationship management and service The need to develop partnerships and create new businesses Increasing pressure on technical abilities-broader definition of technology Increasing pressure on overall cost position