This excerpt taken from the CHU 20-F filed Jun 28, 2005.
We focus on developing a strong brand image for our company that conveys our strengths in high quality and comprehensive services, nationwide coverage, integrated offerings, advanced technology and customer focus. We market all of our services under the China Unicom brand name. We emphasized brand management in 2004, by developing a customer-oriented branding system based on our product profile so as to standardize our operations and ensure consistency in our promotional activities.
Our marketing strategy utilizes our image as an integrated telecommunications service provider and leverages on our integrated services and nationwide sales and distribution network. By using direct sales forces and sale agents and active market analysis and through service centers, large department stores and chain stores, our marketing strategy can be targeted at different customer segments and tailored according the demands of different markets, enabling us to timely adjust our services. In addition, we also seek to enter into strategic alliances in order to further expand the breath and depth of our marketing and sales efforts. In September 2004, we entered into a wireless Internet joint marketing agreement with Intel, HP, IBM, Lenovo and Digital China to develop the industry value chain for our U-Net services based on the CDMA 1X network.
We seek to formulate effective marketing strategies through customer relations management and analysis of customer segmentation, customer demand and consumption trends.
Cellular services: We promote our CDMA services as cellular services with such advantages as better voice quality, better security, lower handset radio transmitting power and, in the case of CDMA 1X services, high data transmission rates and comprehensive value added wireless data services. In 2004, we focused on developing the CDMA industry value chain. Under the principle of open, cooperate and win-win, we strengthened support for and streamlined our relationship with service and content providers. We have also adopted the policy to centralize our purchasing of the Cool Phone handsets and certain other models of CDMA handsets in an attempt to lower the entry barrier of our CDMA services caused by high handset price and make the CDMA services more attractive and affordable to the mass market. In addition, our CDMA-1X services continued to develop. By offering trial packages of the CDMA-1X services and requiring users of our promotional packages to have a minimum monthly spending on value-added services, we promoted usage of the CDMA-1X wireless data service.
We also continued to expand the subscriber base for our GSM services, which is mainly based on voice and SMS services. Our marketing strategies for GSM services focused on the continued development of the voice and SMS services as well as promoting the Cool Ring Tong service and the Music Street service.
Recognizing the importance and the needs of our institutional customers and utilizing our advantages of being an integrated telecommunications operator, we formulated marketing strategies for our cellular services that were specific to our institutional customers. In 2004, we emphasized the development of advanced and customized industrial applications for our institutional customers. By offering industrial solutions, our business extended from the provision of basic telecommunications services to comprehensive information services. For example, we launched several industry-specific applications based on the CDMA-1X network, including Unicom Horizon Police Application, Unicom Horizon Maritime Application and Stock-in-Palm.
In 2004, we consolidated our brands of wireless data value-added services under one uniform brand, uni, and aimed to build it into a new media portal brand for content consumption, with emphases on entertainment, life and commerce. Meanwhile, the U-Net brand was positioned to be a high-end brand for wireless Internet access for laptop users.
In addition we have started promoting the following customer-oriented cellular services brands in 2004: (i) Ruyi Tong, which is designed for the mass market and features voice services on either the GSM or the CDMA network, the uni-Info value-added services and SMS services, (ii) New Horizon, which targets mid- to high-end users as well as institutional and business customers, offering CDMA-based voice services, the uni value-added services and industry-specific applications, (iii) Worldwind, which features dual-mode voice services and the uni services, and (iv) UP New Power, which is designed for the youth market, with either GSM- or CDMA-based voice services, SMS services as well as the uni-Wap value-added services. We believe that development of these customer oriented service brands will help us adapt to the changing market condition and improve customer loyalty.
Long distance, data and Internet services: In 2004, we focused on institutional customers, including financial institutions, large corporations, multi-national corporations, government entities and Internet service providers and Internet content providers, in order to provide them one-stop solutions. For example, we provided integrated long-distance, Internet and data services under the Uni-One brand to institutional customers. Our marketing efforts with respect to retail customers included the marketing of co-branded long distance telephony cards. Under these arrangements, our institutional partners purchased such cards from us and distributed the cards to their employees or customers, thereby facilitating the sale of our long distance telephony services. We have also focused on the marketing of our long distance, Internet and data services to our existing cellular customers, as well as coordinating the marketing of these services with the marketing efforts of our cellular services.
Service Bundling and Cross-Marketing: A key element of our sales and distribution strategy is to promote our strengths as a provider of a broad range of integrated services. This strategy is implemented by our service centers, independent sales agents and direct sales forces, which distribute and support our various product offerings. For example, we cross-sell our long distance services to our cellular subscribers. In addition, based on the specific demands of our industry and institution clients, we provide customized communications solutions by bundling VPN, IP telephony, Uni-Video broadband video-telephony and Uninet services.