Company G

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4.2.3 Company G IT capability

Active Investment on new technology

Company G has been making investments in the new technology. For example, they’ve introduced the WiMAX (one of a long-distance wireless communication technology) in 2007. In 2009, they officially operated this. They also introduced the software which integrates WiFi, 3.5G and WiMAX with the function of choosing the optimized network according to the customers’

situation. Although WiMAX is still in its early stage, they still strove to develop services corresponding to the high bandwidth WiMAX technology. While they’re enduring the risk for failure, they still continuously invest on the new technological infrastructure potentially affording the functions and application of the next wave of business. Besides investment, they heavily leveraged the advantage of strategic alliance in terms of sharing risk and reducing the cost on development.

Complementary Resource Service Quality Focus

They continuously improve their service quality. At first they used their own methods in training new front line staffs, but the result turn out not progress in service quality improvement. One year later, they sought to the Japanese partners DOCOMO to send a training team to Taiwan to train front-line staff on the know-how of service quality. Learning from DOCOMO’s practice, they realized that the quantified standard procedure is necessary for achieving the high quality of service.

This insight drove the introduction of a service manual containing the standard procedure of service to every store.

IT-enabled Service Innovations Apps Platform

Company G’s mobile phone applications platform named “Moving Web” was created in 1999 which is exclusive for their subscribers. By this platform, they created numerous services and applications to customers. The services were mainly developed by the third party and included news, finance, weather, and e-maps etc. For example, the finance services afford the function to see the stock market and real-time synchronization process between the price watching and stock ordering.

Since 1999, the industry’s structure and competition niches have been changing, driven by the gradual growth of 3 G service subscriptions and the adoption of smart phones. The emerging new business model has resulted from the changes which have attracted the attention of many companies, such as the brand device manufacturers, system vendors, local sales agents or distributors. Notice that this situation emerged recently; the Company G Telecommunications Business Strategy Vice President analyzed the situation to the newspaper as follows:

“Since the end of 2009 until now the penetration rate of smart phones in Taiwan is expected to reach

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30 percent. We observed that functional applications such as information-based games, music, and life application, have been downloaded beyond stream-based services such as the ring-tone, and media messages. This represents the fact that the mobile phone applications for various consumer demand is likely to be greater than ever."

Regarding the model of platform, they decided not to follow the same previous pattern which is closed-oriented, but changed to an open platform unconstrained both on the consumption to non-subscribers and application supply for software providers and independent developers. For the consumer side, the unrestricted user’s source can be considered "Assassin’s service", so that consumers can experience such services and opt to the usage of functional applications via the platforms. For the supplier’s side, they have aimed to create a platform responsible for the back-office operation such as that of the cash flow management or customer after sales services. The consideration with respect to this change was explained by Chen Liren as follows:

"Taiwan's domestic market is not that large. In this case, if we limit our services only to our subscribers, it will largely limit not only the revenue source but the development of the application.

The consequence of exclusive platform obviously would increase our cost on R & D for rendering content (application) on the platform."

Recently, they plan to license this platform to other operators. They further plan to utilize the same concept and the existing infrastructure and IT resource to support other mobile operation systems such as Windows Mobile and iPhone OS. They also have strategically allied with a telecommunication operator in China (China Mobile) to introduce the S market into the China market. Since its launch in September 2009, so far there are 245 applications, and the ratio of pay to download is more than 30 percent. Company G’s revenue from value-added services have been rushed to the total turnover of 15%, ahead of other two competitors by 10% to 12%.

Location Based Service

Their navigation systems sold in the market are different from others in that users can fully use the smart phone navigation with real-time Internet transmission, and data displayed which transmitted from the mobile host side, where exist the latest news, nearby restaurants, or popular activities. Moreover, they introduced an application called pedestrian navigation technology which is very popular in Japan. This service includes bus interchange MRT, railway, high-speed rail and other modes of transport such as public information, so that mobile phone navigation can provide consumer with more complete navigation and information. In this stage, it has only supported Android platform launched smart phones. This service will be extended to more mobile system phones such as Windows Mobile and iPhone in the future. In this case, they tend to provide the service and applications from the reference of the other’s existing services.

Micropayment

In the service of micropayment, Company G provided “i-pay” which basically serves the function of an unfolding payment system. Users can use it to pay bills and stored-value game points.

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It can link bills, credit cards, and virtual accounts to subsequent or pre-paid monthly consumption. In this innovation, users can browse products using a mobile phone, can purchase orders, or scan the QR code, and then link to the phone from the phone's product page. Initially, in the commodity supply-side, they cooperated and other industries such as GO HAPPY, Formosa Plastics products, hoping to establish brand awareness of consumers on the confidence of goods. In the next step, they planned to introduce Japanese products and exclusive products to attract consumers.

To extend the services based on the micro-payment, they launched the iPay online mobile phone shopping center in the middle of 2008, which offers another opportunity to purchase physical commodities such as books, groceries and so on. Furthermore, in concern of the security problems of such payment mechanism, they developed three payment systems. More importantly, they developed the cash flow information infrastructure supporting the multiple payment mechanisms including virtual account and secure credit card payment. The security guarantee is provided by the re-authentication of credit cards and credit records from the Joint Credit Information Center of Guarantee which confirm the profile of SIM holders and the profiles of credit card users. In this manner, they can provide a more convenient and secure transaction process for customers and reduce the risk of bad debt for commodity suppliers as well. One point here is that the well-connected systems and cash-flow infrastructure became the most critical facilitator to a safe transaction via the mobile devices and to the customers’ willingness for adoption.

NFC payment

With the aim to lead the mobile communication services in the whole industrial chain, they firstly adopted the standard of the NFC technology to develop a more efficient overall industrial ecology. Through the use of global common standard, they aimed to enhance and stimulate domestic NFC-related industries and to accelerate the development of NFC applications in the telecommunications industry. They further launched the "beep beep Go" service using “NFC”

technology for consumers using credit-card-contained mobile phones as the payment tool. By cooperation with the banks to launch the pilot program providing mobile phone service, customers can use the free NFC mobile phone provided by Company G to consume in more than 5,000 stores where the Visa payWave is accepted. They’re continuously advancing the services with actively strategic alliances across other industries. While the construction of micropayment value network requires the cooperation with other industries (i.e. banking, products suppliers, distributors), it still heavily relies on the mature IT infrastructure affording the capability of coordinating complex information streams and security assurance among partners.

E-book

Beyond competitors, Company G firstly launched the e-book marketplace, providing various learning classes and the fiction comic’s e-book content in early 2008. In July 2008 they launched the

"e Comics Museum," which has attracted more than 2 million people. Later in March 2009 they provided another category of e-books - "Far Fiction Museum". They combined the e Remote Fiction

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Museum and Hall of books cartoons into their database, and they will also be contacted directly with the Web authors who will be compiled into a network works the way e-book suitable for reading directly published e-book. Technically, using the WiFi wireless transmission to download, to download the book amount of billing, the first train users to use e-book reading habits, but also allows users to select more than one product, to support possible future introduction of 3G transmission.

The plan to build the e-book industry was split into two stages. The first stage is to provide the hardware including laptop, smart phone, e-book reader and also the trial of the digital content for the testing plan before the formal operation. In the second stage, the focus will be on the business data and information transmission and cash flow arrangement and finally on the integrated application platform.

At present, Company G has only offered the transfer network, payment platforms, and mechanisms such as digital downloads, and software and hardware. Regarding the core and essential of content and channel provision, they plan to align with the physical channel Eslite bookseller to construct the ecosystem of the e-book business. They will not only attempt to increase non-voice service revenue but be the largest distributor of Chinese books by entering into the Chinese book market.

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