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Rumor: China Mobile to Poach CDMA Corporate Clients

21st Century Business Herald, 7/29/08

A provincial branch of China Mobile (NYSE: CHL; 0941.HK) in southern China has set out a plan to lure corporate CDMA users away from their existing providers. The plan involves offering a 10% discount over existing CDMA fees for the equivalent China Mobile service, providing a subsidy for clients to compensate for the costs of purchasing new handsets of equivalent value, and even paying breach-of-contract fees for clients who switch during the period of their existing service agreement. The plan calls to increase compensation for sales agents who succeed in attracting CDMA users, as well as encouraging sales agents them to directly convince customers to defect to China Mobile.

The plan is divided into three parts. The first will focus on corporate clients with more than 50 employees with which China Mobile has already established relations. The second stage involves other corporate clients with which it has already established relations, and the last focuses on any corporate clients with more than 10 users.

A source from within the China Mobile said that the plan has not yet been implemented and is currently awaiting management approval. The company hopes the plan will win over 50% of its targeted clients.

Keywords: marketing corporate user CDMA China Mobile southern China wireless CHL 0941.HK subsidy strategy

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