Rumor: SASAC Requires Telcos to Reduce Marketing Expenses
Caijing, 6/04/14
According to Chinese media reports, China's State-owned Assets Supervision and Administration Commission (SASAC) has set a three-year target for China's three major telecom operators, requiring that the operators reduce their sales and marketing expenses by 50% during the period.
China Mobile (NYSE: CHL; 0941.HK) plans to cut RMB 27 bln from its sales and marketing expenses this year, amounting for approximately 16% of the company's planned RMB 170 bln in 2014 marketing costs. These costs include commissions for handset retailers, subscriber subsidies, and terminal subsidies. China Telecom (NYSE: CHA; 0728.HK) and China Unicom (NYSE: CHU; 0762.HK; 600050.SH) are also facing requirements to reduce marketing expenses by approximately RMB 4 bln each in 2014.
Editor's Note: For more background on this topic, please see "Rumor: Telcos to Reduce 2014 Handset Subsidies by RMB 10 Bln" MD 5/15/14 issue.
Keywords: regulation China Telecom China Mobile China Unicom marketing telecom wireless SASAC CHL 0728.HK 0762.HK 0941.HK 600050.SH CHA CHU
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