CHINA COMMUNICATIONS SERVICES CORPORATION LIMITED
What kind of company is China Comservice?
China Comservice (China Communications Services Corporation Limited) is a service provider for telecommunications, media and technology companies. It is also the largest telecommunications infrastructure service provider in the PRC. We have many years of experience in providing services for telecommunications operators, government agencies, enterprises and other customers. These services include telecommunications infrastructure services(TIS) covering planning, consulting, design, construction and project supervision and management, business outsourcing services(BPO) covering maintenance, distribution of telecommunications services and products, and facilities management, as well as applications, content and other services(ACO). We provide integrated services covering the key activities of the value chain of telecommunications operators. We have the ability to provide integrated solutions to our customers. (For more details, please refer to "Corporate Profile" and "History")
When was China Comservice Listed?
The Company was listed on the Stock Exchange of Hong Kong on December 8, 2006. The offering price was HK$2.20 per share. (Please refer to "Corporate & Shares Information" for details)
Who are the major shareholders of China Comservice?
China Telecommunications Corporation is our controlling shareholder which holds 3,036 million domestic shares, representing 52.6% of our total issued shares. In addition, China Mobile Communications Corporation and China United Network Communications Group Company Limited hold 507 million and 236 million domestic shares, representing 8.8% and 4.1% of total issued shares respectively. The public holding is 34.5% of our total issued shares. (Please refer to "Shareholding Structure" for more details)
What types of maintenance services does the Company provide?
In addition to the provision of maintenance services of network and equipment such as base station, optic fiber, cable and broadband network to the telecommunications operators, we also provide maintenance services of communications and information system to government agency and corporate customers. There is great market potential in maintenance service. For example, currently there are more than 680,000 base stations owned by the three major telecommunications operators and of which only 20% are under our maintenance. Our market share in maintenance of optic fiber and cable is around 15%. Therefore, there is huge room for market expansion. (For more details, please refer to "Business Overview")
What is the distribution service?
We provide distribution service (distribution of telecommunications services and products) mainly to the telecommunications operators and equipment manufacturers. The services include telecommunications service agency, distribution and retail of PHS and mobile phones, and distribution, logistics and procurement agency services for telecommunications machineries (such as optical fibers and ADSL modems, etc). (For more details, please refer to "Business Overview")
As a service provider for telecommunications, media and technology companies, providing distribution services enable us to cover both front end and back end services of the value chain of telecommunications operator customers. This helps us to provide integrated package of services serving all aspects of the value chain, strengthen our competitive advantage of comprehensive one-stop service provision and promote our service value, therefore improving our customer loyalty and benefiting to our long term development.
What is the ACO Service?
In ACO (applications, contents and other) services, we offer IT applications (system integration and software development etc.), internet services, voice value added services to telecommunication operators, government agencies and corporate customers and other public customers. (For more details, please refer to "Business Overview")
Who are the government, corporate and other customers of the Company?
Our government, corporate and other customers include government agencies, enterprises, equipment manufacturers, public customers, as well as overseas customers. We undertake construction of communications facilities for infrastructure and municipal projects, and provide professional solutions and integrated services such as Wide Area Network ("WAN") and Intranet for the informatization construction by government agencies, schools, hospitals and enterprises (such as domestic large oil companies and insurance companies).
Who are the main competitors of the Company?
In the specialized telecommunications support service industry, we are an integrated service provider in China. Due to our integrated business model, we have no direct competitor in the PRC providing the same integrated services. However, there are a few key competitors to some of the services we provide. For example, in design services, our key competitors are China Mobile Group Design Institute Co. Ltd and China Information Technology Designing & Consulting Institute. Both entities are affiliates of China Mobile and China Unicom respectively, and mainly engage in traditional network design services. In construction services, our main competitor was China International Telecommunication Construction Corporation (CITCC) which we acquired in 2008. In project supervision and other services, we face competition from a few small and medium sized companies.
Does the Company provide any service in overseas market?
Part of our revenues came from overseas markets. We provide project planning, design, consulting and construction of the communications network and integrated network outsourcing services for overseas telecommunications operators through independent bidding and joint bidding with equipment manufacturers. We are now focusing on market expansion in Africa, the Middle East, Latin America, Hong Kong/ Macau and Southeast Asia.
Does the Company provide share options to its employees?
As a long term incentive and based on regulation of the government, our company adopted a share appreciation rights (SAR) scheme, aiming to align the interests of target employees with the company and to enhance the value of the company and its shareholders. Under the scheme, a SAR constitutes the right to receive an amount of cash equivalent to the appreciation, if any, in the fair market value of a H share of our company and the exercise price of the SARs is determined upon grant according to a pre-set method. No shares will be issued under the scheme; accordingly, the shareholding of the shareholders of the company will not be diluted by any grant or exercise of SARs.
