According to the news on April 27, AsiaInfo Technologies Limited (known as AsiaInfo, stock code: 01675.HK) issued an announcement a few days ago that it planned to issue 182 million new shares to China Mobile International Holdings, a wholly-owned subsidiary of China Mobile, accounting for approximately 20.0% of shares of the enlarged company. After becoming a shareholder, China Mobile will be the second largest shareholder of AsiaInfo.
After the announcement was issued, the background of the cooperation between China Mobile and AsiaInfo at the capital level, as well as the planning and adjustment in strategies and products of the two parties, became the focus of the industry. Gao Nianshu, the Executive Director and CEO of AsiaInfo, was interviewed by NetEase Technology to provide detailed answers to questions commonly concerned by the industry.
Strategic Investment for Strategic Synergy between Two Parties
Gao Nianshu said that China Mobile considers more than financial returns of strategic investment in AsiaInfo, and the most important reason is the strategic synergy between the two parties.
Gao Nianshu said that the CHBN strategy (consumer market, home market, business-government market, and new business market) is a brand new strategy for China Mobile which needs to be achieved by working with partners to establish an ecosystem. AsiaInfo is expanding from the former telecom business support system (BSS) to new business areas, namely: Network O domain (OSS field), digital operation (DSaaS), vertical industry and enterprise cloud. The strategies of these three new business areas are highly consistent with China Mobile’s strategy, which is the most important contributing factor of this investment.
At the same time, Gao Nianshu believed that both parties are highly complementary in terms of capabilities. Taking cloud computing as an example, China Mobile undoubtedly has strong infrastructure capability, brand advantage and customer acquisition capability, while AsiaInfo has strong capabilities in system construction (system platform construction of three domains of BOM), DICT market development, and data operation capabilities. Therefore, the cooperation between the two parties in the cloud computing market is worthy of expectation.
In addition, AsiaInfo has formed a deep and reliable relationship through long-term cooperation with operators, and can continue to provide operators with excellent business support services.
The Relationship with Three Major Operators Rises to a New Height
In addition to China Mobile, China Telecom and China Unicom are also long-term partners of AsiaInfo. After China Mobile becomes a shareholder, how AsiaInfo handles the cooperation with the three major operators is a topic generally concerned by the industry.
Gao Nianshu said that the three major operators are both competitors and partners. At present, regardless of competition or cooperation, the relationship with operators has risen to a new height. “The network is regarded as a lifeline by operators. The networks of operators have evolved from the interconnection in the past to the current co-construction and sharing. In terms of the business, in the past, they all followed their respective corporate standards, but now, they have developed to jointly release industry specifications.”
In terms of investment, the three major operators have many successful projects, but none of them have decided whether to conduct business cooperation based on investment. “BATJ (Baidu, Alibaba, Tencent, JD) participated in the mixed reform of China Unicom, but China Telecom and China Mobile have not refused to cooperate with BATJ. Similarly, the investment of operators in enterprises within the ecosystem has not affected the cooperation between these enterprises and other operators. AsiaInfo will continue to maintain an open attitude, and is willing to explore the cooperation with China Telecom, China Unicom and other operators at the capital level if there is an opportunity.”
Gao Nianshu said that China Mobile will not participate in or interfere with the production and operation of AsiaInfo after its investment, and AsiaInfo will continue to exert its flexible advantages in the operation of market-oriented mechanisms. At the same time, the company will not relax or reduce the service qualities and standards for China Telecom and China Unicom. “AsiaInfo has long adopted an independent division model, which has a strong firewall mechanism. People, systems, and customer data are completely isolated, and there is almost no transfer of personnel between different divisions. This is the standard and norm that AsiaInfo has established in the communications market for a long time. We will also continue to learn from the firewall isolation mechanisms of the four major audit companies and take stricter measures to protect the rights and interests of the three major operators.”
Furthermore, “AsiaInfo is willing to further enhance the depth and extent of cooperation with China Telecom and China Unicom at the market and technical levels on the basis of the existing extensive cooperation, as well as make commitments and guarantees on technology sharing, intellectual property sharing, information security and firewall mechanism.”
Create Another AsiaInfo in Five Years: Business Scale Expected to Exceed 10 Billion in 2024
Regarding the strategic plan for 2020 and the next transformation direction of AsiaInfo, Gao Nianshu stated that AsiaInfo hopes to achieve a business scale of more than 10 billion by 2024, “equivalent to creating another AsiaInfo in five years.”
Gao Nianshu said that there are three opportunities for AsiaInfo to realize the business scale of 10 billion. The first opportunity is to expand from a single business support system to the business system + network system, which just becomes achievable since the commercialization of 5G.
The second opportunity is vertical industry and enterprise cloud. Gao Nianshu said that AsiaInfo has penetrated from the single-operator market to diversified vertical areas. Postal service, transportation, finance, energy, etc. are all areas where AsiaInfo hopes to work deeply.
The third opportunity is DSaaS, that is, data-driven SaaS service. Through SaaS-based services, data can truly play a valuable role. Over the past few years, this business of AsiaInfo has almost doubled every year, and it is believed to continue such rapid growth in the future.