Data-Driven Operation Services
We have in recent years provided comprehensive data-driven operation services to telecom operators and their government and enterprise customers. Through the data-driven operation platforms we have developed, these services enable telecom operators and their government and enterprise customers to conduct real-time, in-depth analysis of user purchasing and consumption patterns,characteristics and lifecycles and design and implement marketing campaigns and management activities accordingly, which in turn help them increase sales, operational or management efficiency and customer value and build innovative big-data oriented business ecosystems.
We believe we are well-positioned to provide data-driven operation services to telecom operators and their government and enterprise customers leveraging the extensive technical capabilities and industry insights we have accumulated over years of collaboration with telecom operators. We have developed hundreds of big-data based models and algorithms, including cluster analysis,customer behavior prediction, critical factor analysis and semantic recognition that have been widely applied in various operational scenarios and continuously improved and upgraded. These advanced models and algorithms, combined with emerging technologies including AI and machine learning, as well as telecom operators’ existing big data capabilities, enable intelligent application of data across telecom operators’ or their government and enterprise customers’ various departments and domains.
As we accumulate more data-driven operation experience, we are also actively exploring collaboration opportunities with enterprise customers, such as automobile manufactures, in this area. In August 2018, we entered into a strategic cooperation agreement with China Merchants Bank Co., Ltd.to provide financial service sector-oriented data-driven operation services to China Merchants Bank Co., Ltd., further expanding the enterprise customer base of our data-driven operation services.
We provide data-driven operation services through data-driven operation platforms we have developed according to telecom operators or their government and enterprise customers’ operational or management needs. Telecom operators or their government and enterprise customers’ staff can conveniently access our data-driven operation services through a user-friendly web interface anytime,anywhere. We also provide onsite, 24/7 operational support when needed.
Our data-driven operation services generally adopt a pay-as-a-result model, under which our customers pay us based on business results, such as increase in monthly data usage and number of new subscribers every month. See “—Operational Support Agreements” for more details. As a provider of data-driven operation services, we deploy our data-driven operation platforms on telecom operators’ private clouds and conduct data authority control and data security audits in strict compliance with the relevant laws, regulations, data security management protocols and processes to ensure the legality and security of user data privacy. We have taken various measures to ensure the security of the customers’ user data which we have access to during the provision of our data-driven operation services: (i) we strictly comply with confidentiality clauses in our agreements with customers, (ii) each of our employees working onsite at our customers’ premises have signed confidentiality undertakings to keep confidential of the personal information they have access to, (iii) each of our employees have signed confidentiality and non-compete undertakings, which provide that they shall strictly adhere to confidentiality policies of our customers when working at their premises, (iv) all user data are processed at our customers’ premises or locations authorized by our customers, (v) we have desensitized all user data we use when providing data-driven operation services, and (vi) we strictly comply with data security related laws and regulations as well as telecom operators’ data/information security protocols.
Our operations products
Our data-driven operation services are typically provided through data-driven operation platforms we develop for telecom operators. These platforms are developed by adding specific features or functionalities to products from our operations product line. The following table sets forth details of our operations products:
|Major product categories||Functionalities|
|Smart Sharing (智享)||Data-driven operation platform products that enable real-time analysis of demographics statistics, abnormal event monitoring, financial statistics analysis and emergency response services and other functionalities|
|Smart operations (智營)||Supports scenario-based marketing, enables users to quickly design implement marketing campaigns through a user-friendly web interface, improves sales staff and sales channels’ operating efficiency|
|Smart store (智店)||Enables retail operations using data mining technologies|
|Smart Info (智信)||Supports a complete WeChat integration for telecom operators and enterprises’ businesses to provide various digital services to end users, such as inquiry, payment, processing and redemption|
|Smart Connection (智聯)||Enables Internet of Vehicles data monetization, including establishing connections between vehicles and the Internet, connects enterprises and customers and customers and services, closing the loop of Internet of Vehicles ecosystem|
Operational support agreements
We generally enter into one-year operational support agreements with our customers for our data-driven operation services, which are generally based on the customers’ standardized form and include the following key terms:
• Duration. Our operational support agreements with our customers generally have a one-year term and are renewable upon mutual agreement.
• Scope of work and performance targets. The operational support agreements specify our responsibilities throughout the contract period, the composition of our project development teams and the level and scope of data-driven operation services we will provide (for example, whether we will be developing new operations platforms or provide any onsite operational support). The agreements typically provide for monthly or quarterly performance targets, such as (i) number of new subscribers, (ii) number of transactions,and (iii) quality of onsite operational support services. Failure to meet these performance targets will result in a corresponding price reduction for our contract price, based on aprescribed formula in the agreements.
• Pricing, credit and payment terms. he contract price of our operational support agreements is generally paid in quarterly installment, with around 60% of the contract price paid to us as a fixed rate and around 40% of the contract price paid to us based on our completion of the monthly and/or quarterly performance targets. We generally grant credit terms of 30 days to customers of our data-driven operation services.
• Termination. Our operational support agreements may be terminated by either party upon the occurrence of certain specified events, such as a force majeure event.
End User:A government and enterprise customer of China Mobile Beijing subsidiary in the public security sector in a district of Beijing
End User's Primary Needs:To analyze passenger flow, monitor traffic hubs and manage floating population and resident population within district, facilitate interaction between the police and the public.
Our Data-Driven Operation Services:We have built a public security-sector data-driven operation platform for China Mobile’s Beijing subsidiary using “Smart Sharing” platform product from our operations product line. Leveraging China Mobile Beijing subsidiary’s big data capabilities, we provide data-driven operation services to the end user through this platform, primarily including(i) real-time analysis of the population distribution, mobility and clustering patterns within the district, provides data support for deployment of police resources and investment in public security and improve the end user’s internal operation efficiency, and (ii) real-time analysis of major traffic hubs and tourist attractions’ passenger flow during the holidays.
Results of Data-Driven Operation Services:our data-driven operation services effectively improve the end user’s capabilities in the analysis, aggregation and visualization of massive amount of resident data, help the end user conduct more effective administrative management (such as floating population management) and abnormal event monitoring, provide smart community services,improve operational efficiencies and achieve cost saving. For example, after using our data-driven operation services, the end user receives over 30 types of up-to-date demographics statistics of the entire district every ten minutes, which eliminates the need to conduct annual household surveys to obtain the district’s demographics statistics.
End User:China Mobile Yunnan subsidiary’s subscribers
Our Data-Driven Operation Services:We have built a data-driven operation platform for China Mobile Yunnan subsidiary using "Smart Operations" platform product from our operations product line, which is integrated with China Mobile Yunnan subsidiary’s big data platform. We have been providing data-driven operation services through this platform, including, among others, technical support, sales channel management and upgrade and marketing campaign management and optimization, to provide more personalized product and service recommendations to end users.
Results of Data-Driven Operation Services:With our data-driven operation services, China Mobile’s Yunnan subsidiary is able to conduct precise marketing through its online and offline sales channels to, on the one hand, provide personalized product and service recommendations to end users and on the other hand, adjust products and services’ target end user groups in real-time based on user feedbacks, ultimately increasing its sales, operating efficiency, market share and customer satisfaction.
End User:China Unicom Tianjin branch’s subscribers
Our Data-Driven Operation Services:We have built a data-driven operations platform for China Unicom’s Tianjin branch using our “Smart Info” platform product from our operations product line,which is integrated with China Unicom Tianjin branch’s big data decision center. We provide datadriven operation services through this platform, primarily including WeChat Store basic inquiry,payment and processing services, matrix management of multiple WeChat official accounts,message template publication, marketing event management, data analysis and operational support.These services are designed to increase the WeChat official accounts’ number of subscribers,subscriber activity level and number of transactions, making WeChat a major online sales channel of China Unicom Tianjin branch.
Results of Data-Driven Operation Services:Our data-driven operation services has increased China Unicom Tianjin branch’s number of new subscribers and transaction volume. For example, after using our data-driven operation services, China Unicom Tianjin branch’s WeChat official accounts’ number of new subscribers in the fourth quarter of 2017 increased by 180% compared to the same period in 2016.