Vodafone Turns EastQuestion 1. How has China’s entry into the WTO affected Vodafone’s development in China and Hong Kong? How has it affected foreign telecommunications investment in general?
Answer: In 2001, after practicing a policy of protectionism, China entered into WTO with the aim to uplift its international trade. Also according to WTO treaties Hong Kong became a member of WTO in its own right despite being a Special Administrative Region (SAR) of China. At the same time of entry of China into WTO in 2001, Sir Christopher Gent, the CEO of Vodafone at that time, announced their expansion plan into Chinese market and opening of new offices in Beijing and Hong Kong. They formed an equity alliance with China Mobile Hong Kong Limited (CMHK). For this alliance Vodafone initially purchased 2.19pc stake from CMHK at a cost of $2.5 bn. The stake was increased to 3.2 pc in 2002 by purchasing further shares worth of US $ 750mn. Because of this alliance and Vodafone’s strong international strategy and technologic expertise made CMNK strong and have brought new opportunities. Companies such as China Unicom etc. faced enormous competition and had to change their strategy.
The Globalization of Consumer Services: In the US, Consumer Services is a global phenomenon. Consumers are demanding more information by more services. While a lot of media reports do not mention any of this in detail, a broad public discourse has been created about consumer services in the world. Consumer advocates have been demanding that we bring more and more consumers to the service of our business and this has led to the emergence of new consumer groups in the US: Electronic Privacy Information Network (EIPN), Consumers’ Advocacy Network (CNA), Consumer Advocacy Union (CRU), Consumers’ Advocacy Network (CARS) and Internet Services Providers Network (ISN). These groups represent over 60,000 consumers using over 40,000 internet devices.
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