1ChinaMarketResearchApril1999**BroadbandNetworksSecondTierMarketFinalReport2Section3:Marketlandscapeof2ndtierSection4:CATVandtheirbusinessmodelSection5:CompetitivearenaSection1:BackgroundandapproachSection2:ExplanationBackgroundandapproach4BackgroundandapproachResearchtargetsandgeographicResearchtargetsandgeographicThefocusofthisresearchisonthe2ndtiermarket,therefore,wehaveintentionallykeptourselvesfromthewelldevelopedregionsalongthecoastandthoseinthesoutheastafterconsultingwiththePBNteam,forbothteamsbelievetheyarealreadytoodevelopedtoreflectwhatisgoingoninthe2ndtiermarket.Ourprojectandfieldworksconcentratedmainlyonthesouthwest,northwest,northeastaswellascentralChina.WiththehelpofthePBNteam,wetargetedsomemid-sizecities,countiesandsmallcities.Thenumberofhouseholdsinthesecitiesorcountiesgenerallyisintherangeof25,000to200,000.NotthetargetNotthetargetregionsforthisregionsforthisresearchresearchFirsttierSecondtierThirdtierCountyMidcitySmallcityBigcityRuralSource:PwCChinamarketresearch5City/countytargetsCity/countytargetsBackgroundandapproachLiaoyangLiaoyangHaichengHaichengAnshanAnshanXinpingXinpingSanyuanSanyuanXi’anXi’anTonghaiTonghaiErshanErshanYuxiYuxiXiangfanXiangfanLaohekouLaohekouZaoyangZaoyangNorthNorthWestWestEastEastSouthSouthMid-sizeorsmallcityCountyandcounty-levelcitySincethecountiesandtownsinthesoutheastarerelativelymorewealthy,therefore,theirdemandforCATVequipmentmaybesimilartothefirsttiermarketcities,PBNandourresearchteamdidnottargetanycounties/townsinthisregion.Thefourareaswetargetedduringthefieldresearchhavealmosthalfofthecountry'spopulationand43%ofthetotalincome.Source:PwCChinamarketresearchInterviewquality:AllintervieweeswereeitherheadsorchiefengineersofthelocalCATVstations.OurimpressionwasthattheirknowledgeontheCATVdevelopmentintheoverallChinesemarketwasnotasgoodastheintervieweesinthe1stmarketstudy.However,theirviewsareprobablyafairreflectionofwhatorhowtheCATVoperatorsthe2ndtiermarketseetheirmarket.LocationIntervieweepercentageNorthwest37%Northeast21%Southwest21%Central21%6TimescheduleTimescheduleBackgroundandapproachPH1PreparationdeskresearchdeskresearchPH1Preparationdeskresearchdeskresearch17Mar.~22Mar.23Mar.~25Mar.PH2FieldworkFieldwork&&DataanalysisDataanalysisPH2FieldworkFieldwork&&DataanalysisDataanalysisBeijingFentaiDataAnalysis&DesktopResearchFieldWork26Mar.~30Mar.31Mar.~7Apr.PH3DataanalysisDataanalysisandreportandreportPH3DataanalysisDataanalysisandreportandreport8Apr.~26Apr.PH4FinalreportPH4FinalreportPre-finalPresentationDraftReportRevisionFinalReport27Apr.28Apr.~30Apr.1May.Source:PwCChinamarketresearch7GeneralbackgroundonthetargetedregionsGeneralbackgroundonthetargetedregionsBackgroundandapproachRelativelythenortheastandnorthwesthavelowannualincomeandpopulationthanthesouthwestandcentralChina.Population&Income8.5%17.5%7.1%15.5%15.5%5.6%14.9%7.1%0%5%10%15%20%NortheastSouthwestNorthwestCentralPercentageofthetotalPencentageofthecountry'spopulationPercentageofthecountry'stotalannualincomeSource:PwCChinamarketresearchandyearbookExplanation9ExplanationTheremotetownsandcountieswetargetedforourprimaryresearcharelocatedinlessdevelopedandremoteareas,thelevelofinterviewees'professionaltrainingandknowledgeisnotasadequateasthoseinthemajorcities,notwithstandingtheirexecutiveormanagementpositions.Thetargetedintervieweesinthesmalltownsandcountiesusuallykno...