The company has just signed first phase of the contract. Right now AsiaInfo is in the delivery process for the first phase contract. The company already has a team working with the clients, working in the specifications for the second phase to go out. Security may not be in the second phase, but definitely will be in the future phase of that contract.
What’s your estimate of the market size of China’s Telecom Enterprise Software market in the first quarter 2007?
The management believes that the entire Telecom BSS market size for the entire year is roughly $400 million.
What are your estimates of the growth rate for that market in 2007?
There is a lot of uncertainty still related to the 3G license issue and if this uncertainty is resolved, the company believes the market should grow 15% to 20%.
How do you charge China Mobile on the device, handset device, and management? Is that a one-time R&D effort or do you actually charge them per handset received?
It’s not a per-handset received charge model. It’s based on time and material. But this kind of project is similar to the existing dealing in the CRM project and in the future there will be maintenance revenue, there will be upgrade revenue.
And for this phase of the development, does that cover certain provinces?
No, it’s only a headquarter centralized trial system. If it goes very well, it will go out to provinces because, as you know in China, China Mobile has a huge subscription number and one centralized system won’t be able to scale to support 350 million subscribers. In the company’s current design, China Mobile is going to be on two levels, the Centralized level and the Provincial level. In the first phase, AsiaInfo is helping them to build and trial the headquarter system.
Is it fair to assume that that could turn into a major contribution to your revenue in the future?
If this system floats out across the provincial subsidiaries, there will be a major market opportunity for AsiaInfo and the management has expectations for this new solution.
Regarding the Push email with China Unicom, do you expect that China Mobile will launch a similar product and you will be helping them to do that?
China Mobile is already working with Research In Motion to deliver the Blackberry service in China. So AsiaInfo is not involved in providing Blackberry type of Push email services with China Mobile.
It is said that China Mobile may have a lower cost version of the email system. What is your comment?
The company is involved in providing the email platform to China Mobile, but it’s not in the enterprise push mail market. In China Mobile they have two barns for their mail services. One is for targeting enterprise product customers for the push mail. Even for push mail, they have the high-end that AsiaInfo is in, which is the Blackberry, and the low-end that AsiaInfo is in, which is provided by another company. But AsiaInfo is providing the email target in the non-Push mail market.
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