Management changing in PCCW

Innovation North – The Faculty of Information and Technology


A successful management of change is crucial to any organization in order to survive and achieve in the present highly competitive and continuously evolving in the business environment.

Today, business as usual means business that is constantly changing. Changing in workplace, economy, Changing in technology, global economics expansion, changing in workforce diversity and many other factors are having a major effect or impact on business environment.

Deciding to choose the method of organizational change management for the change process within your business comes with many benefits. Organizational change management uses the type of structure that prevents resistance, and, therefore, prevents failure of the project itself. All too often business implement change without any type of plan or communication to the parties affected by the change. This, in turn, is the major cause of a project lacking in the significant factors needed for success.


Pacific Century Cyber Works Limited (PCCW)

PCCW was Hong Kong's dominant telecom operator. The group successful merger with Cable and Wireless HKT (HKT founded in 1925) In August 2000, Initially, Singapore telecom (Singtel) discussions with UK-based Cable & Wireless for a proposed merger with HKT Telecom. However, the sensitive telecommunications assets strategic were to make it political factors linked within the businesses in Hong Kong. It final failed in its efforts for merge HKT in result.

China's leadership clearly seems the potential ICT's offer to create a networked society and help leap frog China's development. (Dahlman and Aubert (2001) Would Bank, p.91)

PCCW had 16,300 employees and was one of the largest employers. It's headquartered in Hong Kong. (Company annual report, 2007)

Nowadays, PCCW maintains a presence and investment ICT market in Europe, the Middle East, Africa, Americas, and Mainland China. The Group has also established a solid reputation outside Hong Kong as a trustworthy partner to expanding business into global markets. To acuminating in an annual turnover of HK$20581(million), and profit margin was 8.925%

(Source: Company annual report 2004-2007)

SingTel owned by Temasek Holdings (government of Singapore, source:

Drivers and Inhibitors of Change-Telecommunications Management

Throughout its history, Hong Kong has been a highly competitive and open economy.

In year 1998,the regulatory framework governing Hong Kong's telecommunications sector currently adopts an open market approach. The telecom franchise was expired. New companies were allowed to provide local fixed telecommunication and overseas IDD services on a competitive basis in the telecom marketing.


Regulatory governance and new Competition

Except the regulatory governance, there were a few external and internal factors are competition and regulation, telecom policy, economic regulation must review of global models.

New competitive can be share a benefit from a old monopoly telecom company. Competition is extremely fierce in the market for cellular phone services-there are no less than six operators and 11 networks until years after Hong Kong government open the telecom investment marketing.

(source: 1999)

Global trends in the telecom industry.

Since after years 2000, as the advance of technology, The telecom services not only provide the tradition voice communication. They understanding of the critical importance of information and communication technology (ICT) in today's business environment. The new emerging technologies and standards, the services convergence of wired and wireless technologies and the content paradigm. So, an appreciation of information and communication technologies industry were a trends and challenges by PCCW.

Internal Driver of Change- Telecommunications Management

PCCW's competitive position improved after the government gave it a new operating license in that let it shed its dominant operator status which had restricted its ability to compete on price. PCCW had over 16,300 employees, and was one of the largest employers in Hong Kong. The Competition is extremely fierce in the traditional telecom market and In order to deal with the challenge due to aggravated market competition and development of information technology. It resulted the company lost a a lot of inherent income in tradition telecom voice/ IDD marketing.

PCCW was a large amount of budget spends on their employees. For saving the cost on manpower. Finally, PCCW decided to manages the business and operation of a full spectrum of telecommunication products, ICT solutions and contact center outsourcing business for the enterprise and wholesales customers in Hong Kong, the mainland and overseas. Its key business activities including:

-Commercial fixed-line and IDD services

-Broadband services

-Local data services

-Commercial mobile services

-Enterprise systems and solutions

-Contact center services

(Source: Company annual report 2004-2007)

PCCW manage an appreciation of strategic, operational and management skills needed to adapt to a rapidly changing telecom environment.

External inhibitors and internal inhibitors of change- Telecommunications Management

Outsourcing is an alternative method or strategy of PCCW management to fit and suit the organisational size and budget, which the responsibilities are transferred to the outsourcing firms. At present, outsourcing is very popular in the business, companies, including state-owned enterprises-Hong Kong government. Where the organisational

Objective is focusing on the core competency jobs, while non core competency jobs are outsourced in order to decrease the operational cost and size while increasing the organisation's efficiency and effectiveness in the administration of the organisation. However

Outsourcing or downsizing will probably lead a wave of unemployment. PCCW is a “big 4” employers in Hong Kong. Moreover, Due to the ccompetition is extremely fierce in the traditional telecom market. Outsourcing is a one solution to decrease the opertaional cost in PCCW.

Internal inhibitors of change

The attitude of people against companies that outsource is generally bad because current employees in the company that outsourcers may feel threat due to outsourcing and may not work properly. They also fear lost their job. Increase their workload,

The model used to identification/ evaluation of effectiveness.


Industry and competitive analysis for the any product for the supervising, accessing and propagating information from the exterior and interior atmosphere through admiration of the product. The way to perform to examination is to initiate with the environmental scanning using a SWOT analysis, SWOT is an ellipsis used to explain exactly in strengths, weakness, Opportunity, and threats.



Dominant position in Hong Kong.

PCCW is one of the leading broadband, mobile, fixed phone, media, and ICT solutions Provider Company of Hong Kong.

n It provides different telecommunication, media and ICT services in more than 1000 cities of over 80 countries in the world. It has 2.5 million fixed line customers, almost 2.3 million pay-TV customers, and major share in Hong Kong's mobile market.

n It is a very diverse product portfolio, the diversified presence in major cities, for example: Europe, Americas, Africa, Middle East and China.


n It doesn't have a uniform marketing strategy in different countries.

n The competitors companies are also a big company who has a huge subscriber's base and it is not easy to penetrate and capture the due sharing on market.


n Reorganization and quality update of the product.

n It also can distribute its advertisement through new channels Internet, Pay-TV platform.

In the service offers, it can offer different discounts to people. Offer fabulous incentives to people using that specific product. PCCW also can expansion services in different cities in the world.


n Lost customer to other telecommunication company.

n Losing the less beneficiated as a customer or members those like but cannot afford the

Leisure for the particular telecommunication products.

n Risk of losing people that are choosing away the particular product

n Financial Issued over the world


Data collected from the primary and secondary sources can be analyzed using PESTLE tool while the study case presented in the Literature review sector can be analyzed using PORTERS tools. With the help of PESTLE analysis tools, we can analyze the political, Economic, social, Technogical, Legal and environments factors in ICT, mobile communication or other telecommunication products. For case study analysis, we will use PORTERS analysis tool.

According to this tool, the five forces used to determine PCCW business competitiveness.

1: Supplier Power: It is not easy for PCCW to drive the prices of mobile subscribers higher because the competition in marketing, new entrants emerge with lower subscription rate. Such situation it is not possible for PCCW, If it wants to remind in the competitive market, to increase the call rate or subscription prices.

2: Buyer Power: As the market of mobile telephony expanding, mobile service provider also increase, new entrant enters with relatively low rates of calls and subscription. Thus the real power of driving the prices of mobile phone down is in the hands of mobile phone subscribers.

3: Competitive Rivalry: In the mobile marketing, good relations with competitors help forestall uneconomic price, and raise the level of competition.

4: Threat of subscription: subscription of PCCW services although not impossible due to so many mobile phone provider in the market. It is difficult to substitute because of its competitive new packages and relatively low rates.

5: Threat of new competitors: It is not only PCCW. Other mobile phone service providers also face this threat. New competitions continuously emerge but these are not a severe threat for PCCW.

Evaluation of effectiveness

Measuring the extent to which targets are being met, detecting the factors that hinder or facilitate their realization. It also involves establishing cause-effect relationships about the extent to which a particular policy produces the desired outcome. Also called summative evaluation.

PCCW are facing shrinking capital budgets during this economic slowdown and competition is extremely fierce in the telecommunication market. PCCW decided to manages the business and operation of a full spectrum of telecommunication products, ICT solutions and contact center outsourcing business for the enterprise and wholesales customers in Hong Kong, the mainland and overseas. Its key business activities including:

Commercial fixed-line and IDD services

Broadband services

Local data services

Commercial mobile services

Enterprise systems and solutions

Contact center services

As PCCW their goals have been established, a thorough cost-benefit analysis should be conducted for identify all internal and external service costs and benefits to make an effective and reasonable comparison in company.

Quantitative and qualitative measures are essential to determine the full impact of the staffing choice. Prioritizing objectives and identifying measures are essential to project success because they influence the costs and benefits of staffing decisions. The staffing decision is based on the opportunity cost of using internal resources and the identification of needs and costs. It also relies on an understanding of the complete costs of an outsourcing engagement.

As I study on this project, I would undertake to use below step to analysis Identifying PCCW outsourcing

Decision Flowchart

Establishing Analysis Criteria

Cost-Benefit Analysis

Specific Cost-Benefit Criteria

Outsource What You Know

Decision-Making Bottom Line

Implementing Outsourcing Successfully

Establishing the Contract Measurements
Selecting the Vendor
Negotiating Outsourcing Contracts
Planning and Managing Transitions
Managing and Evaluating the Contract
Managing the Renegotiation or End of the Contract

However, it is not easy to obtain much information the evaluation of effectiveness on PCCW service outsourcing, to analyses PCCW current planning and budgeting processes, their principle of management and outsourcing strategies.

The company enjoys dominant position in the fixed line and broadband segments in Hong Kong.

The telecommunication services (TSS) segment of PCCW is the largest provider of fixed-line

Telecommunication services in Hong Kong. The market share of TSS in fixed lines was approximately 67.5%, representing 69% of business lines, and 66% of residential lines. The broadband network of the company is able to serve 95% of homes with broadband services and all major business areas in Hong Kong. The number of direct exchange lines and broadband exchange lines operated by the company was 2,587 thousand and 1,117 thousand, respectively. Dominant position in Hong Kong fixed line market provides its operations with a strong brand identity and the ability to enter new markets.



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