Virtual vs real as battle for talented staff starts in earnest
Although the battle between traditional Stateowned telecom operators and the new wave of virtual network operators most of which are private companies
is only just starting, the VNOs are already poaching senior managers and experienced staff from the established players.
The three State-owned telecom carriers China Mobile Ltd, China Unicom (Hong Kong) Ltd and China Telecom Corp Ltd have been losing key executives to upstart competitors.
The “brain drain” accelerated after the Chinese government issued licenses for mobile VNOs starting in December.
Those licenses let private domestic companies offer repackaged mobile services. Essentially, private capital has now officially entered the basic telecom services market to compete directly with traditional telecom giants.
Although several senior officials from the big three telecom carriers jumped ship to VNOs, Chinese media have focused on Li Gang, China Unicom’s vice-president. Li, who tendered his resignation on Feb 17, will leave China Unicom and join a small, Beijing-based VNO immediately.
China Daily wasn’t able to contact Li on Thursday.
But Wen Baoqiu, spokesman of China Unicom, said the company has no information to disclose at the moment. An official at China Unicom’s marketing department, who asked not to be identified, confirmed that Li had resigned. The official said Li is awaiting regulators’ approval for his move.
“Ever since VNOs started gearing up to offer mobile services, they’ve seen talent plays a critical role in winning the battle for the future.
“Telecom carriers happen to employ a lot of the experienced people VNOs need,” Xiang Ligang, a Beijingbased telecom expert, said.
Before Li’s departure, Zhou Youmeng, general manager of China Unicom’s marketing department, surprised industry watchers by leaving his post for the vice- presidency of Shenzhen Aisidi Co Ltd, a nationwide mobile phone distributor that’s received a VNO license.
He Ning, assistant general manager of China Telecom Terminal Co, resigned from his post and joined Funtalk China Holdings Ltd, another aspiring VNO.
It’s a rare scene in China’s telecom circles for senior officials of State-owned companies to jump to a private enterprise.
But VNOs usually offer sufficiently generous compensation to change that, said Kong Xiaoming, an analyst at Huatai Securities Co Ltd.
“Senior managers in Stateowned companies could earn much more in the private sector with their experience and their management and technological expertise,” said Kong.
Private companies need all kinds of talent to get a start, from product design to marketing to corporate governance, Kong added.
Wei Xiaokang, the partner of Beijing-based headhunting firm OfferCome, has some explanations for the flow of talent. Money tops the list.
The average annual salary at the Beijing branch of China Mobile has stayed at 120,000 yuan ($19,725) to 130,000 yuan for the past decade, said Wei.
“This once-decent salary is no longer attractive at all, when they could secure at least a 30 percent increase from a private company.”
When Li left China Unicom, his salary likely doubled, while Zhou, who joined Shenzhen-based Aisidi, is reportedly being paid 3 million yuan a year.
Kang Zhibin, executive president of Soshare Network Technology Co Ltd, a Beijingbased VNO, said his company will make the virtual network operation a strategic business in the near future.
“We are at the preparatory stage and have signed up more than 50 staff. But that is far from enough, so each of our departments is still soliciting talent,” Kang said.
Senior managers from domestic telecom operators will bring in networking resources, as well as years of experience to the new VNOs, according to Wei.
“All those contributions will help VNOs grow fast, develop a clear business vision and win larger market shares,” he said. Huang Yufan contributed to this story.