LCE Presentation 2007

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Project Review of “3” Handset Warranty and Maintenance Services Centre 2006 - 2007

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Content Background Quick-view of Services & New KPI Difficulties in business Vendors Performance Quotations Sharing of Difficulties P&L Business Opportunities

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Background HTHK appointed LCE Ltd. for the provision of the Services to the Customers in Hong Kong and effective the service commenced on 1 Feb 06. Regarding HTHK service business plan, they forecasted their service migration volume to LCE of Defective Trade in (DTI), Enquiry (ENQ) and Normal Repair (NR) jobs to have a min 2500 – 3000 of DTI and NR + 1200 of ENQ jobs. HTHK expected the migration service to have a 15% growth in 2007 vs. 2006.

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In the business started, LCE made an offer of employment to HTHK existing staff for supporting in “3” Service Centre. Employed 6 of experienced staff to maintain “3” service in Feb 2006. Expand touch Centre (16,52’ sq. fts. at 1105c) in May 2006 to cater the incident of Nokia N6280. In May 2006, LCE was staffed with 11 staff to support for “3” project. Further expand touch Centre (another 1,035’ at 1105c) in March 2007 (totally = 3,837’)

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Overview of changing from 2006 to 2007 Actually, the repair jobs plunged to less than 1700 in 2007. HTHK raised out to contact review in the meeting on May 07.

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Review 3HK Repair Volume 2006 - 07 Downtrend of Repair Volume – with less than 1,700 jobs in 2007

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Quick-View of “3” Services “3” Customer “3” Handset Warranty & Maintenance Service Centre Provide Service to customer according to HTHK Service procedure DTI Service Technical Enquiry Normal Repair

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All the “3” customer who request for DTI, NR and ENQ service they need to get us a series of checking step. 1. Through supporting document Check information for each maintenance order by customer provide document such as 3 customer name, mobile number, purchase date, account activation date stated in SSA. Based on customer provided information to classify what kind of customer request service. 2. Through mobile network Use mobile access code .key in *231, to check customer mobile account status 3. Through HTHK system Check Hardware identification no., Model name etc. via VPN linkup HKHT system 4. General inspection of products Verify product no physical damaged, wetting and dropping occurred. Checking handset according to customer mentioned. Verify product appearance no serious scratches occurred. Inform to customer repair charge if damages was found. Quick view of “3” service centre workflow * Info. Checking in front counter

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5. DTI When product was verified with fault and identified to DTI handling, the faulty unit will be replaced a new one to customer. 6. Normal Repair When product was verified with fault but identified to DTI handling, the faulty unit will be sent to vendor for repairing. 7. Enquiry service When customer want to enquiry about product feature, setting etc., our professional will provide a Technical support service to customer instantly. Customer always make an enquiries of product about Blackberry repair services, product function and feature usage, GPRS/MMS account setting, devices connectivity such as phone to PC, phone to other wireless device, 3G home monitoring device setting or 3HK mobile service, E.g. X-series, i-mode, Mobile-TV etc.. Quick view of “3” service centre workflow * Major service

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Quick view of internal works in “3” service centre Inventory control – To keep an accuracy and sufficient stock level, arrange faulty units delivery schedule to vendor. Customer Enquiry hotline – To handle customer enquiries and complaint by the phone call or email. Delivery of faulty units to vendor - Send/Collect service centre replaced unit to vendor daily. Quality Assurance - All of return and repair units from vendor need to be performed quality checking before return to customer.

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Quick-View of “3” Services – Organization Chart Oscar Chan Centre Manager Martin Au Assistant Centre Manager Jacky Boo Technical Supervisor Zoe Chan Operation Executive Paul Lo Sr. Tech Jeffrey Tsui Sr. Tech Edmond Ng Sr. CSO Ben Tang Tech Patrick Lam Tech Vincent Ngan CSO Albert Kwok Tech Toby Lau CSO Fanny Lee CSO

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HTHK request to review KPI

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Vendor Performance Summary 2007 – Repair TAT Difficulties in business - Vendor performance

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Difficulties in business - Vendor performance The turn around time of vendor return to LCE is within 7 days. Most vendor can not met the service standard, Link tech (SamSung) especially. The longest day of return unit is 120 days. Around 1~2% vendor return units need to resend for refurbishment. It seems to lack of notify to vendor by HTHK that appointed LCE for provision of “3” service.

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Difficulties in business - Quotations Accumulated Quotations (as of Aug 07) Mofree : $42,658 McFounder : $31,749 TSL : $200 Total : $74,652 Hutchison firstly try to avoid,.. but insisted to charge to LCE in the stock return in Sept 2007.

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Sharing of Difficulties Internal System Support Different work-order flows ( DTI, Normal Repair, Enquiry) – System enhancement done Not fully fit for vendors’ TAT monitoring – System enhancement done Difficult on stocks management for different scenarios (e.g. no fault report for accessories for DTI/ NR delivery, monitoring stock status, outstanding units from vendor etc.) – System enhancement done Accessories and chargers cannot be input in the same order - System enhancement done

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Sharing of Difficulties External System from “3” VPN Each order need to be confirmed by SSA and match with “3” System information, but many cases cannot be searched from “3 System” due to record update time-gap by Hutchison etc. Because of the HTHK system limitation, we need to spend 2~3 manpower each day for checking customer information and follow up those amendment orders at the day-end. When entry to “3” system, Internal system and outside communication will be blocked Waste more time to verify HKHT customer and create a customer order.

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Sharing of Difficulties Extra Reports Need Heavy Manual Work Daily fault symptoms analysis for all hit models QC reports for vendors Daily Activity report Daily outstanding report Certificate of IMEI exchange Vendors TAT Reports Transaction summary for all hit models Customer call lists for ad hoc projects >> Spent at least 0.5 manpower to handle per day >> Further review with Hutchison & have automation by system

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Sharing of Difficulties People Competency Multi-skill to handle front-counters, technical support, logistic operations Enquiry Calls & Emails Around 30 – 40 emails/ day and 40 – 50 telephone calls / day from “3” for checking stocks, order status and referral for special cases and even IMEI exchange records. >> Spend 1 manpower/ day >> Further discuss with Hutchison to review enquiry charging mechanism

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Sharing of Difficulties Hutchison will charge admin fee from LCE Hutchison found the returned buffer units are not good units and should be charged the admin fee. QC should be handled by LCE. Agreement is not included. The roles is not clear both LCE and 3 Hutchison.

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Other Hutchison Business Opportunities - Trade-in / Migration >> Pricing cannot be compromised so far. Economic of Scales 3. Expand Our Business / Multi-brands - Cross-sell “touch” devices (explore touch products to match with other brands?) - Re-visit the overall strategy & business direction is required. Business Review

Improvement Actions: 

Improvement Actions 1. Enhance System Facility - Undergoing Streamline operations with system review and enhancement 2. Skill Enhancement – Undergoing Soft-skills Training (Communication skill & Stress Management) - Done Cross Training to have pool of manpower for different jobs natures Incentive scheme to in line with actual needs 3. Functions Restructure - Done Review existing procedures and clearly allocate different functional teams for QC, Complains and logistics at the Centre 4. Review with Hutchison – Undergoing New sales/ business opportunities

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End of Presentation