Chengdu Telecom Cost Management Efficiency And Improve Research

In recent years, after China entered WTO, and as the reform of telecommunication institutions deepens, the competitive environment in telecommunication market gradually comes into being. After a series of substantial structural reforms, China Telecom is ready to be confronted with challenges from both domestic and foreign markets, together with other major competitors in China. Chengdu Telecom is the branch of China Telecom in Chengdu. In the fierce competitive market, in addition to maintaining its current market share and increasing total revenue, this company has to seek maximum economic profits, in the sense that it has to guarantee the maximization of capital income to support its long run growth. Chengdu Telecom has to take the all above questions into consideration seriously. Besides, questions as how to improve management skills to adapt to environmental change, how to conduct beneficial reforms in financial management system, and how to impose strict cost management should also be of interest to employers as well as employees in this company.The predecessor of Chengdu Telecom is Chengdu Telecommunication Office (CTO). As a combination of profitable and non-profitable organization, CTO was not only the monopoly, in charge of all telecommunication and information service business in Chengdu area, but also shared some administrative functions, such as offering general communication services, subsidizing post office, and providing free confidential telecommunication service to the government and the military units. The operation goal of CTO was more concerned with social benefit, such as whether it had met the requirement of thegovernment, in the aspects of its total revenue, its capital assets scale, its telephone coverage rate etc. However, CTO ignored most important goals, such as financial benefit increase, profit maximization, cost control, and investment benefit analysis. The extensive management style as well as multi operation goals formed under CTO still influence Chengdu Telecom nowadays to a great extent.Today, Chengdu Telecom has finished its privatization reform, and changed its name to Sichuan Telecom, Chengdu branch. It has improved its management and increased its profits. However, as monopoly becomes history, it faces intense competition in its various business. Compared to competitors, Chengdu Telecom has lower profits. A main reason for this is that, while struggling for development, Chengdu Telecom does not pay enough attention to cost management, thus falling far behind in this. Moreover, Chengdu Telecom is expecting its oversea IPOs in the near future, thus cost management becomes vital for satisfying foreign investors' requests for capital returns, and even for company's survival. Our urgent task is to improve cost management.As an employee of Chengdu Telecom, the author has made rigorous analysis of this company, using cost management theories, combined with his own experience, and suggests solution to existing problems in order to improve its cost management.