Provincial Telecom Enterprise Claims Management

China Telecom Corporation has set up wholly-own subsidiaries in all provinces, the Autonomous Regions and the Municipal Cities in China. These provincial subsidiaries take the responsibility of expanding the service, constructing the network and serving the customers. With the increasingly intensive competition in the telecom market, the provincial subsidiaries are in a sorry plight, in which the increase of the new customers and new services is slow along with serious loss of the old ones.Therefore the provincial subsidiaries began to apply credit sales to develop new customers in order to expand the market and sales, and strengthen the competitiveness and power of the companies. However, along with the application of commercial credit, a series of receivables problems resulting from credit sales are more and more serious. The percentage of receivables to sales income is increasing year by year. Loss due to bad debt and bad loans grows. Since the product is telecom product, the fixed cost invested in communication power construction is far more than the floating cost invested in developing customers. Therefore, in the predictable range, the telecom products have a decreasing marginal cost and an increasing marginal profit. It is proper to apply credit sales in the buyer's market in which there is an intense competition of homogeneity. But it is undeniable that the provincial subsidiaries are powerless in managing the receivables.The author makes a research on receivables management theories and the operation procedures of Telecom Corporation, profoundly analyzes the present problems of managing the receivables in the provincial subsidiaries and their roots, and contributes some measures. He proposes that the provincial subsidiaries should make clear of the whole process of receivables management, set up a creditor's rights management commission and establish a credit evaluation and classification system. Some of the proposals are initiated by the author and are ready to be applied in some provincial subsidiary.According to the author, this research may be used for reference by China Telecom, China Netcom, China Railcom (these three focus on the immobile business). China Mobile and China Unicom (these two focus on the mobile business and prepare to enter the immobile business). Certainly due to the limited material and the rapiddevelopment of the telecom business, the ideas and measures hereby contributed should be improved constantly.There are seven chapters in the thesis. Chapter 1 introduces the background of the thesis, the present research results, the initiatives and the significance of the thesis. Chapter 2 gives an introduction of the system of companies, the characters of operation, the departments relevant to receivables management and their responsibilities. Chapter 3 shows the current situation of receivables management and analyzes the existing problems and their roots. Chapter 4 elaborates the popular theories on receivables management and systematically describes the whole process of receivables management. Chapter 5 gives some advice and measures about bettering receivables management in the provincial subsidiaries. It introduces in particular the establishment of a team and a credit evaluation system, and how to call up of the overdue receivables. In Chapter 6 the author proposes that the telecom companies should both manage well the rights as a creditor and perform the obligations as a debtor, so as to make the whole society in harmony. The last part is Chapter 7 in which the author makes a prediction on the prospect of the management of the debts and the rights as a creditor.