Mr.

Q1. How successful has SUNDAY's branding strategy been and what are the contributing factors?

SUNDAY's corporate strategy was Ð''to capitalize on the convergence of wireless communications and Internet technologies to develop wireless applications and services targeted at consumer lifestyle'. Based on this corporate strategy, SUNDAY's brand was built on the concept of a lifestyle, a relaxed attitude towards life. The brand strategy was described as Ð''irreverent', hence innovative, being a challenge to the status quo and traditions with a youthful appeal that aimed to aspire all ages that were youthful at heart. SUNDAY chose to portray a relaxed lifestyle in order to penetrate the mass market. This branding strategy has been very successful with proof of this success being SUNDAY's multiple awards that recognized them for being value for money, good roaming coverage and excellent service features. All this has resulted in SUNDAY's advertisements having the highest recall rates in 1999. Moreover, the brand Ð''SUNDAY' did not have a Chinese name and hence exuded a more international appeal from its customers who placed more confidence in international brands. This name also allowed them to go across geographical boundaries, which was in line with their objectives of regional expansion.

Q2. Define a strategy for SUNDAY to target overseas markets in Asia, with due respect to the issuing of 3G licenses

SUNDAY can leverage its strong brand position abroad. Simultaneously, SUNDAY should continue to improve their efficiency in order to reduce their operating cost. They should also increase their network and add more cell sites to improve their quality. SUNDAY as in 1999 is still in a net loss position and getting more loan may be difficult and not a good idea. So strategy for SUNDAY to go abroad is to find an offshore partner who has a very strong financial position to help out with the financing of 3G through acquisition or joint venture. SUNDAY should also look for partners who have world wide resources, high quality, reliable network and strong in technology development. This will provide a platform for SUNDAY to penetrate overseas markets in Asia easier. One candidate for target partner can be a strong domestic player in China since potential growth in China seems to be very favorable with internet users expected to reach 80.5mn in 2003 vs. 7.5mn in 1999. Asia Pacific is expected to become the third largest regional 3G market by 2010 (Source: Gartner Group). China and India looks the most promising in term of estimated subscriber base growth.

Q3. With the imminent granting of the 3G licenses by the Government, what is the financial impact on SUNDAY?

Building a platform in 3G requires a very high investment, projected investment estimated to be around HK$43mn. Sunday revenue and EBITA has shown significant improvement over the years but in 1999 the company still has a net loss of HK$747mn and expects to break even within 2001. SUNDAY may have to take a big loan to finance 3G (increasing its debt/equity ratio) but that is quite difficult, given that SUNDAY still has not break even yet. Another option would be to do a JV or partner up with company with stronger financial performance in the region who will help them finance the 3G investment. Acquiring 3G license will also help SUNDAY expand into other Asian countries. This will allow SUNDAY to grow their subscriber base faster and have more competitive packages, thus increasing their revenue and EBITA.

Q4. Summarize SUNDAY's marketing strategy up to year 2000. What have been its strengths, weaknesses, opportunities and threats?

SUNDAY positioned itself using the slogan used Ð''feels like SUNDAY' to capture its Ð''lifestyle' concept. They spent a significant 22% of their operating budget on their sales and marketing campaigns in an attempt to launch their brand to penetrate the mass market. Aggressive marketing promotions were used to market its brand including innovative and creative advertisements on television, in newspapers, in magazines and at MTR stations. SUNDAY uses alliance marketing and joint promotions with companies (e.g. Saltimbanco) which has similar Ð''unconventional' image. They also developed unconventional advertisements and commercials that aimed to carve out a competitive niche.

Strengths: The Ð''lifestyle' concept was the first in the market and allowed SUNDAY to position itself differently from its big competitors. SUNDAY's advertisements and commercials created Ð''buzz' that results in the highest recall rates. The focus on building Ð''brand' as key success factor allowed them to leverage on brand equity in future expansion.

Weakness: The use of aggressive promotions to increase recall rates does not seem to translate into substantial increase in market shares and revenues. SUNDAY's marketing strategy is very good at attracting new customers but fails to implement a clear customer retention program. Use of unconventional advertisements is costly and impacts heavily on SUNDAY's bottom-line.

Opportunity: SUNDAY can tap more into Ð''lifestyle concept' through creating online interactive websites which links customers with SUNDAY. Customer loyalty will increase as customers relate themselves with the online communities. More below the line marketing can be used such as events and games to encourage more customer trials and experiences.

Threat: Competitors who spend less on marketing budget are putting efforts on expanding their distribution channels. Competitors are also targeting older