E administration 990126


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a presentation about the study on the information public private partnership WiFly, made in Macau 2010

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  • Why to write this topic? Government management and operation becomes increasingly complicated, especially during the time when public and private sectors cooperate in a variety of issues. The other factor challenges the nation states’ governance structure is ICT. Taipei’s WiFi network built-up started from 2004 exactly shows these how these two dimensions suture together. Therefore, I would like to examine this case regarding to the change in public governance, or new governance type, made by ICT development.
  • Taipei City Government, TCG, initiated a wifi network built-up plan in 2004, suggested by the Advisory Broad. The political background is then Mayor Ma Jing-Yeou, the current President of Taiwan, aimed to run the primary election after the Mayor’s term, so he and his team hoped to create policy success for the wider appeal of support. This project was viewed as one of his major achievements in the Mayor’s term. Soon after the help from the consulting team HP, TCG announced the BO tender for the built-up and operation. In August 2009, Q-ware, a IT total solution company, beat the other two bidders to win the nine-year franchise. This slide shows you about its progress.
  • This project expands the hot spot concept to the hot zone, meaning the whole enlarged downtown area covered by wifi signals, especially outdoor areas. The network is not limited to public facilities only such as public libraries, schools, office buildings, and public hospitals, subways (public transportation), but extended to surrounding neighborhood. In this sense, the technology level is demandingly high. The first attempt to build a wireless interconnected network based on WiFi technology in the world. With a nearly two-year effort, the deployment was complete in July 2006, and was certified as the largest outdoor public wireless network at that time, and awarded the intelligent city of that year by the Intelligent City Forum (ICF).
  • Indeed, PPP is a very broad term, ranging from outsourcing, contracting out to pure privatization of the public service. In the past experience, PPP is mainly used in infrastructure deployment like transportation system construction. In this PPP, TCG grants Q-ware the right to install APs in or on all public facilities and provide wireless access service by charging the customers. Since the right of way is the most costly part to obtain in building an information network, TCG could provide the right of way to Q-ware to reduce its construction costs. Why does TCG not run the service itself? Because the information service is highly innovative, that a lot potential business opportunities there, the private sector is better to match the customer (citizen) needs and make profits by its innovation. The oppositie question is that why does the business sector not provide the service yet? Because there are market and technological uncertainty at the early of stage of development. The public-private partnership, therefore, insures the private firm from operation uncertainty, while retaining flexibility and efficiency in growing the market. This is usually called risk-pooling. This is why PPP is more appropriate model for high-tech service provision.
  • To evaluate whether or not PPP is workable model for public innovative service, we examine particularly the marketing of the WiFly service. Why? Because this PPP is highlighted in the marketing part where two parties interact the most. (and I will explain why it is this way later). For the theoretical framework, I apply Snavaly’s policy marketing model to study the WiFly’s marketing. Three cores comprise of this model: target audience, 6 marketing elements, and outside environmental factors. Snavaly expands 4P elements in commercial marketing to 6 ones, they are service, cost, information/educating, personnel, legal authority, and policy analysis, The environmental factors are technological, demographic/economic, social/cultural, and current political environment.
  • My research questions are the following: since Snavaly’s model is pertained to the public sector. I would like to analyze whether or not the PPP’s marketing is different from the public sector’s. Would it be more like the commercial marketing or the public one? (or namely, which model, the 4P (product, price, place and promotion) or 6P, more adequately explains the PPP marketing). And the third one, what is government’s role involved? In the policy marketing theories, government is the monopoly of the public service, so it has more “market” power to citizens than the private sector to its customers. And would government still have such a level of legal authority in the PPP to persuade citizens to support its policy?
  • I then propose three hypotheses: first, since government has changed its nature of being monopoly of public service provision, I assume that government still plays a predominant role in setting the marketing strategies in the PPP. Secondly, if the PPP is at a higher level of privatization, such as BO or BOT, in that the private partner is required to self-finance the project, price surely will become an issue in providing the service. Both cost and price determine the private partner’s profits, it will have incentive to reduce costs, so it will be more concerned with price especially when the tariffs are approved by government. So, I assume price will replace cost in the PPP project. Third, the marketing model will be more likely the commercial one if the PPP is more privatized.
  • First, we look at the target audience. Both customers in this PPP are appealed to the Mayor Ma’s endorsement to support this policy as he was a political superstar at that time. For the first marketing tool, service, the team also consciously utilized his high popularity to “advertise” this policy as much as possible. Many marketing events are actually the roadshow of the Mayor. However, over-promotion of this service while it is not ready-for-convenient-use will cause bad impression on the product. But the T c Service: why did TCG ask to push the service available to the public even if it is not ready yet? Due to political performance concern. TCG wanted to reap the political benefits as early as possible. 2. cost
  • Information: 4 means usually being adopted in promotion: advertisement, news coverage, sale promotion, and personnel promotion. News coverage is the most effective way. We observe the following 1). 此建設案無論是技術、經營、或政策面上皆開全球先例; 2). 此政策為當時馬英九先生市長任內被定位為具突破性的重大政績; 3). 馬英九先生享有高度政治明星光環,媒體對其出席之活動及相關發言皆會披露; 4). 此政策涵蓋了「市政」、「科技」、「產業」、「政治」四類的媒體報導路線, 4. Legal authority: government cannot force people to use the service. 5. Policy analysis: call for research projects that consolidating information policy discourse. 6. Personnel: no new organization created, only operated in task force, including the public servants from relevant Bureaus, the consulting firm HP, and Q-ware. so that no full-time public servants are allocated and dedicated to this project, but by mission assignment. Only the fourth group of the RDEC, in total of 4 persons, are the full-time workforce for this project. It is hard to formulate the common goal, and a greater efforts in coordination is no less emphasized.
  • The partners were not familiar with each other before this cooperation project. Indeed they have different goals in operating the network. So their strategies are different, either. That results in inconsistent tone in marketing and uncoordinated efforts ihnThe cost and legal authority are less used in the PPP.
  • The two partners sometimes like a unhappy married couple but could not find ways out because they have fundamentally different agendas in operating the service. To Q-ware, WiFly means business and profitability matters. To the TCG, it is more political performance than anything else. It will serve the citizens from the concern of political support and election ballots. In this sense, TCG sometimes cannot help but demand a very low level of tariff rate. Likewise, Q-ware would like to invest in the promotion events that could raise user subscription and revenues. While TCG prefers more non-profit service and welfare-oriented service applications provided by Q-ware. So it will restrain the over-exposure of commercial promotion. In this sense, the WiFly marketing does not become more business-oriented but more public image boosted although it is owned and operated by a private entity. Therefore, we reject the hypothesis 3 that the marketing model will lean toward commercial marketing as the service is more privatized.
  • After all, we can assert from this case study that TCG plays a very aggressive role in marketing the service as it viewed the service as a major policy achievement for Mayor Ma. However, Q-ware does not want to invest in marketing since it is uncertain about the market size and profits, and already spent on fixed costs on infrastructure deployment. It adopts a pretty conservative approach to operate the service. Of course, it lacks experience of being telecommunications operator, it spent a lot waste money in learning the construction and maintainence.
  • The TCG is very demanding because it promotes Mayor Ma’s political performance evaluation.
  • E administration 990126

    1. 1. Marketing the wireless city via a public private partnership Yuntsai Chou Associate Professor, Yuan Ze University R&D Advisor in Chief, the 21st Century Foundation 1. 26. 2010
    2. 2. Chronicle of the M-Taipei Initiative <ul><li>2004 </li></ul><ul><ul><li>02/11 The Taipei City Government announced the M-Taipei Initiative. </li></ul></ul><ul><ul><li>05/20 The Taipei City Government signed a contract with Hewlett-Packard Co. (HP) for its consultation. </li></ul></ul><ul><ul><li>09/07 Q-ware Co ., an affiliate of the Uni group, was tapped to build the network, and given a nine year franchise. </li></ul></ul><ul><ul><li>09/08 Q-ware Co. and the Taipei City Government co-launched the Phase I of network construction. </li></ul></ul><ul><li>2005 </li></ul><ul><ul><li>01/05 the Phase I construction completed. </li></ul></ul><ul><ul><li>02/01 Q-ware created the WIFLY brand for the WLAN service and granted free public access. </li></ul></ul><ul><ul><li>02/01 the Phase II construction began. </li></ul></ul><ul><ul><li>11/21 the Phase II construction completed. </li></ul></ul><ul><ul><li>12/20 Q-ware Co. and the Taipei City Government co-announced that Taipei was the world’s largest Wi-Fi zone . </li></ul></ul><ul><ul><li>12/22 the Wireless Broadband Oversight Committee ratified the tariffs on WIFLY services. </li></ul></ul><ul><li>2006 </li></ul><ul><ul><li>01/05 the Phase III construction was began. </li></ul></ul><ul><ul><li>01/16 Q-ware Co. began collecting low tariffs for public use of WIFLY service . </li></ul></ul><ul><ul><li>07/31 the Phase III construction completed. </li></ul></ul><ul><ul><li>09/05 Q-ware Co. and the Taipei City Government co-announced that the whole infrastructure of WIFLY was completed. </li></ul></ul>
    3. 3. Coverage of Wireless Taipei About 4,000 90% (2.32 million people) An enlarged downtown area ( 134 km² ) 2006/1/5 ︱ 2006/7/31 The Phase III 2,020 50% (1.3 million people) All remaining subway stations (a total of 63 stations). Downtown area (about 28.2 km², one-tenth of the city ). 2005/2/1 ︱ 2005/11/31 The Phase II 507 20% (520,000 people) 30 subway stations. 5 underground shopping streets. 150 m outside the subway stations. 2004/9/7 ︱ 2005/1/31 The Phase I # of APs City Population Coverage Duration
    4. 4. M-Taipei’s Uniqueness <ul><li>(1) By its completion, this project was certified as the largest public wireless local area network (PWLan) by Jiwire in 2006. </li></ul><ul><li>(2) Compared with the other PWLans at the same time, this project is the only one remaining in operation until now (since January 2005). </li></ul>
    5. 5. Public Private Partnership (PPP) <ul><li>The Taipei City Government granted Q-ware Co. the right to install APs in or on all city-owned public facilities , including highways, bridges, underground tunnels, street lamps, traffic lights, schools and so on. </li></ul><ul><li>Why did TCG adopt the “build and operate” approach in deploying the network? </li></ul><ul><ul><li>Taipei enjoys a high level of e-readiness which leads to numerous ICT business opportunities there; </li></ul></ul><ul><ul><li>The City Government could mitigate technological and market risks in the early stages of network development </li></ul></ul>
    6. 6. Policy Marketing Model K. Snavaly (1991)
    7. 7. Research Questions <ul><li>1). Whether or not the PPP’s marketing, such as the WiFly information infrastructure built-up, is different from that of the public sector? </li></ul><ul><li>2). Is it more inclined to commercial marketing or the policy one? </li></ul><ul><li>3). What is government’s role in the PPP marketing? </li></ul>
    8. 8. Research Hypotheses <ul><li>1). Government, like in the public sector marketing, is the monopoly of providing the public service and plays a predominant role in the PPP marketing. </li></ul><ul><li>2). Price will replace cost to be one of the 6P elements if the private sector is asked to self-finance the PPP project. </li></ul><ul><li>3). The marketing scheme will be more likely to be the commercial one if the PPP more inclines to privatization, and vice versa. </li></ul>
    9. 9. M-Taipei’s 6Ps <ul><li>target audience: </li></ul><ul><ul><li>internal customers: public officers; </li></ul></ul><ul><ul><li>external customers: general public, especially technology-savvy citizens. </li></ul></ul><ul><li>6P marketing tools: </li></ul><ul><ul><li>service: the not-ready (trial) service indeed causes a damage on the WiFly’s brand. </li></ul></ul><ul><ul><li>cost: the rate must be approved by the Taipei PWLan Reviewing Committee, that arouses tension between Q-ware and TCG regarding cost allocation </li></ul></ul>
    10. 10. M-Taipei’s 6Ps <ul><ul><li>Information/ educating: effective in gaining extensive coverage by both domestic and international media (such as NYT, Forbes, WSJ, BBC). </li></ul></ul><ul><ul><li>legal authority: a low level of law enforcement due to PPP and the user-paid service. </li></ul></ul><ul><ul><li>policy analysis: the RDEC in charge of the WiFly service conducted a series of policy studies on wireless network and its service application, in hopes of consolidating information policy discourse. </li></ul></ul><ul><ul><li>personnel: no full-time public employees are allocated and dedicated to this project. A greater efforts of coordination are thus necessary among the public servants. </li></ul></ul>
    11. 11. Observation & Analysis <ul><li>Among the 6P elements, service, information/ educating, policy analysis, and personnel are the mostly used means in promoting the WiFly project while cost and legal authority are seldom adopted. </li></ul><ul><li>Due to the BO tender, Q-ware must self-finance the project. It hence focuses on price instead, in order to cover the costs in providing the service. </li></ul>
    12. 12. Observation & Analysis <ul><li>1). The random and unsystematic marketing strategies; </li></ul><ul><li>2). a great deal of political benefits, such as city image marketing and Mayor’s leadership, from international press coverage; </li></ul><ul><li>3). largely influenced by the technological and the current political environments. </li></ul>
    13. 13. Analysis and Results <ul><li>Hypothesis 1 is corroborated : the TCG plays a predominant role in WiFly marketing. </li></ul><ul><li>hypothesis 2 is corroborated: price is more important than cost in marketing the PPP where the private sector is required to self-finance the service. </li></ul>
    14. 14. Observation & Analysis <ul><li>Disparities among the marketing goals and target audience: </li></ul><ul><ul><li>service: Q-ware asked for the rate tariff set at a fixed level; while the TCG intended to lower the rate on the behalf of consumers. </li></ul></ul><ul><ul><li>target audience: Q-ware intended to highlight its commercial image to attract business users, while the TCG restrains the over-exposure of commercial promotion. </li></ul></ul><ul><li> Hypothesis 3. is NOT valid. </li></ul>
    15. 15. Government directing the marketing <ul><li>The TCG’s mission of marketing the political leader’s performance; </li></ul><ul><li>the weak private partner: no enough experience in telecommunication business; </li></ul><ul><li>market uncertainty: Q-ware further cut down the marketing costs. </li></ul>
    16. 16. Conclusion <ul><li>1). Marketing the PPP based on the 6P marketing scheme; </li></ul><ul><li>2). Price will replace cost if the private partner is required to self-finance the project; </li></ul><ul><li>3). marketing the PPP may not necessarily lead to the commercial model even if the PPP is more privatized. It depends on the level of relative aggressiveness of the public and the private sectors. </li></ul>