|
|
|
|
China upwardly
mobile
BEIJING - China's
mobile phone market registered a robust growth in
2004, with steady expansion in market scale and a
diversification of businesses. The gap between
mobile and fixed phone users enlarged
substantially in the year, with as many as 64.87
million new mobile phone users signing in to the
user base that reached 334 million by the end of
2004, 25.9% of the total population and 4.8
percentage points higher than at the end of 2003.
The gap between mobile and fixed phone users shot
up to 22.38 million, with the number of new mobile
phone users being 1.3 times that of new fixed
phone users.
The total mobile phone calls
added up to 940.03 billion minutes in 2004, up
49.2% over 2003, with 93.5% being local. Although
fixed phones still dominated the local telecom
industry, mobile business grew much faster and
grabbed 40% of the local calls. However, affected
by cheaper IP (Internet Protocol) direct distance
dialing (DDD) services, the mobile DDD calls
occupied less in the total.
Revenue
slides
Compared with the sharp increase in
business volume, the mobile business revenue only
grew 13.2%, reaching 221 billion yuan (US26.7
billion) in 2004. It accounted for 42.68% of the
total revenue in the telecom industry, 4.25
percentage points less than in 2003.
Analysts attribute the phenomenon of more
increase in business volume but less increase in
business revenue to the lower tariff level of
mobile business, which fell 32.06% on average
because of the price war among telecom operators
on the low-end market, various preferential
treatments, the wide use of IP DDD services and
the Little Smart cheap wireless phone service.
Mobile value-added
New mobile
value-added business grew significantly in 2004.
Color Ring Back Tone (CRBT), known as the next
gold mine after Short Message Service (SMS), won
over 20 million customers with a market value
reaching nearly 1 billion yuan since it was first
launched by China Mobile in May 2003. The WAP
(Wireless Application Protocol) service also kept
a rapid monthly increase of over 16% in the
domestic market during the first quarter of 2004
due to the improvement of 2.5G network. By the end
of 2004, the number of WAP users grew to 25
million and the market value climbed by nearly 1.2
billion yuan.
In addition, entertainment
services such as cell phone games, pictures and
ring downloads, comprehensive information services
and chat services also promised broad prospects.
China's mobile market is shared only by China
Mobile and China Unicom, with China Mobile leading
with a market share of 66%.
The fierce
price war prevailing from the second half of 2003
to the first half of 2004 hit the bottom lines of
the telecom industry and impinged on the prospects
of the industry's sustainable development.
However, it was held in check after the Ministry
of Information Industry tightened oversight. By
the end of 2004, the price war had subsided, new
user curve leveled off and competition became more
rational.
China Unicom speeded up building
its third phase CDMA target network in 2004 to
strongly optimize the network and improve the
supporting system. The CDMA network capacity
surpassed 70 million lines by the end of 2004,
covering all cities and towns, many developed
villages, highways and tourist sites. Meanwhile,
China Mobile injected a considerable amount of
human and financial resources into optimizing its
networks. It undertook commercial experiments on
the EDGE network in Guangzhou and Shenzhen in the
second half of 2004 and started building the
world's biggest soft-switching network, preparing
the smooth transition to 3G.
China Mobile
dished out many value-added services for Monternet
service, such as SMS, WAP, Multimedia Messaging
Service (MMS), Interactive Voice Response (IVR)
and CRBT. It introduced a new brand concept called
"I can" for the GoTone services after having been
appointed the unique mobile communication supplier
for the 2008 Beijing Olympic Games. China Telecom,
based on its CDMA 1X service, could provide online
stream media, mobile office, mobile videophones,
Internet and entertainment. The company put on the
market a double-mode mobile service branding,
"Global Communication" at the end of 2004 to
fulfill unlimited communication around the world.
The two companies also eyed the industrial
application market. China Mobile actively
implemented internal industrial application
solutions such as SMS, V Network, wireless DDN and
mobile orientation, and achieved substantial
results. China Unicom boasted solutions for
securities, public security, transportation and
fishery, relying on CDMA 1X and made breakthroughs
in palm securities and mobile police services.
China Mobile has not only enhanced its
cooperation with the service providers, but also
strengthened its ties with terminal providers and
channels operators. It launched five models of
tailored cell phones labeled GoTone and named as
"Xinji" in partnership with Motorola and four
other mobile phone makers in February 2004. That
increased to over 10 models by the end of May. The
company set up a joint mobile phone sales and
distribution firm, Zhongyi Dingxun, with ZTE,
Huawei, East Communication, BIRD and Digital China
in August, responsible for the purchasing and
marketing of the tailor-made mobile phones.
China Unicom joined hands with South
Korea's SK on the establishment of the UNISK
(Beijing) Information Technology Co Ltd in April
2004. It hosted a meeting to discuss UniJa
technical criterion and boost Java application and
development with the participation of famous
hi-tech enterprises SUN, Motorola and Samsung. On
September 21, it signed an agreement with IT
giants Intel, Hewlett-Packard and IBM on joint
promotion of wireless Internet service. Those
companies were asked to provide tailor-made
laptops for Unicom's "U-Net" services. Unicom also
called for the establishment of an industrial
value chain alliance with equipment providers,
terminal providers, software providers and
integrated system providers on May 2004, which
strongly stimulated the CDMA 1X value-added
businesses.
Production
boost
Rules have recently been eased to
boost the mobile sector. If an enterprise plans to
produce mobile phones in China in future, it only
needs to be examined and approved by the State
Development and Reform Commission (SDRC),
according to the regulation issued by the SDRC
recently. The regulation, called Several
Regulations on Examining and Approving Mobile
Communication System and Terminal Investment
Projects, has finally put an end to the dispute
over mobile phone production license.
After receiving applications, the SDRC
will solicit opinions of the Ministry of
Information Industry and may entrust consultant
institutions to make assessments of key issues,
and then decide whether or not to approve the
projects. It seems that the threshold set by the
SDRC to mobile phone production project is not
high. Enterprises that have been coveting the
manufacturing of mobile phones can finally rush
into the arena with no obstacles.
But the
SDRC also warned investors of the potential risks
behind the current mobile phone investment frenzy.
China had formed a capacity of producing 300
million mobile phones and actually produced 245
million sets in 2004. The price competition has
been very acute. Adding the potential production
capacity of those projects to be launched, the
country's mobile phone production capacity will
exceed 500 million sets, accounting for more than
80% of the world demand.
Wang Guoping, an
analyst of the Galaxy Securities, holds that the
situation of a huge production capacity lying idle
is not fatal to mobile phone industry, which,
different from household electrical appliance
industry, pays a rather low depreciation charge
for its small fixed asset investment in the
earlier stage. That is also one of the reasons for
so many enterprises going all out to squeeze into
the mobile phone industry.
But some
industry insiders point out that the mobile phone
industry may face the same risk as that of the
household electrical appliance sector, that is,
overstock of products. Overstocking will produce
huge pressures on the money chain, which is often
unendurable for mobile phone makers. So the
problem for mobile phone makers is not the
production capacity, but whether the actual output
matches the market demand.
Besides, the
new regulations haven't fully opened the door of
the mobile phone industry, Wang stresses. The SDRC
can still keep an enterprise out of the industry
by defining whether it has the perfect development
platform and research environment, complete
capability of designing sets and unit circuit
hardware. Aux Group, a typical representative of
those eager to enter the mobile phone industry,
deem the regulations a good thing. The mobile
phone industry still has a gross profit margin of
20%, which is huge profit for the household
electrical appliance sector, says the company's
mobile market CEO Li Xiaolong Li.
In the
coming fiercer competition, less famous brands or
enterprises with an annual sales of less than
three million sets will be kicked out the arena,
predict market analysts. At present, mobile phones
of all less famous brands in China take up 15% of
the share at most. But the numerous new comers are
obviously not satisfied with the 15% share, and
they are sure to further nibble a share of famous
brands. A reshuffling of the industry is clearly
on the way.
(Asia
Pulse/XIC) |
|
|
|
|
|
|
|
 |
|
|
|
|
|
All material on this
website is copyright and may not be republished in any form without written
permission.
© Copyright 1999 - 2005 Asia Times
Online Ltd.
|
|
Head
Office: Rm 202, Hau Fook Mansion, No. 8 Hau Fook St., Kowloon, Hong
Kong
Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
|
Asian Sex Gazette China Sex News
|
|
|
