Telecommunication News
- China Mobile plans to tap rural market for growth
Date: 11-Sep-2007 Sources: (Shenzhen Daily)
CHINA Mobile Ltd., the country's largest mobile carrier by subscribers, plans a push into rural areas and more value-added services to outpace competitors in the world's largest market for mobile-phone services.
China Mobile could increase its customers by more than 5 million each month by tapping the rural market, company chairman and chief executive Wang Jianzhou told reporters on the sidelines of the World Economic Forum in Dalian, northeastern China, yesterday.
'So long as we capture the rural market, we can maintain this kind of growth trend,'he said. Wang had said in May he expects China Mobile to continue adding 4 million to 5 million subscribers every month.
China Mobile will also introduce a service, now on trial, that lets users download songs over mobile phones later this month, he said.
Though it dominates the local market, China Mobile could face increased competition after the government issues third-generation (3G) mobile licenses.
Its expansion into untapped rural service areas could make it harder for future competitors to chip away at its market share, while developing value-added services sets the stage for more revenue growth when advanced mobile functions take off.
'Mobile-phone applications are a huge market because you have 300 million users. So long as you have 10 percent of the customers using the application, you could well become the largest in the industry,'Wang said.
China Mobile had 337.97 million customers at the end of July, outstripping smaller rival China Unicom Ltd.'s 153.1 million subscribers. In July, China Mobile added a record 5.60 million customers, while China Unicom added 1.46 million customers.
China Mobile is trying to boost revenue from value-added services, such as instant messaging or making payments over mobile phones, to counter declining rates for mobile calls.
The company has been testing music download services and has had a 'good response?from consumers, Wang said, adding music downloads will likely be a 'bright spot?among the carrier's value-added services. He declined to give an estimate on the size of the market for music downloads.
China Mobile already sells ringtones and ring-back tones for mobile phones that users can download.
Wang said China Mobile is also testing a service in Chongqing, in southwestern China, that allows people to use mobile phones to pay for services, such as subway rides.
Value-added services will likely play a greater role in generating revenue for mobile operators once 3G licenses are issued, since the faster transmission speeds could facilitate services such as video or music downloads.
'The most important thing about 3G is developing new businesses (in terms of new applications), not network technology,'said Wang, referring to 3G services that quicken data transfers.
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