Next Generation Technology will Change China Telecom Market

date: October 21, 2001

The adoption of 3G mobile phone technology will bring significant changes to the business models of mobile operators in China,said Wen Ku, deputy director of the Telecommunications Administration Bureau under the Ministry of Information Industry.

While consumers now deal directly with China's two mobile operators, in the future they are likely to also deal with application providers and service providers, he said.

Wen's made a strong reference to MVNO at an industry conference on 3G, are just the latest suggestion from China's regulators that they are considering allowing the introduction of such companies.

Licensing such operators could dramatically boost competition in China's mobile market, which is now split between China Mobile and China Unicom.

Those two companies both offer mobile data services using their current 2G networks, but are expected to dramatically expand such offerings when they adopt the faster 3G technology.

But he appeared to discourage operators' hopes of using 3G capabilities to boost revenue by offering pricey data services targeted at corporate users.

"For the same data applications, 3G will be cheaper than 2G, just like today's digital phones are cheaper than analog phones," Wen said.

He called for a "reasonable tariff structure" in order to make 3G mobile services attractive to the mass market, saying that in Japan middle-school students were the fastest adopters of the new technology.

"In the past, we targeted white-collar customers. We now need to redefine our customers," Wen said.

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