China Mobile campaign pushes new technology

The push also aims to recruit 60,000 subscribers to take advantage of free handsets and reduced call rates until the end of next month.

The promotion follows recent Government restructuring of China’s telecom industry that will see licences for next-generation services issued after all operators - both mobile and fixed-line - merge into three principal groups. The move is reportedly designed to create a more level playing field in the market, strengthening competition to China Mobile, a dominant force with more than 400 million subscribers, by creating groups around it and fixed-line counterparts China Netcom and China Telecom.

While the market, which boasts the world’s highest number of mobile users at 600 million, will remain closed to foreign carriers, the development is significant for international suppliers such as Nokia, which are anticipating billions of dollars worth of orders for new 3G equipment that will be required as a result of the technological upgrade facilitated by the new licences. Japanese manufacturer Sharp has announced plans to move into the already crowded Chinese market this month with its Aquos handset, which features a rotating LCD TV screen.

Observers have noted, however, that the move is unlikely to make any great initial impact on China Mobile’s 70 per cent market share.

There will be more competition, but not as much as people think, said Shaun Rein, managing director of China Market Research Group.

The merger will take time to ramp up. China mobile has a very strong platform and will continue adding many subscribers over the next year. It’s too far ahead.

According to Rein, China Mobile’s operating style has been considerably smoother than rivals, such as China Unicom, which lacked a solid sales strategy.

He said that the company’s sheer mass also meant that it would continue to be the first choice for many consumers, particularly outside the major cities, where convenience took precedence over brand values.

David Wolf, president and chief executive of Wolf Group Asia, added that the incompatibility of the three networks’ technologies - TD-SCDMA, WCDMA, and CDMA-1X - would minimise the potential consumer benefit of the restructuring by making roaming impractical.

But Rein believed that, in the long term, the change would benefit advertisers.