Mobile growth slows in China

21 May 2003

China’s leading mobile operators have reported a slow down in growth over the first five months of 2003, despite recent price cuts made across the board in a bid to attract subscribers. China’s largest operator China Mobile announced disappointing results for April with the total number of new subscriptions rising only 1.37% to 125.5 million. Rival operator China Unicom fared only slightly better with growth of 2.67% to 66 million; even its highly marketed CDMA services gained just 555,000 new users during the month. As a result of the fall both companies have pledged to introduce new products and services to their existing customers in order to boost profits. Competition for the two dominant operators is hotting up with the entrance of an alternative cut price service, Xiaolingtong, operated by China Telecom and China Netcom through a personal access system. Although the emerging cellco is still to receive official approval from the authorities, no objections have been raised over the rollout of local services in Guangzhou, Shanghai and Beijing. The two incumbents have been forced to slash the cost of customers receiving calls from alternative operators, a charge that is not incurred when using Xiaolingtong services.