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Telecom sector growing steadily
By Chen Zhiming (China Daily)
Updated: 2004-06-22 08:45

China's mobile phone subscribers topped 300 million at the end of May, the Ministry of Information Industry announced yesterday.

The figure is approximately equal to the population of the United States.

According to the country's telecom watchdog, business revenue from the telecom industry accomplished 210.36 billion yuan (US$25.3 billion) in the first five months of the year, representing a growth of 13.4 per cent from the same period last year.

At the same time, fixed-line telephone users reached 290 million with 192 million urban users and the remainder in rural areas.

"The surging numbers reflect the country's telecom industry successfully maintaining steady development despite fiercer market competition," said Dai Chunrong, an analyst with Huaxia Securities.

Newly-recruited mobile subscribers in May stood at 4.8 million. Dai expected the country to register more than 60 million new mobile subscribers this year.

"The growth is reasonable though we expect tougher competition in the Chinese market in the next few months," she said.

To grab a larger market share, both China Mobile and China Unicom are making great efforts to consolidate market share as well as to attract new subscribers from the beginning of the year.

The latest move from China Unicom, for example, is to introduce dual-mode mobile services catering to the demands of high-end subscribers.

"We are very confident about the new service as it enables our customers to enjoy services from both our networks and provides a new communications experience," said Yu Yingtao, deputy general manager of the marketing department of China Unicom, last week in Beijing.

Under the brand name "World Wind," the dual-mode mobile phone service supporting GSM and CDMA (code division multiple access) networks enables users to transfer from GSM and CDMA networks automatically.

China Unicom is the only telecom operator in the country that runs the two different networks.

China Mobile will introduce a new service, characterized by a SIM (subscriber identity module) card for several phone numbers.

By integrating several phone numbers into one SIM card, subscribers can avoid paying roaming fees by using different numbers in different locations.

"Tougher competition has thus become unavoidable as all the telecom operators want to gain a firm foothold as well as make more profits," said Zeng Jianqiu, a professor with Beijing University of Post and Telecommunications.

"Nowadays, the key issue in the face of telecom operators is not only the numbers in its customer pool, but how to improve their profits," he said.

He said he believes wireless data-based services will be a key factor driving up their profits.

Both the duopoly mobile operators' annual reports show that profits made from wireless value-added services are gaining great momentum.

Analysts predicted that the sales of wireless value-added services is likely to reach US$300 million by the end of this year.

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