Just How Many Mobile Phone Users Are There in China?

Posted on October 4, 2007
Filed Under Beijing Olympics, China Business, Mobile |

I recently mentioned in passing a report that China had surpassed the 600 million mark for mobile phone users. Sure enough, the Ministry of Information Industry chose just that moment to make me an ass. From People’s Daily:

China’s mobile phone users exceeded 515 million by the end of August this year, with a monthly rise of 6.8 million on average, according to statistics from the Ministry of Information Industry (MII).

I found the reference for the 600 million user number, again from People’s Daily:

China has more than 600 million mobile phones users by June this year, which means every one in five mobile phone users is Chinese, an senior official said on Sunday.

The number included 80 million personal handy phone (PHS) users, said Xie Feibo, vice director of the Radio Administration Bureau of the Ministry of Information Industry (MII) at a forum on Chinese small and medium-sized enterprises held in Guangzhou of south China’s Guangdong province.

I guess it was those pesky PHS users that tripped me up. While they are technically mobile phones, PHS phones are just a wireless extension of land lines. It’s a cheapo wireless solution first imported from Japan in 1998. It’s typically deployed city-wide as an adjunct to land line service. China’s land line duopolists, China Telecom and China Netcom, embraced the technology with the hopes of worming their way into the mobile market.

By 2005 they had something like 74 million users. They were already facing declining growth and hit upon the idea of roaming PHS services. The technology had been favorably evaluated and tested. It was then that the MII acted to protect the interests of the mobile duopolists: China Mobile and China Unicom. China Telecom and China Netcom were forbidden from offering roaming services.

This EE Times article from February notes that “according to government figures” there were 92.7 million PHS users in 2006. By June (from the quote above), the government only counts 80 million PHS users.

92 million? 80 million? Who really cares? That’s demographic chump change in China. And PHS is sure to see a speedy death. The government is focused on the future of mobile technology, not the past. China wants to establish its TD-SCDMA 3G technology as a competitive standard to CDMA2000 and W-CDMA. If TD-SCDMA ever gets deployed in China the idea is that it will be used. Competition from a cheap PHS phone will not be tolerated.

So I guess I was off by about 85 million. Sorry.

Returning to 3G, the bellyflop watch continues with this small reference in the United States Information Technology Office’s (USITO) newsletter:

The “3G in China” 2007 Global Summit was held in China on September 25-26, 2007. …participants left disappointed, as the release of 3G was not even mentioned

There is concern that the delays in delivering 3G may, in turn, affect 4G rollout. China is planning to submit 4G standards to the International Telecommunications Union between 2008 and 2009. It’d be nice to have a functioning 3G network in place by then.

I don’t know if the 3G delays are due to technical problems or are hostage to the outcome of some bureaucratic bloodbath. One factor may be the rumored restructuring of China’s telecoms industry. Caijing explains that as China Mobile surges past its mobile competitor China Unicom and land line operators China Telecom and China Netcom, pressure is growing for some form of restructuring. The pressure is squarely on also-ran mobile operator China Unicom, with the expectation that it will be split or swallowed whole by China Telecom and/or China Netcom.

Comments

2 Responses to “Just How Many Mobile Phone Users Are There in China?”

  1. Ironfrost on October 5th, 2007 1:48 am

    It’s not 3G that will kill PHS (xiaolingtong) - it’s falling prices for existing 2G mobile systems, and especially the free incoming calls that are now available on most tariffs. PHS call quality and mobility is already way worse than GSM or CDMA, so people with PHS phones are low-end customers who aren’t likely to upgrade to 3G anyway.

  2. jim on October 5th, 2007 8:51 am

    Yes, of course you’re right. 3G isn’t even running yet, so it’s not displacing anything these days.

    I do wonder about 2G and 3G coexistance. If the CN telecoms industry does get restructured, what kinds of requirements for supporting both would be put on CN Mobile and it’s new competitor?

    How long would they have to? Would the new operator beg off 3G, but position itself for 4G? I’m getting a little ahead of things, I know.

    j

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