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With expected sales of more than 900 billion yuan (US$108.4 billion) last year, China's telecoms industry continued its high-growth momentum and remained a darling for investors both home and abroad.
"The development of the telecoms sector was quite stable last year despite fiercer market competition," said Zeng Jianqiu, a professor with Beijing University of Post and Telecommunications.
Though the exact figures from the sector are yet to be released by the Ministry of Information Industry (MII) next week, industry experts believe that total revenue of the industry is sure to surpass more than 500 billion yuan (US$60.2 billion) for 2004, registering an increase of 13 percent from the previous year.
Latest MII figures show that China notched up 475.49 billion yuan (US$57.2 billion) in telecoms revenue by the end of November last year, up 13.2 percent from the same period a year before.
"Industry participants' efforts to consolidate their market share explained the industry growth," Zeng said.
In fact, the domestic telecom market was dominated by cutthroat competition last year.
As a result, almost all the major telecoms carriers turned to consolidate their market shares via differentiated services or partnerships with services providers to enrich their business services.
China Unicom, for example, launched its dual-mode phone service in August last year, a tempting and exclusive service to enable its high-end customers to enjoy worldwide mobile roaming telecommunications services.
Under the brand name of "World Wind," the dual-mode mobile phone service supporting both GSM and CDMA (code division multiple access) networks enables users to transfer from GSM and CDMA networks automatically.
China Unicom is the country's only telecoms operator that runs the two different networks.
"We are supplying dual-mode phones to offer a new choice for Chinese customers who are relying on seamless wireless telecommunications service," said Yu Yingtao, vice-general manager of China Unicom's Marketing Department in an earlier interview.
The service is a key strategy for the company to ensure the sustained development of the two networks and make the two more complementary.
Dai Chunrong, an analyst with China Securities, said he believed that the dual-mode phone service is actually part of China Unicom's effort to establish a new revenue and profit generator.
"Since there is still no certainty about China's third generation (3G) wireless telecommunications, the solution could be a very powerful revenue generator this year," she said.
The latest development for China Unicom in seeking partnerships took place last month when it clinched a deal with China Construction Bank to develop a mobile wallet service.
According to the agreement, China Unicom's subscribers are able to pay bills via their mobile phone.
"Joint efforts by telecoms operators, equipment makers and service providers have helped form a complete industrial chain in the market," said Yang Qing, deputy director of TeleInfo Institute of the China Academy of Telecoms Research of the MII.
Figures from the MII show that the country recruited 59.97 million new mobile phone subscribers by the end of November last year, bringing the total number of mobile phone users in China to 329.9 million.
Meanwhile, the country has signed up 313.1 million fixed-line subscribers.
For China Telecom and China Netcom, the quick expansion of the Xiaolingtong service was one of the major events last year, says Yang Qing, deputy director of the TeleInfo Institute of the China Academy of Telecommunications Research of the MII.
"Xiaolingtong", also called "Little Smart" or PHS (personal handset system), is built onto the existing fixed-line network and lures users with low per-minute rates, one-way charges and cheap monthly fees. It does not allow roaming between cities.
By the end of November last year, the number of newly-recruited Xiaolingtong subscribers stood at 27.64 million, accounting for 54.8 percent of the newly-recruited fixed-line subscribers.
Government figures show that the two operators have so far signed up more than 66.9 million Xiaolingtong subscribers.
By the end of November, Little Smart phone service was operating in 355 cities in the country's 31 provinces and autonomous regions.
"The government's strenuous efforts have proved to be very effective in ensuring a more open and fair market," Yang said.
She said she believed that the most important adjustment in the industry was the executive reshuffle among the major telecoms carriers.
In November, Wang Jianzhou, former chairman and president of China Unicom Corp was named as general manager of China Mobile Corp.
Wang Xiaochu, former deputy general manager of China Mobile Group and executive director, board chairman and chief executive officer of China Mobile (HK) Ltd was transferred to be the general manager of China Telecom Corp.
Chang Xiaobing, former vice-president of China Telecom Corp and chief executive officer of China Telecom (HK) Ltd was designated board chairman of China Unicom Corp.
Leng Rongquan, former vice-president of China Netcom Corp was also named deputy general manager of China Telecom Corp.
The industry took the adjustment as a sign that after years of fierce competition the Chinese Government is now working to roll out plans to further standardize the telecoms market as well as forming internationally competitive telecom giants.
"The reshuffle will be conducive to solving current issues such as interoperability, irrational price wars, and the standardization of telecoms market in the long run," Dai said.
In another development, she believed that telecom carriers' encouraging performance in the capital market also help to boost the development of the industry.
Currently, the four major telecom operators, China Telecom, China Netcom, China Mobile and China Unicom, have raised 34.5 billion yuan (US$4.1 billion) in the domestic market and US$25 billion in the overseas market.
After years of preparation, China Netcom, the country's second-largest fixed-line operator, officially triggered its initial public offering (IPO) in November last year in Hong Kong and New York.
"However, issues like 3G strategies, Telecom Law, Telecom readjustment and Xiaolingtong issues still need to be further addressed this year," Zeng said.
(China Daily January 5, 2005)
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