Openwave eyes mainland Arpu woes

PUBLISHED : Thursday, 23 August, 2001, 12:00am
UPDATED : Thursday, 23 August, 2001, 12:00am

Nasdaq-listed wireless Internet company Openwave Systems hopes to help China's telecom carriers reverse falling average revenue per user (Arpu).

The US-based firm said it wanted to drive further into the mainland market after investors were alarmed by the dramatic fall in Arpu at China Mobile, the dominant mobile-phone operator.

China Mobile reported in its interim results a 39.5 per cent year-on-year drop in blended Arpu to 158 yuan (about HK$155), against market expectations of between 160 yuan and 170 yuan.

This was despite the company recording 67 per cent growth in pro forma, year-on-year subscribers to 58.9 million at June 30.

Mainland telecoms carriers rely heavily on basic voice transmission for revenue.

Openwave Systems, which opened its Asia-Pacific headquarters in Hong Kong yesterday, said it hoped to assist mainland Web developers and software vendors in creating better applications and content for mobile users.

It said improved data transmission and value-added services also would help them raise Arpu.

General manager of Openwave's Beijing office Zhang Ziqiang said data transmission and value-added services in China were still rudimentary.

'The basic voice transmission-based Arpu is falling all over the world, but some developed markets managed to support blended Arpu growth because of the more sophisticated data transmission and value-added services,' Mr Zhang said.

The Ministry of Information Industry reported last week that the number of mobile-phone subscribers in China had reached 120.6 million by the end of July, surpassing the United States.

However, US research firm Gartner believes the MII may be overestimating by about 20 million.

Whatever the numbers, telecom carriers face the bottleneck of Arpu growth due to intensified competition and the limited buying power of new subscribers.

Analysts said the mainland mobile-phone market was price sensitive and dominated by low-usage, pre-paid users.

Although there was not much the telecom carriers can do about mainland consumers' weak buying power, they could generate demand by creating useful services, Mr Zhang said.

'Some telecom operators had been aware of the problem and had begun exploring ways to raise Arpu,' Mr Zhang said.

He said Openwave was in talks with Web operator and online education providers such as Newpalm and on ways to improve data transmission and value-added services.

'The key point is to develop the kind of services that make the mobile-phone users feel compelled to use, namely those that can help their businesses or access online education programme,' Mr Zhang said.