China Mobile

China Mobile reduces charges for roaming calls

PUBLISHED : Thursday, 15 June, 2006, 12:00am
UPDATED : Thursday, 15 June, 2006, 12:00am

China Mobile has cut prices for its international roaming calls in Sichuan and Zhejiang province in a move that is likely to bite deeply into the market share of China's fixed-line operators.

The rate cuts - which will create an across-the-board fixed China-bound roaming rate in the two provinces - follow earlier flat-rate discounts on its local voice tariff.

While revenue from international roaming made up less than 5 per cent of China Mobile's top line last year, analysts said the move would put pressure on fixed-line operators China Telecom and China Netcom, encouraging more mainland travellers to call home from abroad using mobile phones.

Under the plan, China Mobile will charge its premium brand 'GoTone' customers - normally high-spending business users - a fixed 5.99 yuan per minute rate for calls back to China from 167 countries and regions.

The fixed-rate plan, however, does not include travellers to Hong Kong.

Before the fixed-rate China bound roaming promotion this month, China Mobile also introduced a similar plan in Guangzhou in March but at a higher rate of 9.20 yuan per minute.

Jinjin Wang, UBS Asian telecommunications research director, said the rate cuts by China Mobile were not a concern for the firm as roaming represented just a fraction of its telecommunications revenue.

'However, it's a good strategy in itself as it would be effective in attracting high-end and mid-range users,' Ms Wang said.

'Previously, these customers were unwilling to make roaming calls back home as they were put off by the high rates.'

She added that fixed-line operators China Telecom and China Netcom were likely to face more pressure from China Mobile.

Last year, China Telecom's long-distance call revenue fell 2.1 per cent to 29.4 billion yuan. Meanwhile, China Netcom's long-distance sales dropped 8.5 per cent last year to 11.44 billion yuan.

Ms Wang said for the first quarter, revenue in the mobile sector grew 17.6 per cent from a year ago, beating overall sector growth of 11 per cent.

Cut-price calls

China Mobile cuts roaming call rates in Sichuan and Zhejiang

Plan charges premium users rate of 5.99 yuan per minute

Fixed-rate plan does not include travellers to Hong Kong