Alibaba, Tencent take rivalry to mobile network services

E-commerce giant follows rival's move to launch 3G data and voice services through a subsidiary

PUBLISHED : Friday, 18 April, 2014, 1:17am
UPDATED : Monday, 21 April, 2014, 6:43pm

The proverbial battle for the hearts and minds of mainland consumers between Alibaba and Tencent will soon play out in a vast new market for the two companies: mobile network services.

Alibaba, the mainland's biggest e-commerce service provider, said yesterday that it would launch 3G data and voice services in June through subsidiary HiChina, one of 19 companies licensed to operate as a mobile virtual network operator in the country.

The announcement, made through the Alizila website of Hangzhou-based Alibaba, followed reports earlier this month that online retail platform operator in which Tencent is a major shareholder, would launch its own mobile virtual network operator service next month.

The Ministry of Industry and Information Technology issued mobile virtual network operator licences in December and January that allowed mainland private companies to expand competition in domestic mobile services. Each operator will offer service in specific locations under its brand name, while leasing network capacity from one or all three incumbent operators - China Mobile, China Unicom and China Telecom.

Alibaba said HiChina would provide telecommunications packages and services that gave users "maximum flexibility" and transparency when it came to billing and the plans they could choose from. These packages will be sold through Alibaba's online retail platforms Taobao Marketplace and and can be paid for via Alipay, the company's online payment affiliate.

Interested consumers can start registering online with Alibaba next month for mobile-phone numbers starting with "170". No details have been released for's mobile virtual network operator initiative.

Ricky Lai, an analyst at Guotai Junan International, predicted these "bundled [mobile virtual network operator services" from Alibaba and Tencent would also feature their respective mobile-messaging platforms.

Last month, Alibaba paid US$215 million for a stake in US-based messaging service Tango. It is expected to compete against Tencent's WeChat, which operates as Weixin on the mainland.

A report from the technology ministry's China Academy of Telecommunication Research forecast the number of mobile virtual network operator subscribers would reach 50 million on the mainland by 2015.