Fresh competition looms over mainland's mobile services market
New entrants in the mainland mobile market are catching attention in the lead-up to service launches this month with flexible pricing plans
Beijing's plan to fast-track telecommunications industry reforms by allowing mainland private companies to provide domestic mobile services has started to spur competition in terms of wireless data plans.
A number of these so-called mobile virtual network operators (MVNOs) have recently announced preliminary mobile data price plans before their service launches this month.
"The MVNO plans that we've seen so far provide more flexibility than those currently offered by the three incumbent nationwide mobile network operators," Ricky Lai, an analyst at Guotai Junan International, said yesterday.
"For example, some MVNOs will allow their subscribers to make use of a month's unused data capacity the following month, which is a feature that the incumbent operators do not provide."
Ali Telecom, the MVNO formed by Alibaba subsidiary HiChina, unveiled its price plan last week. Instead of a fixed monthly fee, the operator will charge based on data consumption. Users must spend a minimum of seven yuan (HK$8.80) a month, with voice calls and messages counted as data.
"As things stand, we maintain our view that MVNO trials should not materially disturb current competitive dynamics [in the mainland mobile market]," said Anand Ramachandran, lead author of the Barclays report and the firm's head of telecommunications, internet and media equity research for Asia, excluding Japan.
Ramachandran expected the mainland's incumbent mobile service providers to offer "competitive price plans compared with MVNOs" after recent rounds of price cuts.
In addition, the MVNOs are challenged by the lack of number portability on the mainland, he said. That means subscribers cannot keep their old numbers, but must get new ones with a "170" prefix.
Lai, meanwhile, expected China Mobile, China Unicom and China Telecom to continue leading the market in terms of 3G and 4G smartphone adoption based on the broad selection of models that each one offers to customers. All three incumbent mobile operators also serve as carrier-partner for the popular iPhone, which Apple is widely expected to upgrade in the second half of this year. China is Apple's second-largest market after the United States.
