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UTStarcom expects growth from city population shift

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Low-cost service ideal system for rural migrants who cannot afford 3G link-up

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UTStarcom, a key supplier of xiaolingtong equipment on the mainland, hopes a central government plan to move 400 million people from rural areas to urban centres will continue to drive demand for the low-cost mobile-phone services.

UTStarcom chief executive Wu Ying said the migration plan to take place over the next 20 years would create demand among a population which did not have access to telecommunications services.

'Four hundred million is a huge number. Ninety per cent of these 400 million people today do not have any phone services, including fixed-line,' he said.

'Once they have a better choice in the next two to three years, it's going to be [xiaolingtong]. They cannot afford 3G services, not even 2G.'

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The first xiaolingtong system appeared in 1999, under a trial operation which began in Xian, Shaanxi province. Services have exploded since as fixed-line carriers China Telecom and China Netcom aggressively build networks to capture growth at the low end of the market from mobile carriers China Mobile and China Unicom.

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