A low-cost telephone technology developed in Japan continues to make strides in China, amid an industry-wide preoccupation with whiz-bang third-generation telephony and the long wait for licences to offer such services.
Xiaolingtong, a limited mobile service offered by fixed-line carriers China Telecom and China Netcom, remains attractive to cost-sensitive subscribers, even as China Mobile and China Netcom work to entice users with more advanced data services.
In the first half of the year, China Telecom and China Netcom added 14.53 million xiaolingtong subscribers, up 22.27 per cent to 79.75 million. The rate is slower than the 18.35 million new xiaolingtong subscribers added in the first half of last year, but far outpaces growth for the mobile carriers.
In the first half, China Mobile's subscriber base grew by just 9.53 per cent to 224million customers. To increase its xiaolingtong subscriber base further, China Telecom and China Netcom recently began cross-selling the mobile service to their 147 million fixed-line customers. The term xiaolingtong eloquently describes the nature of the service: it is a small-scale (xiao) but agile and smart (ling) communications (tong) service.
The service was introduced in Hangzhou in 1997 and was permitted by the telecoms regulator because it was limited to small geographical areas and was not fully mobile.
This limitation did not impede xiaolingtong's growth. The technology filled an important market gap, providing mobile services for as little as 30 yuan per month, compared with an average revenue per user of 56 yuan per month for China Mobile's prepaid service and 176 yuan for its post-paid service.