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Saturation point for mobiles? (2)

By Shen Jingting (China Daily)

13:32, May 07, 2012

The country is moving from a 2G society to a 3G society and is likely to start commercial use of 4G telecom networks in less than two years.

The fast-changing telecom environment means a potential explosion in data service businesses, as more people will be connected to the Internet via their smartphones and people use handsets not only for entertainment but also for study and work.

"If the 3G service penetration rate in China reaches 30 or 40 percent, there will be a huge opportunity for telecom companies so long as they prepare for the change in advance," said Chang from China Unicom.

The number of 3G service subscribers in China rose by 15.5 million in the first two months to reach 143.92 million. The figure is expected to exceed 300 million by 2012, which means China's 3G penetration rate is about a quarter of the population, according to a report from Beijing-based research firm Analysys International.

China Mobile Ltd, the world's biggest telecom carrier by user numbers, has already tasted initial success from data businesses. In 2011, China Mobile saw its fastest rate of revenue increase in wireless data traffic. The unit's revenue increased by 45 percent year-on-year and contributed 8.4 percent to the company's operating revenue.

"Most Chinese people still rely on mobile phones as a tool for calls and text messages. However, mobile carriers have started to offer different data services and different types of pricing to explore new revenue sources. It's just a start and we will see more coming," said Xiang Ligang, a telecom industry expert.

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