'Little Smart' Expands into Beijing Suburbs

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Last updated at: (Beijing Time) Wednesday, March 12, 2003

'Little Smart' Expands into Beijing Suburbs

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China's telecommunications market is getting a strong shot in the arm following approval for the nationwide spread of the "Little Smart" wireless phone service by fixed-line operators China Telecom and China Netcom.

"Little Smart," also called xiaolingtong, is built into a city's existing fixed-line phone network and offers low per-minute rates and one-way charges.

The first batch of more than 100 xiaolingtong subscribers on Monday in Huairou, on the outskirts of Beijing, interpreted their new system as an effective lifting of the regulator's ban on Little Smart in Beijing and Shanghai. To date, the Ministry of Information has only allowed xiaolingtong free rein to operate in small and medium-sized cities during the past year.

"The government does not encourage its development, but it will not regulate Little Smart's progressive march into cities," Wu Jichuan, minister of the information industry said on the sideline of the ongoing 10th National People's Congress session.

"We are going to spread xiaolingtong into 10 other suburbs of Beijing," said an official with Beijing Communication Corporation, a subsidiary of China Netcom.

"Right at the moment, we have no plans to bring Little Smart into the downtown areas of Beijing," he added.

Because of its set-up, the service of Little Smart is cheaper, but does not allow roaming between cities.

The communication fees for xiaolingtong in Beijing were set at 0.11 yuan (1.3 US cents) per minute, compared to 0.40 yuan (4.8 US cents) per minute with other providers.

The fast-growing, high-margin technology recorded between 11 million and 12 million users last year and competes directly with the normal mobile phone services offered by China Mobile and China Unicom.

On Monday, fears that Little Smart would lure customers from mobile operators helped push China Mobile shares down to their lowest levels since April 1999.

"We have no comment to make regarding other companies' business," said an official with China Mobile.

She also refused to comment on whether the spread of Little Smart in Beijing will harm China Mobile's business.

For his part, Bai Guolin, vice-general manager of China Unicom, told China Daily: "I don't think the advent of Little Smart will have much impact on our Beijing business."

There is a considerable difference between Little Smart and GSM (global system for mobile telecommunications) phones and CDMA (code division multiple access) phones, he explained.

Analysts believe that with the pressure brought by the popularity of xiaolingtong telecommunications, one-way charges for mobile telecommunications will begin within a comparatively short period. (China Daily News)

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