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Mobile Phones Dominate Telecom Sector
China's mobile phone subscribers surpassed 100 million by the end of March and mobile telecom has become the most important contributor to the country's telecom industry, said the latest report from the Ministry of Information Industry (MII).
China Mobile controls three-fourths of the market with 75.8 million users, while China Unicom has the other quarter with 24.5 million users.
"The two mobile firms have started efficient competition, with China Unicom's growth surpassing that of the dominating China Mobile��" said the report.
China became the world's second largest mobile telecom market at the end of 2000 and will soon have more subscribers than the top market, the United States, MII Minister Wu Jichuan said.
The mobile business has become far more profitable than fixed-line telephone and paging offerings and is now the major income pool for the industry, the report said.
In the first three months of 2001, about half of the telecom income came from mobile business, nearly surpassing the combined incomes of local fixed-line phone, long-distance and paging businesses.
China started to provide mobile telecom service in 1987 when it launched the first analogue mobile telecom network in Guangzhou.
It took China 10 years to attract the first 10 million users, but only three more years to reach 100 million users, said MII spokesman Wang Lijian.
Although the subscriber number passed the milestone of 100 million, that is still just 7.7 per cent of the general population, the report noted.
Residents in Beijing, Shanghai and Guangdong own the most mobile phones in the country. About 27.7 per cent of Beijingers, 24.5 per cent of Shanghainese and 18.4 per cent of the Cantonese have mobile phones.
Meanwhile, just 2 per cent of residents in Northwest China's Guizhou Province, Southwest China's Tibet Autonomous Region and Northwest China's Gansu Province have mobile phones.
"There is still huge development potential for mobile phones as the penetration rate is quite low compared with developed countries," said Xie Xiaoxia, telecom researcher with the Chinese Academy of Social Sciences.
One barrier for many potential buyers is the price.
China's mobile phone operators adopt a so-called two-way charge standard now which means they charge the subscribers in both calling and answering a phone call. Many hope this will change and only the caller will pay.
"The high new subscriber growth rate will be sustained this year, but average revenues from individual users will be lower��" predicted Jim Lin, chief telecom analyst with the US research house Frost & Sullivan.
The new users are more sensitive to price, which will bring down the average usage, he said.
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