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BIZCHINA> Weekly Roundup
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Mobile telecommunication upward
(China Daily)
Updated: 2008-04-28 11:31
 Affordable phones In 2000, the Chinese mobile phone makers began penetrating into China's rural areas with cheaper models at a time when foreign vendors still focused on bigger cities. Such a strategy, according to experts, has greatly accelerated the development of mobile phones in the countryside and hastened the explosive growth of China's mobile users. The rapid rise of hard-charging local players squeezed many foreign players such as Siemens, Alcatel, Panasonic out of the market. To counter the home-grown players, Nokia and Motorola revamped their strategies by expanding into the rural markets and introducing even cheaper models that were affordable for average Chinese. In 2002, the government engineered a breakup of China Telecom as part of its effort to promote the competition in the fixed-line telephone companies. That saw China Telecom split into two companies, China Telecom and China Netcom. Yet the government apparently still did not foresee increasing mobile trend. Both China Telecom and China Netcom saw their fixed-line business eroded by their mobile phone rivals, but the government has had kept a tight grip on awarding fixed-line carriers licenses to move into the more lucrative mobile sector. To fight back, fixed-line carriers introduced the Xiaolingtong, or PHS (personal handy-phone service), a limited mobility service. That added fuel to the competition, followed by significant drops in costs in making mobile phone calls. These days there are still calls for the government to further cut the fees for making mobile phone calls, but owning a decent handset model and making calls are affordable for many Chinese. These days a handset is no longer a luxury for the priviledged. Xu Feng did not stop using his first phone until December 2001 when China Mobile closed the analog network and replaced it with GSM network. Now, the handset has become an antique and a personal collectable that Xu says he will keep forever. (For more biz stories, please visit Industries)
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