Top Biz News

Telecom operators target countryside

By Jonathan Yeung and Pan Zhongming (China Daily)
Updated: 2006-09-22 09:50

China's "big four" telecom firms' future fortunes will depend greatly on their performance in rural markets, as they have reached saturation point in urban areas, according to industry analysts.

This situation will remain until the mainland issues its first batch of third-generation (3G) licences, which is unlikely to occur until early next year.

"The trend is very clear," said Tang Li, a senior research analyst at Pacific Crest Securities. "They have to tap the potential in rural markets for further development."

"They must win more new subscribers in order to make up for a falling average revenue per user," said Gordon Wong, an analyst with South China Research.

Falling charges mean that mobile users have recently been spending less on calls, making it essential for the firms to add more new users in order to maintain their high earnings growth, explained Wong.

In the first six months of the year, China Mobile, the world's largest cellular operator in terms of both users and market value, outperformed China Unicom, the smaller of the mainland's two mobile operators, recruiting 80 per cent of new subscribers, many of which were in rural areas.