China Mobile subsidizes 10 bln yuan to promote 3G business

 

China Mobile Chairman Wang Jianzhou said at the World Economic Forum in Davos that the company plans to increase mobile phone subsidies by 25 percent this year, from an average of around 8 billion yuan in previous years to around 10 billion yuan. This is expected to attract more customers to use third-generation (3G) services.

Wang said, To advance its 3G business, the company will increase subsidies on mobile phones with subsidies totaling around 10 billion yuan. The subsidies will also cover 2G service users.To lure customers, China Mobile has always subsidized the mobile phones bought through centralized procurements, and sold the phones to users at a lower price than their own purchasing costs. Now the intensity of subsidies for TD mobile phones is even greater than before.

Wang admitted that due to the global economic recession, China Mobile's business growth is likely to slow as China's economic growth slowdown has already led to a decreasing usage of its networks on Chinese mainland. Dramatic drops in China's foreign trade will also cause the flow of international calls to fall.

As for this year's 3G plan, Wang reiterated that China Mobile plans to provide 3G service to 38 cities in Chinese mainland before mid-year as scheduled. At present, its 3G users have reached 300,000 in the 10 cities where China Mobile has already offered pilot services. He added, however, that China Mobile hopes it will not have to pay out large subsidies in the future and hopes that the high-quality 3G service will attract customers in the days to come.

According to the 2009 TD-SCDMA network development plan announced by China Mobile, it will invest 58.8 billion yuan to build 60,000 new TD-SCDMA base stations in 2009. With their completion, the total number of TD-SCDMA network base stations will exceed 80,000. The network will then cover key business areas in 238 prefecture-level cities, accounting for over 70 percent of prefecture-level cities nationwide. All the prefecture-level cities in the eastern provinces (and municipalities) will be covered.

Source: People's Daily Online