Mobile operators are showing increasing interest in next generation mobile communications technology as a means to generate fresh growth.
Zhou Jianming, director of the Research and Development Center of China Mobile Communications Corp, parent of Hong Kong and New York-listed China Mobile (Hong Kong) Ltd, said the launch of 3G services would be a shot in the arm for the firm's revenue generated from data services.
"With intensifying competition, the proportion of our revenue from voice communications accounting for the total revenue is decreasing," he said.
Speaking at the Sixth Annual 3G Mobile China International Summit yesterday, Zhou said China Mobile will also consider adopting a super 3G technology to offer consumers an even better experience on the go.
"We hope to introduce the HSDPA technology together with 3G roll-out to meet the demands for video services and high-speed (mobile) Internet access," he said.
Typically, the current 3G services provide a speed of between 300-400 kbps.
But HSDPA, an enhanced version of the 3G WCDMA standard, promises a downloading speed of as high as 3.1 Mbps.
According to Zhou, so-called new or non-voice services contributed 16 percent of China Mobile's total revenue last year.
"There is a lot of room for improvement, especially after the 3G roll-out," he noted.
Chinese operators have been delaying 3G launches as the government has yet to award them licenses.
Xi Guohua, deputy chief of the Ministry of Information Industry, said during a keynote speech at the summit that from all perspectives it is time for China to launch 3G.
There have been a lot of discussions about 3G-related matters, but the licensing program has repeatedly been delayed.
The government is hoping to use 3G licensing to strengthen the domestic communications manufacturing industry and restructure the domestic telecoms sector, which is plagued by cut-throat competition.
But to cope with a slowdown in revenue growth, Chinese operators are under increasing pressure to adopt high-speed services, said David Ho, president of Nokia (China) Investment Co Ltd.
In the first four months of this year, the total revenue of domestic telecoms services increased by just 9.5 percent year-on-year -- the first single rather than double-digit growth for a number of years.
It is also the first time telecoms revenue growth has lagged behind GDP expansion.
"It's a strong signal marking the industry-wide slowdown," Ho said. In 2004, total revenue grew by 12.6 percent year-on-year.
"Fixed line carriers cannot find new business growth areas while mobile operators are seeing their ARPU (average revenue per user) decrease," Ho said. "And 3G will bring them a good opportunity (to generate new growth)."
A survey of 4,378 mobile subscribers in 27 cities in China conducted by Nokia found that 15-40 percent of consumers are willing to use more advanced online interactive, video and gaming services, which are not supported by the current 2G networks, Ho noted.
"More than 40 percent of users are dissatisfied with the experience of using the current value-added services due to the low transmission speed of the current 2G networks," he said.
Zhou said China Mobile will adopt a step-by-step approach in the 3G network expansion.
"We will choose to build networks where demand for 3G services is high, instead of building a nationwide 3G network immediately," he said.
(China Daily June 29, 2005)
