17 Jul 2009 15:09

China Mobile to spend $1.76 bln on user subsidies in 2009

Beijing. July 17. INTERFAX-CHINA - China Mobile will spend RMB 12 billion ($1.76 billion) on providing subsidies for service subscribers in 2009, half of which will be put towards subsidizing TD-SCDMA subscribers, the president of China Mobile announced on July 16.

"In the 2G era, there were only two wireless operators - China Mobile and China Unicom. With the entry of China Telecom, competition will be even fiercer in the 3G era. We have increased our budget for user subsidies from a total of RMB 8 billion ($1.17 billion) in 2008 to RMB 12 billion ($1.76 billion) in 2009. Half of this budget will be reserved for existing and potential TD-SCDMA service subscribers," said Wang Jianzhou, president of China Mobile.

Subsidies will be provided through special service bundles that come with TD-SCDMA mobile phones or netbooks that are free or at below-retail prices to attract new users, according to Wang.

"China Mobile is prepared for a slight decrease in market share due to increased competition. However, we currently still have the largest market share and unmatched growth potential," Wang said.

Wang said that TD-SCDMA mobile phone selection and quality is integral to China Mobile's success in the 3G era. "The TD-SCDMA mobile phone is still the weakest link in the development of the TD-SCDMA market. Once we have a better inventory of TD-SCDMA mobile phones available, our user base will grow rapidly. China Mobile is participating in the design of TD-SCDMA mobile phones through cooperation with handset manufacturers. By the end of the year, we will unveil a series of high-end models, as well as a number of low-end models prices at RMB 1,000 ($146.39) or lower," Wang said.