China Mobile cuts international roaming fees
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China Daily, August 2, 2011
China Mobile Ltd cut international roaming fees charged for 38 countries and regions by as much as 80 percent on Monday in the hope of maintaining high-end users' loyalty amid the increasingly intense domestic competition.
The carrier, which had 616.8 million mobile subscribers by June, said in a company announcement that it cut the roaming charges in countries and regions including Australia, Germany, Canada and Singapore - popular destinations for Chinese travelers.
China Mobile clients in Singapore will now pay 0.99 yuan (15 cents) a minute to call the Chinese mainland, a 75 percent decrease from the previous 3.99 yuan a minute. Data traffic fees in Canada were cut by 80 percent to 0.01 yuan a kilobyte.
The reductions are China Mobile's fourth price adjustment since 2010. The company said it was able to negotiate less expensive roaming deals for its users with international operators because of the increasing number of Chinese going abroad.
"China Mobile has an incentive to cut roaming fees because about 80 percent to 90 percent of profit was earned by foreign operator partners," said Xiang Ligang, a Beijing-based telecom observer who also runs an industry website.
Chinese users have long complained about the steep roaming fees, so the operator responded, using its clout in the global mobile industry to negotiate a bargain, Xiang added.
Meanwhile, the carrier faced stronger challenges from domestic rivals in competing for mid- and high-end mobile-phone users, who usually pay more than 200 yuan a month.
China Unicom (Hong Kong) Ltd, the country's No. 2 operator after China Mobile, has already cut international roaming fees twice this year. China Unicom customers pay about 2.8 yuan a minute to call China from most European countries and 1.5 yuan from the United States.
China Telecom Corp Ltd, the nation's smallest carrier by subscriber numbers, cut international roaming charges in 17 countries and regions by as much as 80 percent by the end of 2010.
Industry experts said that of the three Chinese carriers, China Unicom may have an advantage in Europe in securing a favorable international roaming fee because it runs a WCDMA network, the same as most European carriers. However, China Mobile has the clout in more countries and regions to negotiate a fair price.
"This has been China Mobile's biggest roaming-fee cut in the past 10 years. I think it will help the company to maintain the loyalty of high-end users, or even win back users lost to rivals," said Ji Chendong, an analyst with the research firm Frost & Sullivan.
He added that China Mobile gained relatively less benefit than its rivals from the development of the third generation (3G) mobile era because its homegrown 3G technology failed to attract enough industry partners. However, China Unicom and China Telecom have taken advantage of the rise of the 3G era and have started to grab bigger market shares in China.
"The competition for the high-end users has been intense, especially when China Unicom draws a large number of 3G users through the hot sales of iPhones," Ji said.
But iPhone users who subscribe to China Mobile, which runs on the 2G network in China - because iPhone does not support China Mobile's 3G standard - can access 3G WCDMA networks in European countries. "With the lower prices, some people may stick to China Mobile services," Ji added.
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