Since China has become the world's second biggest mobile telecom market, China Mobile's move will influence the global development of the industry.

China Mobile, which had over 80 million mobile phone subscribers, said trial operations have started this week in 25 cities in 16 provinces.

The 2G technology that is used in China today mainly supports voice communication.

While the 2.5G, also known as GPRS (general packet radio service), will be more efficient for data transmission, especially Internet communication.

Using a 2.5G mobile phone, subscribers will have an easy, high-speed connection to the Internet, enabling them to receive e-mail, read news and play Internet games.

With the spread of the new technology, China Mobile plans to focus on the data transmission business, which centers on Internet-related data transmission, said Lu Xiangdong, vice-president of the company.

He said data transmission will gradually replace voice service as the top profit maker in the mobile phone industry.

"The coming four years will still be the world of 2.5G. China Mobile will be cautious about a rapid transfer to 3G," said Lu, who claimed the present market is not appropriate for 3G communication.

China had registered over 111 million mobile phone subscribers by the end of May, closely following the United States as the world's No.2.

The competition between China Mobile and China Unicom, the country's second biggest operator, has become fiercer in recent months.

China Unicom, supported by government policies which enable it charge 10 to 20 percent less than China Mobile, reported subscriber increases.

Its CDMA (code division multiple access) network covering 300 cities will also start operation in October.

China Unicom, which had only a 3 percent market share in 1998, now controls 24 percent of the mobile telecom market.

Facing a shrinking market share, China Mobile is under heavy pressure to attract new customers.

"As competition becomes tougher, carriers have to keep their competitive edge with more market-oriented services," said Yang Peifang, senior telecom expert with the China Academy of Telecommunications Research.

The new 2.5G may help China Mobile attract more customers among white-collar workers and younger people.

After two months of trial operation, 2.5G service will be introduced throughout 16 provinces.

The company has selected 2,900 subscribers between the ages of 25 and 45 to take part in the trial operation.

Four major mobile phone providers, Nokia, Motorola, Siemens and Ericsson, all launched GPRS mobile phones in China to try to claim a stake.

But telecom insiders warned that it will take time for the Chinese to accept GPRS, since many people still do not habitually use the Internet and regard mobile phones as only a device for voice communications.

The mobile telecom carriers still need to upgrade their networks to ensure subscribers can always connect to the Internet and browse the web at high speeds, experts said.

And GPRS mobile phones, which are relatively expensive, need to come down in price to attract customers.

(People’s Daily 07/14/2001)