Date
21 September 2017
What will the neighbors say? China Mobile's imminent tariff revamp has everyone talking. Photo: Bloomberg
What will the neighbors say? China Mobile's imminent tariff revamp has everyone talking. Photo: Bloomberg

Here’s the real deal in China Mobile tariff revamp

Go shopping with your unused mobile phone minutes?

You can, if leaked details about an upcoming tariff revamp by China Mobile (00941.HK) are accurate.

The world’s largest mobile phone operator by subscribers is about to cut its 4G tariff and an announcement is due out Wednesday, according to reports.

That would be good news for consumers, a bad omen for its rivals and just what the government expects.

Already, some analysts are beginning to see the contours of a price war. Rivals China Telecom and China Unicom likely won’t take this sitting down.

China Mobile wasted no time firing the first salvo after the government lifted restrictions on telecom tariffs and opened them to competitive forces.

Obviously, it’s all to do with subscriber targets. By bringing prices down, China Mobile hopes to ramp up 4G subscriptions which lag its goal of 30-50 million new users this year. By the end of last month, it had signed up just over four million.

The last thing it needs is a repeat of its lackluster performance in 3G, described by analysts as a missed opportunity.

China Mobile will make key changes to its 4G plans after consumer complaints about high tariffs and unreasonable practices by the three incumbents. 

These include a plan upgrade to the gigabyte level from megabytes and allowing unused minutes to be carried over to the next billing cycle or reallocated to other users, National Business Daily reported, citing China Mobile sources.

And here’s the real deal: Subscribers can monetize the unused minutes for shopping.

Does that mean an imminent price war? May be, may be not.

Independent telecom analyst Fu Liang {付亮} is not sure a price war will follow but says there is room for tariffs to come down across the industry.

So far, there’s no sign China Telecom and Unicom are stirring for a fight but reports say the two carriers are about to receive 4G trial licenses from the government.

Go figure.  

– Contact the writer at [email protected]

RA

 

EJ Insight writer

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