Chinese cell phone market soars to world's second largest
China had 59.3 million mobile phone users at the end of June, making it the second-largest market in the world, state media reported on Thursday.
The figure is up 37 percent from 43.3 million at the end of last year, meaning China now has more cell phone users than Japan and less only than the United States, Wu Jichuan, minister of information industry, said at a Beijing telecom forum according to the Shanghai Daily.
"The figures are on track," said Duncan Clark, a partner with Beijing-based consultancy BDA China. "China adds about two million cell phone users every month."
This means China is likely to reach about 70 million mobile subscribers by the end of 2000, a forecast made by the information ministry last year.
Unlike many other official Chinese data, figures for cell phone use are considered fairly reliable, analysts said.
This is because they are based on the sales of SIM cards, which are inserted into each handset identifying it with a particular cell phone number and ensuring bills are charged to the user.
Cell phone use in China has been helped by increased competition causing prices to drop as companies vie for market share.
China Unicom, the second-largest phone company and the most serious challenger to number one China Mobile, said it nearly doubled the number of subscribers in the first six months of the year to eight million.
"The Chinese government is trying to empower China Unicom to become a real competitor to China Mobile," said Ann Liang, a Taipei-based cellular phone analyst with consultancy Dataquest Inc.
Officials have allowed China Unicom to charge lower fees than China Mobile and gave the go-ahead for the company to sell 4.9 billion dollars of shares abroad in June.
The increasing use of cell phones in China, now about half the 127 million subscribers to fixed-line services, is also an indicator of an improving economy, said BDA China's Clark.
China's GDP increased by 8.2 percent in the first half of the year, compared with 7.6 percent in the first six months in 1999, which was the slowest year in almost a decade.
One reason for the improving economy is that consumers are getting more confident. In July retail sales increased 9.1 percent from the same month last year, compared with a rise of just 5.6 percent in July 1999.
As people get more money in their hands, they buy cell phones not just because of their practical use, but also because of the personal statement they can make with them.
"It's become a fashion item that people must have," said BDA China's Clark. "Social pressure is driving people to buy cell phones."
Growth of mobile phone use in China is particularly strong in the less developed interior part of the country.
This is not only because they have more catching-up to do than the more prosperous coastal areas, but also because fixed-line coverage is weaker.
In the western-most Xinjiang region, mobile phone use jumped 113 percent last year, while in more developed Beijing, the increase was 70 percent, according to BDA China research.
In the coming months, cell phone use could be fueled by easier access to the Internet from mobile devices, and the migration of China's 70-80 million pager users to cell phones, Clark said. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)