China Unicom slashes 3G base prices
Aims to boost disappointing 3G uptake rates and close on Mobile's market lead
Published: 8 December, 2010
READ MORE: China | China Unicom | UMTS
After two years of anticipation and massive build-out, the Chinese 3G networks have so far been disappointing in customer uptake. Now one of the three operators, China Unicom, is slashing its rates to encourage adoption.
Although 3G subscriber numbers trebled in the year to end of October, they still represent only 5% of the mobile base, after almost two years of availability in some areas. The total 3G base was 38.64m as of the end of October, with China Mobile recording 17m 3G accounts, Unicom 11.66m and China Telecom about 10m.
Unicom, in second place in 3G and overall mobile numbers, has cut the minimum monthly fee for its new service by more than 50%, according to Bloomberg. The lowest monthly 3G tariff is now CNY46 ($6.9), down from CNY96. The aim is to encourage users to test the new offerings at low cost and then, hopefully, upgrade to higher end plans in future.
"The new 3G tariff packages greatly reduce the consumption threshold, while adding more minutes of local calls, and more flexible billing," Unicom said in a statement. It is clearly chasing market share, while Telecom has concentrated more heavily on high ARPU deals on its CDMA network. Unicom is looking strong in share terms - it has 30% of the current 3G base, compared to less than 20% of the overall cellphone market, and has a chance to catch up with China Mobile in 3G. Mobile has 70% of the total base, but only 44% in 3G, and has been held back by its use of a proprietary system, TD-SCDMA, with limited devices available.
China's official Xinhua news agency said last month that the country aims to have 150m 3G users by 2011, while investment in 3G development would hit CNY400bn.
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