China telecom market saturated with competition, MIIT vice minister
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[May 20, 2009]

China telecom market saturated with competition, MIIT vice minister

BEIJING, May 20, 2009 (Xinhua via COMTEX) -- China's mobile phone user population exceeded one billion by the end of March, showing that the mobile phone has become an important communication method in China, but the market is beginning to saturate, according to Xi Guohua, Vice Minister of Industry and Information Technology (MIIT).



Upon the completion of China's telecom industry reshuffle, the three telecom carriers, China Mobile (0941.HK; CHL.NYSE), China Unicom (0762.HK; 600050.SH; CHU.NYSE) and China Telecom (0728.HK; CHA.NYSE), formed a more competitive market structure for telecom operations.

Competition among telecom equipment providers is equally fierce.



Take for example the first bid zero yuan price offer made by CDMA equipment manufacturers for China Telecom's auction in September 2008.

It's now urgent for telecom operator to explore the rural market, allow businesses to innovate and set standards for fee payments and the transfer of information to attract users for new services, according to Xi.

Thus far, 3G technologies haven't yet developed the ability to trump older services like SMS for 2G. Doing so will prove a difficult task for telecom operators wishing to realize profits from the superior 3G technology of high-speed internet access.

After a decade's development with an annual growth of about 100 million, China's phone user population reached 1.006 billion by the end of March, including 335 million fixed-line users and 670 million mobile users.

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