Chinese mobile users hit 426m

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Chinese mobile users hit 426m

Growth slowing as market waits for 3G.

Growth slowing as market waits for 3G.

China had more than 431 million mobile phone users by the end of July, according to government statistics published today. 

The Ministry of Information Industry (MII) data indicated that some 38 million new mobile phone users have picked up their first handset during the past 12 months. 

With roughly one third of the population equipped, China has more mobile phone subscribers than any other nation.

The MII has predicted that the country will have 441 million mobile phone users by the end of the year, indicating that the rate of growth is slowing slightly.

Local research firm Analysys International put the total number of mobile subscribers slightly lower at the end of June at 426 million, representing a 4.08 per cent increase over the year's first quarter. 

The growing subscriber base is good news for service providers. China's wireless value-added service market grew 5.76 per cent quarter-on-quarter to reach US$827m, Analysys reported.

This market includes mobile data services offered on top of basic voice communications, such as instant messaging.

China's government currently limits foreign shareholding in mobile service providers, but will double the limit to 49 per cent at the end of the year.

The huge mobile market is also attractive for overseas manufacturers. Experienced foreign firms control more than half of China's mobile phone handset market, and increased their dominance last year.

Nokia made about a quarter of all handsets sold in China in 2005, while Motorola and Samsung both had more than 10 per cent of the GSM handset market. 

This brings foreign firms' share to above 70 per cent, according to data from Analysys International.

The government is promoting a home-grown mobile technology, TD-SCDMA, in the hope of levelling the playing field for local manufacturers.

China has repeatedly delayed the introduction of 3G mobile services while development work continues on TD-SCDMA. Industry insiders are optimistic that the eventual introduction of 3G will boost subscriber and revenue growth.

Officials indicated yesterday that they were ready to set up a test network for a final trial of TD-SCDMA. The network will be built by leading operator China Mobile, and should be completed before the end of 2006. 

It will cover the six major cities that will host the 2008 Olympic Games, including Beijing and Shanghai.

Analysts currently expect China's 3G service providers to get permission to start operations some time in the first half of 2007.
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