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Cell Phones Booming in China

Jiang Songling, a migrant worker from Henan Province, works in Beijing as a salesman of kitchen appliances. He printed his cell number on the product brochure and on his business card; he always uses his cell phone as a business contact number. Liao is part of a courier delivery company; he always checks his cell phone before he goes out so that his customers may reach him at any time.

The number of cell phone users is increasing impressively in China, with the number reaching 500 million by the end of June of this year. Now one in every three people on average owns a cell phone. This device has become a common communication tool that most people can afford.

Demand accelerates cell phone business

In recent years, China's economy has accelerated through industrialization and urbanization. With the per capita income increasing steadily, more and more people are buying cell phones.

Like computers, cell phones evolve using specific rules – as technology upgrades cell phone performance improves while prices go down. Now for less than 1,000 yuan (US$133) people can buy a Nokia 5070 that has the additional functions of camera and mp3. A normal black-and-white screen cell phone only costs 300-400 yuan (US$40-53), and even a migrant worker with an income of 1,000 yuan a month can afford to buy one. Three years ago, a Phillips black-and-white cell phone cost as much as 1,450 yuan (US$193).

"I had to go to the county town to pay my cell phone fees previously, but now I can pay in the township. It now costs me nothing to receive phone calls." Jiang Zhenyu, a villager in Qitai County of Henan Province, said he is "very pleased with the service of China Mobile". Competition among the telecommunication service providers has boosted the development of the cell phone industry and benefited users. China Mobile and China Unicom now have service networks in rural areas; there are different plans for cell phone users. New packages for different groups are constantly being launched and the signal coverage is wider. Lower rates have enabled more people to use cell phones, and better service provides people with more information.

"The 'fourth force' is one of the reasons for the increasing number of cell phone users," explained Zhu Haisong, a marketing specialist of China wireless products. Zhu regards "information" as the "fourth force" after facilities, capitals and talents. In his opinion, people's dependence on information will grow consistently and the cell phone will remain the most convenient communication and information-gathering tool for people because it is superior to other communication methods. The growing needs for telecommunication is an important factor for the increase of cell users.

Reshaping people's lives

Zhu labels the cell phone as the most portable "multi-functional terminal". Cell phone, keys and wallet are three necessary things that people bring with them when going out. At bus stops or railway stations, people usually use their cell phones to send messages, chat with their friends or browse the web news. According to the 20th Statistic Report of China's Internet Development released by China Internet Network Information Center, by June 30 of this year, the number of cell phone Internet users was 2.6 time of the figure last year, reaching 44.3 million.

"If you send a text message stating 'Zhu Haisong' to 50120, you will receive my electronic business card," said Zhu. He was one of the earliest users of electronic business cards. He also told the journalist about his experience buying a ticket for the movie Transformers via text message. His life has become "mobilization".

A graduate from the Beijing University of Finance & Economics, Ge is a lover of cell phones. "My amusement mainly revolves around 'playing with' my cell phone", he said. More and more cell phones have multi-functions now, such as photography, music, and games, etc. Sun Weichuan, a freshman student at the Three Gorges University, has experience in purchasing train tickets with his cell phone and found it "convenient and cheap".

China Minsheng Bank and China Mobile have launched a joint project called "Cell Phone Wallet", which provides mobile financial services. By binding the customer's cell phone number and bank account number, he/she can get personalized financial services anywhere and anytime through text messages, voice mails and WAP.

"Cell phones are not just media devices. They have actually become lifestyle tools and are used in all industries," said Zhu. "Cell phones are influencing and reshaping people's lives."

Exploring business opportunities

"Users have created a vast business opportunity. It is estimated that by 2008, the number of cell phone users will reach 600 million," Zhu said.

Aiming at the different needs of users, telecommunication providers have designed various services to satisfy different consumption needs in different market sectors, including text and multi-media messages, personalized rings and "palm stock market". "Customized cell phones" have also appeared as needed. They provide more mobile value-added services for the end users within a consortium of manufacturers, channel dealers, value-added explorers and other links.

According to certain source, China Mobile's profits are above 200 million yuan (US$27 million) per day. In addition to offering better services for "higher-end" users, telecommunication providers are also making efforts to explore the potential "lower-end" users. They have also noticed the huge potential market of the rural areas, and plan to launch "lower-end" cell phones with less functions and lower prices in hopes of further boosting the number of cell phone users.

"Cell phones are also ideal wireless marketing tools, in a unique 'one-to-one' way," Zhu said. He believes that cell phone users will bring new business opportunities for marketing.

(China Development Gateway by Xu Lin October 3, 2007)

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