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China Mobile’s First Shot in 4G Wars.

by Guang Yang | 1月 14, 2014

China Mobile announced a personalized 4G tariff plan on Jan 14th, including a multi-device sharing scheme. This is the first shot from China Mobile in China’s 4G wars and may well define the tone of 4G competition in China.

China Mobile’s personalized 4G tariff plan is shown in the table below.

Voice (minutes/RMB¥)

200/48

300/58

500/88

1,000/160

2,000/238

3,000/328

4,000/408

Data (MBs/RMB¥)

400/40

600/50

1,000/70

2,000/100

3,000/130

5,000/180

10,000/280

SMS (messages/RMB¥)

0/0

200/10

400/20

600/30

MMS (messages/RMB¥)

0/0

60/10

120/20

200/30

Customer can select the voice minutes, data volume, SMS or MMS volume separately to form a personalized tariff plan. When the usage is over the cap, the overage rate will be charged as RMB¥0.19/minutes, RMB¥0.29/MB, RMB¥0.1/SMS or RMB0.3¥/MMS.

China Mobile also provides the additional data volume package at 100MB/RMB¥10 and 600MB/RMB¥50. All data volume can be shared by up to 5 devices, with a charge of RMB¥10 per month for each additional device. All data volume can be used over China Mobile’s 4G/3G/2G networks.

It seems that China Mobile intends to gain 4G customers through more flexible and personalized plans but not through lower prices. China Mobile lowers the cost/MB by increasing the data volume in the package but has kept the voice price at almost the same level as 3G. The entry level service plan is actually increased from RMB¥58 for 3G to RMB¥88 for 4G (if the smallest voice and data package is selected, without SMS/MMS). China Mobile’s tariff plan for 2G/3G post-paid users (data oriented) is shown in the table below.

Monthly fee (RMB¥)

58

88

128

158

188

288

388

588

888

Voice (minutes)

50

200

420

510

600

1,000

1,400

2,200

3,600

Data (MB)

200

300

400

450

500

750

1,000

2,000

3,000

 

China Telecom and China Unicom should be relieved when they see China Mobile’s 4G tariff plan. China Mobile does not seem interested in initiating a 4G price war, at least for the moment. Considering their poor financial situation, China Telecom and China Unicom will hardly return fire if China Mobile initiate a price war. However, as we discussed in our recent report Five Themes for China's Mobile Operators in 2014, all three Chinese operators will face profit declines in 2014. So, it is a reasonable choice for them not to compete on price, particularly when the 4G networks have not been fully deployed. We can expect China Telecom and China Unicom will follow China Mobile’s pricing strategy to focus on the flexibility, instead of the price, of the 4G tariff plans.  

 

In the longer term, the competition from MVNOs could add some uncertainty to this pricing strategy. The emerging MVNOs may be able to set more attractive data prices by integrating their service portfolio. Those emerging MVNOs can also be found in our report Five Themes for China's Mobile Operators in 2014

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