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Chinese MVNOs on the Stage of MAE2014 with Focus on Data

by Guang Yang | 6月 17, 2014

Mobile Asia Expo 2014 (MAE 2014) was held in Shanghai last week. Except traditional telecom players, some emerging Chinese MVNOs were also performing on the show. Chinese MVNOs that had a booth in the expo include:

·         Telling Mobile

Telling is a large mobile device distributor in China who distributes mobile phones to over 84,000 retail stores. In recent years, Telling’s traditional mobile phone distribution business has been significantly impacted by fast growing e-commerce channels in China. More and more Chinese people have been used to buy a mobile phone through online shops, e.g. taobao.com or jd.com, instead of going to the real retail stores. So Telling has to transform its business to new areas.

As the attempt of transforming to mobile Internet, Telling has setup a joint venture with Opera to develop the specific version of Opera mobile browser for Chinese users. Telling also acquired some Chinese startup companies for mobile reading and mobile gaming. Since last December, Telling has signed the MVNO agreements with all three Chinese mobile network operators. Telling launched its MVNO brand, Telling Mobile, in early June.

In the expo, Telling released its tariff plans that support multiple persons sharing (even they are living in different provinces/cities) and personalization. Telling will also integrate its mobile Internet products (e.g. Opera mobile browser, mobile reading, mobile gaming and etc.) with its MVNO service plans to support toll-free data for these applications.

·         Funtalk

Funtalk is a mobile device retailer in China. It owns over 2,000 mobile device retail shops. Similar with Telling, Funtalk’s retail business has been significantly impacted by online channels. Funtalk also hopes MVNO business could help its transformation.

Funtalk signed MVNO contracts with China Telecom and China Unicom. Its MVNO brand, “More”, has been launched before the expo. According to its posters and the speech from Funtalk’s CEO in International MVNO Summit (a partner event of MAE 2014), Funtalk’s MVNO business will focus on the m-Health segment.

Funtalk will collaborate with wearable device vendors, e.g. FitBit, for health care wearable devices, and will also develop cloud based mobile health management platform. Funtalk will integrate Pipe (its MVNO services), Type I Terminals (smart phones), Type II Terminals (wearable devices) and Cloud (its m-Health management platform) together to become an m-Health service provider.

·         Sail Mobile

Sail Games is one of the largest online games developer and operator in China. Sail Mobile is its MVNO brand that is hosted by China Unicom. Sail Mobile mainly targets Sail Game’s users. It is also collaborating with device vendors to design the specific gaming phones.  

Snail Mobile will provide non-contract and affordable service plans to its subscribers and will offer toll-free data for the access to Snail Games’ contents. Through toll-free plans and specific hardware, Snail Games hopes to build an integrated, close-loop service model with its online gaming, MVNO and hardware businesses in order to extend users base and improve users’ loyalty.  

An International MVNO Summit was also held on last Thursday and Friday as a partner event with MAE 2014.  I moderated a panel discussion for “The Key of Data Traffic Operation.” According to the discussion, it seems Chinese MVNOs have reached a consensus that they should put the focus on data instead of voice or text messages. Many people are talking about double-side business model and sponsored data plans. Some MVNOs put the focus on niche markets, like Funtalk’s m-Health target or international data roaming market (an MVNO talked this idea with me during coffee break, but they hope to keep anonymous.).   

There was also an American MVNO in my panel, FreedomPop. Its freemium strategy attracts lots of attentions from Chinese MVNOs. FreedomPop is also looking for partners in Chinese market. However, the high wholesale prices and different regulatory environment may be the large barriers for foreign players, even if some rumors hint the restriction on foreign investment could be relaxed in late 2015 or early 2016. Currently the shares of foreign investors in Chinese MVNO should be not higher than 10%.

Most of Chinese MVNOs will launch their commercial services in this autumn. China’s regulator predicts that the number of MVNOs subscribers would reach 50 million, i.e. ~3% of total Chinese mobile subscribers, by the end of 2015. It would be interesting to see how these small players will impact Chinese mobile market.   

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