3G disappoints customers and providers

When China launched third generation (3G) capability on January 7, 2009, the three telecom operators, China Mobile, China Unicom and China Telecom, moved aggressively to deploy their 3G networks and recruit subscribers. Yet despite their efforts, the flood of customers and profits never materialized.

According to an official report from the Ministry of Industry and Information Technology (MIIT), 3G mobile users surpassed 40 million on December 22, 2010, but that is far below the government's target of 150 million.

Telecommunication analysts attribute the lagging market to overpricing, lack of appealing applications, and too few subscribers, and say this has directly restricted the growth of 3G users, which has made reaching 150 million seem nearly impossible. In addition, the leading telecom providers have failed to make the great profits they anticipated.

Providers have primarily promoted 3G services such as video calls, mobile-phone television, and mobile-phone payment; however, Professor Zeng Jianqiu of Beijing University of Posts and Telecommunications, said those services haven't satisfied consumers' needs. And according to a report in the People's Daily, telecom operators have priced their services out of the reach of the average individual.

Beijing resident Xiao Lin signed up for a service plan with China Unicom that included 1.1 gigabytes of internet flow per month, and an additional 0.3 yuan per megabyte for extra flow. Her monthly bill averaged 300 yuan. According to her plan, if she wanted to watch a 400M-size online movie, she had a three-movie limit. To watch more, it would cost 100 yuan for each additional movie.

Generally, people use mobile phones for calls and texting, which traditional mobile phones can fully satisfy. Although the increased popularity of microblogs has prompted some to upgrade to a 3G smartphone, a large amount of consumers remain unconvinced and don't want to spend more for video calls, which are seen as a feature for business people.

Furthermore, 3G coverage isn't as prevalent as 2G, and consumers are often frustrated and inconvenienced when their 3G phones can't get service.

It is estimated that about 75 to 78 billion yuan will be invested in China's 3G market in 2011. Analysts believe that finding ways to attract more users should be a top priority and, in order to accomplish this, the providers must find ways to lower prices, develop better applications and expand coverage.