China's mobile telecommunications market becomes more competitive

It is happening all over the world - mobile carriers grow rapidly, when the market is still new. In the beginning, they just sign up any subscriber they can. At a later stage, carriers mainly focus on the high end of the market, on those subscribers that generate the highest bills and use most of additional value added offers of a company. Than, suddenly, this market segment saturates - high end users need to be enticed with more and more incentives to sign up with the carriers. In order to grow subscription, mobile carriers redirect their attention to other market segments - and everything becomes more competitive.

It now starts to happen in China - the country with the highest mobile numbers in the world. While the companies in the segment still add four to eight subscribers each month, still making it a fast growth market for the time being, it becomes more competitive to add subscribers and incentives are being shelled out.

The online version of the Wall Street Journal (Friday 16, 2004) reports about growing competition and competition is so fierce that "Chinese phone companies are establishing VIP clubs for their favorite, high-end users. According to the study findings by BDA China Ltd, perks include gold-plated membership cards, special airport lounges and programs that dole out airline frequent-flier miles for consumers who spend a lot of time talking on their phones" - which naturally puts pressure on their margin.