By Joseph Waring
China Telecom warns of industry damage from price war
Liu Aili, China Telecom president, warned unchecked price competition has the potential to damage all players, with mobile revenue likely to fall sharply in the saturated China market.
Speaking in keynote 1, Liu said every time a user switches to another operator, generally for a much lower price, it causes mobile turnover to decline. “When we have fierce competition, industry value reduction is more prominent”.
He pointed out that as users now enjoy limitless data, up three to five times from just a few years ago, operators’ capex and opex are growing rapidly, but “our revenue doesn’t really increase”.
The country’s mobile industry faces increasing price pressure after the three state-owned operators committed in March to reducing mobile data tariffs by at least 30 per cent in response to a new government policy on network speed upgrades and tariff reduction.
China Unicom recently kicked off a campaign offering a range of special mobile discounts.
With more than 1.5 billion mobile connections in China, Liu said the market is highly saturated, but industry statistics indicate the connections are still growing slightly, as people take up two or even three SIM cards.