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Wi-Fi phones might create new markets for business growth
By Sun Xiaofei (China Daily)
Updated: 2009-08-31 16:18 China Mobile's future, on the other hand, looks bleak after neglecting to invest in fixed broadband, which is the foundation of Wi-Fi, and falling behind in the race for market placement, making future investment even more difficult. In general, telecommunications companies will face a decline in profits, and mobile phone producers will benefit from the new market. Once mobile phones are installed with the Wi-Fi function, sales of mobile phone producers will drastically increase. By contrast, telecommunications companies are likely to face a sharp decline in earnings stemming from their 3G access services due to the rapid increase in free Wi-Fi users. As the number of free Wi-Fi users rapidly increases, telecommunications companies must create a new profit model by developing a variety of profit-making contents. During the 3G era, telecommunications companies could expect large profits from simple services such as voice mail, text messages and connection fees.
Telecommunications companies must attract the interest of potential clients with free Wi-Fi access and then develop services that create a new, profit-making model. The use of Wi-Fi phones will also act favorably to related businesses. Until now, handsets, chips and basic equipment have all been produced according to the WAPI standard. The Wi-Fi standard will provide a new market for growth. There will be extensive investments in Wi-Fi hot spots such as main facilities, libraries and coffee shops. Plus, there will be rapid distribution of software that has been developed to accommodate both Wi-Fi and WAPI. It is absolutely necessary for the Chinese government to assess the gains and losses of adopting an international standard and to create a flexible industrial policy, rather than insisting on maintaining a national standard. By permitting the use of Wi-Fi, China has opened numerous doors to opportunities for industrial growth, increased exports and foreign investments. The author is a researcher with Samsung Economic Research Institute (China). The views expressed here are her own.
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