4G comes of age with 400m users likely by end of year

By GAO YUAN (China Daily) Updated: 2015-10-15 07:01

After many customers complained the most-favorable price plans were only available after midnight when most of users were not using their phones, carriers announced daytime price reduction schemes too.

One particular offer also allowed customers to carry over unused data allowances into the following month－a notable break with previous policies, which did not allow monthly data-budget rollover.

Xiang Ligang, an independent telecom analyst and founder of the industry website cctime.com, said carriers were reluctant to lower their prices on data, because it had become their major source of income in the 4G era.

"As 4G technology became more popular, larger numbers of smartphone owners were no longer sending short messages or making phone calls.

"Instead, they are relying on mobile applications to take up higher levels of Internet traffic," Xiang said.

Voice call durations shrank 2.6 percent in the first eight months of 2015, while the number of short messages being sent also declined steadily, amid the widespread use of instant messaging apps such as Tencent Holdings Ltd's WeChat.

Carriers are busy looking for new revenue boosters, including renting 4G networks to privately owned secondary carriers.

But the emerging business model is yet to make significant enough profits to cover losses on voice and messaging services.

"The surging 4G development is changing the game," said Miao Wei, the minister of the MIIT.

"Carriers need new ideas to grow their operations," he said, adding that private capital is likely to play a bigger role in the previously State-controlled industry.

"Introducing private capital will give yet another boost－especially meaningful when a slowing economy is looking for a new growth engine," Miao said.

Less developed rural areas, meanwhile, are expected to take center stage in 4G development during the industry's next five years.

Carriers and local equipment makers are also developing updated versions of 4G technology, to increase connection quality and speed, in preparation for 5G networks to be put into commercial use around 2020.

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