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 Friday, June 27, 2008

China's mobile phone accounts rise to 592 million; number of fixed-line accounts falls

China's fast-growing number of mobile phone accounts has risen more than 8 percent since the start of the year to 592 million, while demand for traditional fixed-line service is falling, a state news agency reported Thursday. The figures reflect a growing trend for Chinese customers to opt solely for mobile service. The shift has hurt fixed-line carriers, prompting Beijing to launch a massive industry reorganization to revive competition.

The number of mobile accounts in China grew by 44.8 million through the end of May, the Xinhua News Agency said, citing the Ministry of Information Industry. It said the number of fixed-line accounts fell by 6.5 million to 358 million. China has by far the world's largest population of mobile phone users. But several million have multiple phones for personal and business use, so the total number of subscribers is smaller than the number of accounts. The boom has turned China's dominant mobile carrier, China Mobile, into the world's biggest phone company by number of subscribers, with more than 400 million. Meanwhile, fixed-line carriers China Telecom and China Netcom have seen subscriber demand and profit growth slump.

That prompted Beijing to announce an industry restructuring in May aimed at creating more robust competitors to China Mobile. It would create three groups based around China Mobile, China Telecom and China Netcom, each with a mix of fixed-line and mobile assets. The government says the reorganization will clear the way for the long-awaited awarding of licenses for third-generation, or 3G, mobile service. That technology, which supports wireless video, Web surfing and other services, is expected to boost revenues for mobile carriers still further.

Source: Cellular News.