Image via WikipediaHere you can see what their basic promotion will do to fight the competition: you have to pay 199 euro for an iPhone 4 and a 'plan' (teleco's jargon for screwing their customers, while they are profoundly confused by different offers) for 45 euro. I was shocked, but that is perhaps because I'm used to the introduction of these systems in China.
What is the main difference between China (where close to 500 million citizens are online and even more on mobile)? In China telecom communication is considered to be an utility. Of course, the telco's can make a profit - and they do so if I can believe the figures - but their first task is to get everybody connected.
Where does that lead to? China Unicom, the smaller player in the 3G market, just launched their plan to fight the incumbent mobile provider China Mobile, here in a report by Bloomberg. What is their plan? A 7 euro per month subscription. Now you might know why so many Chinese are online.
The EU is doing a lot of work to make the telecom markets more transparent, but when I look at European comparison site like this one, I'm sorry, but that is not going to help me.
In Chinese hotels an internet connection is complimentary, just like they do not charge for using the bathroom. That would still be an unthinkable service in most European hotels.
Europe needs to change its ideas of telecom connection, now they are becoming crucial for the economy. They should considered to be utilities and pricing should be accordingly. Real transparency would be a nice start.
(Earlier published at Fons Tuinstra's home)
Related articles
- "China Mobile to Introduce Apple 4G" and related posts (justamp.blogspot.com)
- You: China Mobile's price cut won't stop share slide (menafn.com)
- China Unicom Offers $10 IPhone Package Amid Competition (businessweek.com)
- China Unicom to offer Blackberry service (marketwatch.com)
4 comments:
Hello Fons,
I know about China Unicom and China Mobile donkey years ago. Can you tell me a bit more about the competition strategies of China Mobile? I have lost track. To what I understand China Mobile is still very much control and perhaps still state owns?
Competition is a very dangerous game.
Comparing business strategies in one country the size of China to Belgium ... that one need to use a magnifying glass ... I think is not a fair comparison. It is like comparing elephant and a mouse.
In China, before mobile telecom came into being, I would guess only 5% of the people would have a land-line connected. And only the high officials of the states and the army etc. have a phone. So, when wireless telecom came into being, the investments anyone put in, can almost guarantee quick returns. STILL it failed in the beginning. WHY? Because a hand-phone would cost an engineer at least ONE year of salary. SO, again, ONLY the powerful and the rich could afford to use the system. Therefore the system change, cheap phones available (manufactured in China), cheaper rate so that the average people can use the system bla, bla ... and that is how you see what is happening in China now with the mobile market. IF one has to wait for land-line. It will never come.
IF you look at Europe, Belgium for example, or the US ... traditionally landline is available to almost 100% of the population before mobile came around. So, why should I need a mobile phone if I alreayd have a phone at home? Therefore the strategies to drive the business is different again. BUT, bottom line is, any business, or anyone who want to be in business, need to think of investment and profit. I am sure you do ...
I can see your point, but I think there are a lot more complicated than just a few lines from you or bits and pieces from me.
These are some of my very simple, humble thoughts. I do not have time to proof-read this writing. My apologies. To be able to give full, proper writing takes just too much time.
Cindy
Of course, there is a bit more to say than what I could do here. All telecoms are still state-owned (although they got some capital from the stock markets too).
The basic thought is pretty simple: when you consider telecom services are an utility, you can make everybody happy, including the companies. Only, it seems to be the politicians that have to decide to do that.
Otherwise telecom politics in China is as messy as ever. After premier Zhu Rongji broke up the old power house of China Telecom, politicians in China wrongly allowed China Mobile to become the next quasi monopolist (now 900 million account!). With the distribution of the 3G licences, China Mobile got the worst deal, the Chinese standard, despite their powerful position. All three licencees are still rolling out those services, but it is still unclear for me who is winning.
I agreed with you regarding charges for phone system should be like utility ... affordable for the majority.
Remember KPN? OR AT&T OR BT OR China Mobile?? They were all part of 'utilities' before. But then the world copied what the Tatcher the Iron Lady did by privatization, by putting companies competing with one another ... their reason is: to create a better price for the public!! Well, if you look at the telco market in the US, AT&T was broken up into pieces (Lucent was part of it and NOW disappeared !!). And the long-distance market in the US was sub-diveided into many smaller companies. BUT after less than 10 years ... they are more or less back to a few bigger companies.
AND in the NL the break-up of NS, our transport system ... because of competition, it is now so expensive to travel by train in NL as compared to when NS was NOT privatized. AND the problems between Pro-Rail and NS. Who suffers ??? -- the public. NS maintained they should make money .. but why?? Public transportation should be affordable for the public. NOT JUST about making money.
The problem with competition, the problems with policy makers is ... they are push by greedy people. People that hope to make some quick bucks. Business people NEVER work for humanity. They don't care if the average people can afford to buy or not. They ONLY SEE MONEY.
In my eyes the following should NEVER be privatized and compete for customers: Power, health care, education, trasportation, postal and communication, defence. These are the basic structures of a nation. They are supported by tax payers money.
When things don't work, do not just copy what others do. GO FIX THE PROBLEMS in your own garden. What works in China, does not mean it is going to work in elsewhere. Think bottom line. THINK who is your actual customers.
The world are attracted by the size of the population of China. But the world does not know, NOT ALL CHINESE ARE EQUAL. I absolute agreed with you that phone charges must be what the people can pay and not just for the convenient of a better few. BUT
I always wonder who are the people that need Twitter accounts? Not me. How many % of the population, I don't care which country, that REALLY NEED 3G communications? I don't think there is that many. SO again JUST THE LUCKY few. So why then the rest of the population has to be made to pay for THE PEOPLE WHO HAS NO PROBLEM TO PAY IT anyway??
SO now I am talking from both sides of my mouth ... utility price for fancy features for the rich ????? Does that make sense??
FONS ... You brought up some interesting brain scratching issues.
Cindy
In the Netherlands - the Senate - is working on a parliamentary research into this matter. It might be 20 years too late, but more people woke up.
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