China Mobile moves into next generation of communications

According to China Mobile's financial statements, its capital spending in 2013 will be up 49 percent to 190.2 billion yuan ($30.5 billion). More than half of the company's network expenditure, 42 billion yuan, is flowing into the 4G sector.

Gao Nianshu, general manager of China Mobile Communications Corp's market operations department, said China Mobile expects to invest 27 billion yuan in handset subsidies in 2013. The figure will increase continuously in the coming years.

Zeng Jianqiu, a professor at the Beijing University of Posts & Telecommunications, said China Mobile's 4G strategy dovetails with China's broadband construction target. The country intends to be fully connected to the Internet by 2015.

In addition, the Chinese government aims to boost public sector and household spending on the information technology industry by more than 20 percent annually through 2015.

"The major challenge for China Mobile is how to involve more customers in using the 4G network," said Zeng. On the one hand, the prices for 4G smartphones need to be low enough to attract the masses; on the other hand, the cost of 4G telecom service contracts must be broadly acceptable to people.

"At the outset, the prices for both 4G handsets and telecom services could be high. But in the long run, they will go down, since a more advanced technology usually ushers in lower costs," Zeng told China Daily.

Ready for launch

Everything is almost ready for the launch of 4G services in China, said James Yan, an analyst with IDC China. "The timing is ripe and the industry environment could not be better. Customers favor smartphones, carriers have the motivation to offer 4G services and distributors know how to sell 4G products to people," Yan said.

The launch of 4G services in China will definitely be a new driver for the growth of the nation's smartphone market, he pointed out, because people have new incentives to purchase mobile phones.

"Compared with people in developed North American and European countries, we found that Chinese people are the most interested in enjoying mobile video content," Wang said. Mobile video is the leading feature of the 4G era. It perhaps indicates that Chinese people are more ready to embrace 4G services.

"The planned 4G commercial rollout is very good news for China Mobile, as well as for smartphone companies and mobile Internet companies," said Wang Jun, an analyst with Beijing-based research firm Analysys International. "The 4G business can help the carrier to attract more high-end users from rivals," Wang said.