China Mobile customers decry 'one country, two prices' practice

Summary:The biggest telecom carrier in China, and the world, China Mobile has been criticized for offering far cheaper monthly service plans in Hong Kong than mainland China, triggering much discontent among Chinese customers.

For a HK$68 (US$8.8) monthly package, China Mobile's customers in Hong Kong can enjoy 1,600 minutes free local calls, 10,000 text messages with other China Mobile users, and unlimited local 3G traffic services.

However, for a 58 yuan (US$9.3) monthly package, China Mobile's customers in mainland China are offered only 350 minutes free local calls, approximately 10MB 3G traffic services, and no free text messages, according to Sina News.

Chinese netizens are furious, complaining that they are treated unequally by the telecom carrier--paying higher charges but getting lower services--which has made tons of profits on its key mainland business.

On Thursday, Hong Kong-listed China Mobile said its profit rose 2.7 percent to 129.3 billion yuan (US$20.6 billion) in 2012--a drop from the 5.2 percent profit growth a year earlier--on revenue which grew 6.1 percent to 560.4 billion yuan.

Wang Danqing, a partner from a consulting firm, said the state-owned China Mobile, which is the world's largest largest mobile operator, is the de facto monopoly on the mainland that enjoys good market share as well as power pricing, according to the Sina News.

However, China Mobile is facing fierce competition in Hong Kong. In the small city with only 7.1 million population, there are at least six telecom carriers competing for clients in the market.

Local carriers including SmarTone and One2Free even offer more competitive monthly packages to Hong Kong consumers, which explains why China Mobile remains unpopular in Hong Kong even if it offers much cheaper plans there than the Chinese mainland.

Kan Kaili, a department leader from Beijing University of Posts and Telecommunications, said the high charges and low telecom services are ultimately the result of China Mobile's monopolistic hold in the Chinese market. Kan added that introducing competition is the only way to see tariff cuts and better services in the mainland's telecommunication market.

Topics: Telcos, China, Hong Kong

About

Cyrus Lee, writing under a pen name, is a Hong Kong-based reporter in an English-language newspaper and a correspondent for a radio station.

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