"Chinese already spend freely on telecom services, despite a per capita income of just 6,200 yuan, or $750 a year. They buy top-of- the-line cell phones and pay to get sports and business news by pager."
China Plugs Into Wireless Internet
Source: The Columbian
Publication date: 2000-05-26
BEIJING-- It's a marketer's dream, uniting China's two hottest consumer passions cell phones and the Internet.
The nationwide debut in May of wireless Internet has companies fighting for a piece of the country's newest industry, offering e- mail, e-commerce and Web-surfing by mobile phone.
Wireless Internet in China still faces a thicket of technical and commercial obstacles, but in a country with 50 million cell phones and Internet use doubling every six months, the payoff could be huge.
"You're potentially talking about 50 million people walking around with this device in their pocket and it's always turned on," said Derek Sulger, a partner in Intrinsic Technologies, a Shanghai-based wireless Internet start-up.
Wireless Internet promises to solve China's biggest e-problem making the Internet pay.
China has 8.9 million registered Internet users, but half are college students with family incomes under 2,000 yuan, the equivalent of $250 a month. Most don't even own their own computers, using PCs at school instead.
Consumer e-commerce is growing, but still amounts to only a few million dollars a month. Chinese don't use credit cards, which has slowed online business growth. And advertising sales, which make the Internet profitable for Web site operators in other countries, are limited in this populous but poor market.
Cell phones, by contrast, are a link to China's richest consumers. No entrepreneur, captain of industry or urban hipster is without one. State-owned China Mobile, the dominant carrier, says its number of users is growing by 60 percent a year.
Wireless Internet could have up to 6 million users and annual revenues of up to 3.2 billion yuan, or $400 million, by 2002, according to BDA China Ltd., a Beijing-based Internet consulting firm.
Adding mobile phones could boost the appeal of e-commerce. It would reach customers who don't have PCs, and they could skip the problem of online payment by charging purchases to their phone bills.
Chinese already spend freely on telecom services, despite a per capita income of just 6,200 yuan, or $750 a year. They buy top-of- the-line cell phones and pay to get sports and business news by pager.
"This is something that people will pay a lot of money for, so it's the perfect platform for e-commerce," said Sulger. His firm is developing e-mail, e-commerce and other services designed for Chinese- speakers.
China's active Internet industry is now creating new Web sites aimed at phone users.
Eachnet.com, a popular site, will offer e-mail, news, stock market data and airline schedules, said Jim Zheng, its director of business development.
Other companies are attacking a language barrier the chore of typing thousands of pictographic Chinese characters. Systems in use now require users to type phonetically in Roman letters a tedious process ill-suited to tiny phone keyboards.
Swedish mobile-phone maker Ericsson is trying to eliminate typing with a pen that transmits hand motions to a phone. It would turn written characters into e-mail text or computer commands.
"If you try to input 10,000 Chinese characters with just nine keys, it's terrible," Tng Tai Hou, a Singapore-based Ericsson engineer, said in a presentation at a recent Internet convention in Beijing.
But the biggest problem could be state-owned phone companies themselves.
Weeks before the nationwide launch, they hadn't disclosed prices or said how they would work with online service providers.
It isn't clear whether the carriers can handle added Internet- related billing duties or are willing to share revenues with private- sector partners, said Duncan Clark, a partner in BDA.
China Mobile has been running wireless Internet as an experiment since March 26 in Beijing, Shanghai and four other cities. For now, the price is the same as a phone call 0.40 yuan, or 5 cents per minute.
The test has been inconclusive because of too few users, said Fan Bing, China Mobile's chief of business development. Shanghai, China's biggest city, so far has only 2,500 Internet-compatible phones.
But China loves cell phones, and people in the industry say they could quickly replace less-popular PCs as its dominant way to surf the Net.
"It's only a matter of time," said BDA's Clark.
Publication date: 2000-05-26
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