China Unicom to popularize 3G by slashing fees

Iris Hong
09 Sep 2009

China's three operators are shaping up to fight a 3G price war. The latest to cut its fees is China Unicom, which reportedly plans to offer three packages starting at 98 yuan ($14.30) a month. This is still well above China Mobile and China Telecom, which have both launched 3G student packages for as little as 19 yuan ($2.80).

China Unicom currently offers seven 3G monthly packages, ranging from 186 yuan to 1,686 yuan, which are quite expensive for Chinese consumers who typically spend less than 100 yuan per month on their mobile phone service. It will add three low-cost 3G packages, priced at 98 yuan, 126 yuan and 156 yuan, and scrap the top-price 1,686 yuan bundle, China Business News reported, quoting a China Unicom staffer.

Unlike China Mobile and China Telecom, which allow provincial subsidiaries to formulate their own fee schemes, China Unicom's 3G packages will be unified across the country. China Unicom will also eliminate long distance and roaming charges, significantly increase the amount of data included in the existing packages and cut the rates for extra call time and data, the report said. The data cap included in the current 186 yuan package, for example, will be increased by almost 11 times from 60 MB to 650 MB.

"The data fee rate of 0.3 yuan per MB is almost one-hundredth of China Unicom's 2G data fee rate. The decrease is beyond my expectation. This will likely cause the other two carriers to lower their data fees as well," said James Fu, an independent telecom analyst. Comparatively, China Mobile now charges 10 yuan ($1.46) and China Telecom 5 yuan ($0.73) for each extra MB outside their 3G data plans.

At present, 200 yuan per month gives a laptop computer user 5 GB of 3G data cap from either China Unicom or China Mobile, or 200 hours of 3G or WLAN access from China Telecom. An R&D official from China Mobile's Shanghai subsidiary believes that there is substantial room for China Mobile to lower its TD-SCDMA data fees.

"Now the majority of TD-SCDMA subscribers use dongles to access the internet. They pay over 100 yuan per month. If the fee is lowered to 40 yuan, signing up subscribers will be a no-brainer," he said.

China Unicom's W-CDMA network now covers 268 cities and China Telecom's cdma2000 network 342 cities. However, China Mobile's TD-SCDMA network only has coverage in 38 cities, and will expand to a total of 238 cities at the end of this year.

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