On one hand, government actively supports the development of the telecommunication industry. On the other hand, it increases the macro-control efforts through the policy, regulation, planning and other means. In 2006, the Ministry of Information Industry (MII) published “the notice about regulating mobile information service charges and fees “, which states any types of information service in customization monthly package should be confirmed by users; otherwise, without the user’s feedback, the order is considered as not substantiated, and no subscription fee required.
This policy indirectly protects the users’ transparent consumer rights. Also, in order to support the development of new entrant operators and improve the competition in China’s mobile communication industry, government always place unbalanced regulations on China Mobile and China Unicom. For example, government allows China Unicom to reduce their service charge 10-20% lower than China Mobile. Economic factors Since China implemented the “open door” policy in 1978, the invisible effect of the market economy regulation has increased.
According to the world market analysis (2005), China has kept dynamic economic growth in recent years. And the proportion of the telecommunication industry in national economy presents a rising trend. What’s more, the investment in communications and information technology is increased. For example, now many people directly connect to their friends by using internet or cell phone rather than writing letters. After the economic reform, people’s living standard is increased, thus more and more people can afford to buy phones. At the end of April 2007, China mobile communication user has achieved 416 million.
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Social factors As the telephone penetration rate in China is still very low compared to developed countries, it can be say that China’s telecommunication industry has a huge space for development. Actually, Chinese market is the most potential market as China has the largest group of customers in the world. In addition, China has experienced rapid growth in per capital GDP since the reform began in 1979. The improved living standard has increased the demand of customers for mobile communication services in both quality and quantity.
What’s more, nowadays people gradually understand and accept the concept of “information society”, more and more people tend to collect information in a more effective way by using the mobile phone and internet for their common advantages on convenience, economy, speed and privacy. For example, more and more people using their mobile phones to upload photos, download music, read news and get access to the world. It has become apparent that mobile phones have become so important that they cannot be dispensed with in people’s daily lives (China Mobile Annual Report 2006).
Technologic factors
GSM: it stands for “Global System for Mobile Communications”, China Mobile GSM is a second-generation mobile communication technology. It aims at developing a mobile phone network standard with a strong anti-piracy ability, a large network capacity, and a strong stability and less susceptible to interference, which allows users to use their cell phone across the world. GPRS: “General Packet Switched Radio Service” refers to the application of packet-switched technology in wireless telecommunications which will only consume network resources during data transmission (China Mobile Website 2007).
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This technology only charge users when they sending or receiving data resources. When there is no transfer of data, users will not be charged even they hang on the line. In addition, GPRS allows users to send and receive data at a high speed exceeding 115 Kbit/s. 3G: It refers to the third generation mobile communication technology which affords a phone to handle images, music, video and other forms of media such as website, e-commerce and other forms of information service.
