back to article China's three-horse mobile bet: Repeating America's mistakes

China has just awarded 3G contracts - three of them. The numbers of subscribers there already is huge, with ten times as many mobile subscribers as there are people in the UK, and twice as many as there are people in the US. But China's decision to bless three different technology standards is a puzzling one. Operator China …

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Anonymous Coward

Disparate Service

Depending on what province you stay in China does limit your connectivity elsewhere. My experience with a pay and go mobile whilst all over the mainland was interesting, to say the least. Issues calling certain numbers were noticeable, as well as using certain types of calling card. Whether a feature works from one city to another seems to be a matter of knowing the exact infrastructure in each area, which naturally the casual traveler will not. Daily random text adverts are common, particular when changing city or province.

The pay and go SIM I had was gained through a Chinese friend who happened to have a China Mobile contract, so it would be unfair to say I was given different treatment, as I had no involvement in purchasing the SIM card.

I had previously thought all mobile operators were owned by the Chinese government, but some searching has revealed this is untrue, which surprised me, given the country enjoys monitoring people, to a similar level in which the British are monitored.

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Dead Vulture

"listening through the network operator."

"listening through the network operator ... Of course that’s not an option they have in the UK"

Excuse me? Does the term "legal interception" not mean anything to the telecom experts at El Reg? The technology exists (and is widely deployed) to trivially tap into a landline network or a cellphone network via authorized routes, all that is needed is someone to type the relevant commands, and as Vodafone allegedly found in Greece not long ago, the folks issuing the "legal interception" commands aren't always the intended/authorized users.

Or did my irony detector have a senior moment?

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In Japan people buy by carrier

"The US is the only place in the world where the carrier's (network) brand is more important than the handset. People buy a Verizon, Sprint or T-Mobile phone rather than a Nokia, Samsung or Sony Ericsson.", In Japan people buy by Carrier, Docomo, Softbank(Vodafone,Jphone or whatever it called that month) or AU. The iPhone is the only exception, but until v2.2 people mainly complained how its texting support sucked for Japanese emoji (emoticons? not sure what there called outside Japan). They also ask people what carrier their phone is, because texting on same carrier is can be done by phone number, between carriers you need to use an email addresses.

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Worst Practices

"We’ve seen ... that competition doesn’t always lead to more choice and lower prices."

Neither this nor the US experiment fosters competition: rather, it facilitates carving the market up into three incompatible submarkets, each with one monopolist. In a competitive market, each time you wanted to make a call, you'd choose the carrier with the lowest cost, better coverage for where you were at any instant, enhanced-value services such as call-recording, whatever. As a guess, providers would try to gain business through lower pricing and/or better coverage capabilities.

Instead, the multiple-standards approach encourages "competition" that emphasizes lock-in. Rollover minutes, cheaper calls to same-network phones, bundled services such as WiFi at Starbucks, etc. There's a lot of variety, but the lack of back-end compatibility means that each provider builds a proprietary network that, once built, prevents new entrants from coming in and competing ("barriers to entry," in economist-speak). Each system needs towers, and proprietary equipment, in all geographic locations, and especially in marginal locations, the additional service would be economical if ALL networks could use it, but is uneconomical for any one provider.

That's why China, even in the rural regions, has SUPERB GSM coverage (e.g., all the bars I wanted in the Gobi and remote Yunnan provinces) but the SF Bay Area lacks coverage in its public transit trains, and even popular locations such as train stations used by thousands of people a day.

This effort seeks to maximize the economic power of the state in its licensing out of franchises; it unfortunately raises revenue by raising costs to the citizenry even more. The Chinese appear to have learned the worst practices of our FCC auctions, local cable-TV monopolies, etc. And for the worst possible reasons.

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Anonymous Coward

Stop this GSM bias

GSM is an inferior technology. US is far ahead of europe in terms of 3G(EVDO) coverage by CDMA operators (Spring and Verizon) unlike in here where we have to fall back to GSM every so often. I am glad china promotes multi standard competition as otherwise there is no incentive for companies to widen the 3G coverage.

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Silver badge

Perhaps useful for China

China seems to take a longer term view of the world that us live-day-by-day Westerners. Perhaps setting up three services forces the industry to take a wider view than just GSM and thus broaden its industry-wide knowledge and research, thus making it internationally more competitive.

China has come a long way in the last ten years, from exporting cheap toys to building externally designed electronics and has now started to export Chinese designed electronics. China needs to broaden its research and industry knowledge to make further progress along that road.

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