Private network operator starts mobile service

Telephone World became China's first virtual network operator to offer mobile telecom services on Sunday, kicking off the first step by private firms into the country's telecom industry that has long been dominated by State-owned wireless carriers.

The company has begun to sell mobile numbers starting with 170 in Hangzhou, capital of East China's Zhejiang Province, and customers can choose from nine voice and data plans ranging from 29.9 yuan ($4.75) to 399.9 yuan a month, a customer service staff member with Telephone World told the Global Times Sunday.

As a virtual network operator, Telephone World leases State-owned carrier China Telecom's network and resells mobile telecom services to end users.

The plans have no price advantage compared with those offered by China Telecom, but Telephone World provides some feature services such as door-to-door setup and assistance services within two hours to any location within Zhejiang Province and providing users with a matching amount of credit free when they top up their accounts, Zou Xueyong, secretary-general of China Virtual Network Operator Union, told the Global Times on Sunday.

The Ministry of Industry and Information Technology (MIIT) began to issue licenses to virtual network operators in December 2013, as a means to encourage private investment in the telecom sector and boost industry development. Currently a total of 19 private firms have gotten the license.

A batch of virtual network operators including Suning Mobile, JD Mobile and Alibaba Group also plan to offer services in the coming months.

Consumers in 19 Chinese cities such as Beijing, Shanghai and Guangzhou can reserve Suning Mobile's mobile telecom services between Thursday and May 15, the virtual network operator said on its official Weibo on Tuesday.

JD Mobile also announced in a press conference in late March that its mobile telecom services would be available in May, and promised consumers that unused mobile data would not be cleared at the end of each month.

"Virtual network operators will provide consumers with various featured services, and not clearing unused mobile data will be a main attraction for consumers," Zou said.

The three State-owned mobile carriers have long been blamed for their policies to clear unused mobile data on a monthly basis.

Liu Ming, a Hunan-based consumer, even filed a lawsuit against China Mobile in August 2013 after he found that 92 megabytes of date that he hadn't used up in July was cleared by the operator without his knowledge. The local court rejected his appeal in February 2014, ruling that clearing unused data does not infringe the plaintiff's property ownership rights.

Consumers hope virtual network operators could provide cheaper voice and data packages.

"It's good to have a variety of choices rather than only three choices previously," Zhang Yin, a 33-year-old resident in Hangzhou, told the Global Times Sunday.

Zhang said she will wait for more virtual network operators to release their monthly packages, especially those big ones like Alibaba and JD Mobile.

"If there are some packages that are really cheaper and more flexible, I will consider changing my mobile number," she said.

Analysts expect that virtual network operators will grab some market shares from traditional rivals, but they are not likely to challenge the three major telecom operators' dominant positions.

"It will take some time for consumers to accept virtual telecom operators, especially the lesser-known ones," Fu Liang, a Beijing-based independent telecom analyst, told the Global Times Sunday. He citied the example of latecomer China Unicom, which has not challenged China Mobile's No.1 position in terms of the number of users after years of development.

But with more private firms starting to offer telecom services, they will bring fresh blood to the industry and push State-owned telecom operators to reform and improve their services, Fu said.