The Ministry of Industry and Information Technology issues first batch of license to mobile virtual network operators. (File photo)
(ECNS) - China’s mobile virtual network business has not lived up to expectations one year after the first licenses were granted, the Beijing Times reported on Monday.
So far, 42 domestic enterprises have obtained mobile virtual network operating licenses from the Ministry of Industry and Information Technology, but only 20 of them have launched related businesses while the other 22 have made no progress, the paper said, citing Zou Xueyong, secretary-general of the China Virtual Network Operator Alliance.
The ministry issued the first batch of licenses at the end of 2013, allowing domestic private companies to offer repackaged mobile services to users.
China has about 2.2 million users of mobile virtual networks, Zou says. Among those granted licenses, only Snail Mobile, which was founded in 2014 and provides telecom services throughout the Chinese mainland, has gained more than 1 million users. Some others, including Suning, Gome, Ailibaba and Jingdong, are growing fast but still have a long way to go, he said.
Most of the virtual network operators have yet to find profitable market models, which results in slow development of the sector, Zou added. China’s mobile phone real-name system has also limited the expansion of virtual network users.
An anonymous industry insider told the paper that they put in a lot of effort to acquire the license, including poaching talent from China’s three big mobile carriers, only to find “the business has too low a profit margin.”
