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Unicom offers more 3G freebies

By Li Fei (China Daily)
Updated: 2009-06-03 10:52

A China Unicom staffer gives 3G services details to a customer in Shandong province.[Wang Hui]

China Unicom will scrap roaming fees and additional charges on long distance calls in its 3G pricing offer, a move that analysts said was likely to trigger a new round of price wars in the industry.

The country's second biggest mobile operator will also give customers a 50 percent discount on its 3G services price until the end of August before it expands the network to 229 cities.

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Under the new pricing scheme, China Unicom's 3G users will not be charged for incoming calls irrespective of where they might be, the company said.

The move effectively means that China Unicom will only have one set of fees for all of its voice call business in its 3G service. It will be the first among the three telecom carriers to do so.

The latest move, analysts said, was likely to force the other two operators China Mobile and China Telecom, to adjust their pricing for their newly launched 3G services, especially their voice communication pricing.

"The room for local fee reduction is quite limited as its level has already been very low, but there is still some sort of space in terms of the roaming fees and long distance fee charges," said Wang Jinjin, head of Asian telecom research at Swiss bank UBS.

China Unicom's move is also seen as a response to widespread customer complaint about the high 3G prices charged by the three telecom carriers.

According to an online survey by sina.com, the largest Internet portal in China, although 59 percent of 363,000 respondents said they would "ultimately become a 3G subscriber" in future, nearly half said the charges were "too high".

For example, China Unicom's lowest 3G service pricing package starts at 186 yuan a month, which includes 510 minutes of free voice communication.

China Unicom's move also comes just less than one week after its chairman and chief executive officer pledged not to start a price war in the nation's fledgling 3G market.

"The 3G market is like a freshly-baked cake. I hope it will provide new room for growth for the whole industry. (We) will not initiate a price war in this sector," Chang Xiaobing said in Hong Kong last week.

Chang urged his two rivals to refrain from adopting practices that will result in the flare-up of fiercer competition in the telecom market.