Carrier eyes rich rural harvest

Customers buy smartphones at a China Telecom outlet in Shanghai. The telecom carrier is to launch a three-year plan to expand its presence in the countryside. LAI XINLIN / FOR CHINA DAILY

China Telecommunications Corp, the country's third-largest telecom carrier by subscribers, will devote more resources to expanding retail channels in the countryside.

The move comes as online sales of handsets hit a ceiling, and is part of the State-owned company's efforts to catch up with industry leader China Mobile Communications Corp.

Liu Ping, general manager of China Telecom's marketing department, said on Thursday the company will launch a three-year plan to expand its presence in the countryside, where many residents are still use 3G－or even 2G-enabled handsets.

"We will send 50,000 people to villages across the country to promote products and team up with local retailers to set up 50,000 sales sites within their stores," Liu added.

To covert older rural residents into its subscribers, China Telecom will also partner with handset makers to roll out tailormade smartphones that cost less than 700 yuan ($104).

In the first half of this year, the company spent 3.3 billion yuan on subsidies for handset makers and retailers.

"As a result, we sold 47 million smartphones in the first six months and the number of China Telecom's mobile subscribers exceeded 200 million," Liu said.

The company aims to sell more than 100 million handsets this year.

As China's smartphone market becomes increasingly saturated and mostly driven by replacement users, an increasing number of smartphone vendors are re-focusing on telecom carriers' retail channels.

Xiang Ligang, a telecom veteran and CEO of the industry website cctime.com, said e-commerce sites account for less than 25 percent of China's total smartphone sales, shrinking from the peak of more than 30 percent.

"It is a well-calculated decision for China Telecom to focus on the rural market, which may be one of the last big growth opportunities for smartphone makers. But it may take a long time before these efforts bear fruit," he added.

According to China Telecom, Huawei Technologies Co Ltd is the most popular smartphone brand among its subscribers, accounting for 18.1 percent of handsets it sold in the first half of this year. Apple Inc and local rival Oppo Electronics Corp followed closely with shares of 15.9 percent and 13.9 percent, respectively.