The prices of the 4G packages offered by China Mobile, one of the major suppliers on the Chinese mainland so far, show that, despite government efforts in economic restructuring, the antiquated corporate culture nurtured in the days of the planned economy is hard to shake off.

China Mobile launches 4G iPhone

Special: 3G versus 4G

4G's high cost has mainland buyers balking

China Mobile has invested a reported 100 billion yuan ($16.37 billion) in setting up its 4G network. Such a large investment is said to be the reason the carrier has charged such hefty prices, despite the fact the quality of its 4G service is widely judged to be sporadic at best.

This combination of high prices and subpar service has drawn the ire of many consumers, including some of the highly successful and well-known IT entrepreneurs, such as e-commerce titans Ma Yun of Alibaba and Li Guoqing of Dangdang. Ma was quoted as saying the poor service was "outrageous". While Li cautioned consumers to remember to terminate their 4G connection before going to sleep, as the cost of overnight connection could be as high as the unwary consumer's home.

China Mobile has denied that it is overcharging for its 4G service, noting particularly that Li was exaggerating. Nevertheless, the charges of China Mobile's various 4G packages are on average two or three times higher than the equivalent packages offered by the carriers in the Hong Kong Special Administrative Region, including those of the China Mobile subsidiary there.

Some analysts have suggested the high prices are because China Mobile needs to recover the costs of building the 4G infrastructure and they predict that when the customer base grows larger, the price will come down.

 

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