In a shot in the arm for Xiaolingtong wireless phones, users willfrom today be able to send SMS (short messaging service) messages toChina Mobile's GSM (global system for mobile communications) mobilephone subscribers countrywide, China Netcom said in a statementyesterday.
"Our marketing division is currently in negotiations with ChinaUnicom to roll out a similar service between our Xiaolingtongsubscribers and China Unicom's mobile phone subscribers," said WangShizhong, an official with China Unicom.
"However, we don't have a timetable for the completion of thenegotiations right now."
In fact, trials for the cross service collaboration between theXiaolingtong and GSM networks have been running since December 28between China Netcom and China Mobile.
The Xiaolingtong service, also known as "Little Smart" or PAS(personal access system), is built onto the existing fixed-linenetwork and lures users with low per-minute rates, one-way chargesand cheap monthly fees.
China Netcom's Xiaolingtong users have been sending 3 millionshort messages to China Mobile subscribers every day during the trialperiod, the statement said.
The cost of sending short messages will differ from region toregion, it said.
In Beijing, Xiaolingtong users have to pay 0.08 yuan (0.96 UScents) to send a short message, according to Tang Liuming, anofficial with Beijing Communication Corp, a subsidiary of ChinaNetcom.
On the contrary, China Mobile users have to pay 0.15 yuan (1.8 UScents) for every short message to Xiaolingtong phones.
The inter-service SMS connection between Xiaolingtong and GSMphones will be conducive to the popularity of Xiaolingtong services,said Yang Qing, deputy director of the TeleInfo Institute of theChinese Academy of Telecoms Research under the Ministry ofInformation Industry.
The service will also help boost the ARPU (average revenue peruser) for both fixed-line and mobile operators, she said.
However, some analysts are worried the upcoming third generation(3G) of mobile telecommunications will gradually phase out theXiaolingtong service as 3G offers faster wireless Internet connectionand speedier data transmission as well as a full range of value-added telecoms services.
Nevertheless, there is still a market for the development of theXiaolingtong service, though "its growth rate will gradually slow,"said Dai Chunrong, an analyst with China Securities.
She said she believed that Xiaolingtong will continue to play animportant role in driving revenue growth for both China Netcom andChina Telecom as the market demand for traditional fixed-lineservices has shrunk in the face of stiff competition from cellularservice providers.
In fact, to consolidate its market share, China Netcom signed aUS$40 million contract with UTStarcom to expand its Xiaolingtongnetwork in Beijing and Shandong and Henan provinces.
Simultaneously, China Telecom signed contracts valued at aboutUS$120 million with UTStarcom to boost its Xiaolingtong network inJiangsu, Zhejiang and Sichuan provinces.
"Although we have seen a slowdown of operator investment in newXiaolingtong networks in China, the continued market demand for thePAS service is driving the additional expansion of the existingnetwork capacity as represented by this contract," said Wu Ying,chief executive officer and chairman of UTStarcom China.
"We believe the demand for affordable wireless telecommunicationsin China, especially with the urbanization of western provinces overthe next 10 years, will continue to drive the growth ofXiaolingtong."
The PAS system has become one of the major telecommunicationsservices in China with more than 65 million subscribers by the end oflast year.
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