China Mobile Seeks Smartphone Way Into Other Industries

China Mobile is moving away from being just a provider of phone calls, and instead wants to satisfy people's everyday needs, from buying cars to furniture, said the company's chief executive.

"We have to change our traditional strategy. We have to make every attempt at integrating mobile services with our customer's lives," said Li Yue at the GSMA Mobile Asia Congress in Hong Kong on Wednesday.

China Mobile currently has 569 million users, making it the world's largest mobile operator in terms of customer numbers. But the company's CEO made the comments as many telecom operators across the world face the challenge of rising costs from dealing with higher volumes of traffic.

"I still believe mobile carriers have a huge opportunity. The opportunity is in innovation," Li said.

Smartphones will pave the way for that innovation, as users grow to rely on the devices for their daily needs, he added. China Mobile believes it can tap that potential by helping users easily reach services from all kinds of different industries via their smartphones.

"In our e-commerce market, we may sell furniture, we may sell cars. We could sell anything," he said. "We want to help the users connect with these different industries."

China Mobile was the first of the country's three mobile operators to launch its own app store in August 2009. Now the store's total downloads exceed 25 million.

But China Mobile has also been branching out into other forms of media downloads. Users of the company's mobile video services have reached more than 6 million, while paid users for China Mobile's music downloads have surpassed 3.2 million.

The popularity of such downloads have caused revenues for China Mobile's data services, excluding SMS, to grow to 30.5 billion Chinese yuan (US$4.6 billion) in the first half of 2010 from 22.7 billion yuan (US$3.4 billion) in the first half of last year.

Still, challenges remain with rising costs caused by data traffic and how to translate that into revenue more quickly.

In the case of China Mobile, the emergence of smartphones has produced data volumes ten times that of a standard cellphone, Li said. At the same time, growth in revenues has been sluggish.

"In 2009 and before, our revenues were increasing in the double digits. But in 2010 our revenues only have been increasing in the single digits." he added. "Every year the data volume is doubling, every year the data side of the business is giving us pressure."

To comment on this article and other PCWorld content, visit our Facebook page or our Twitter feed.
Shop Tech Products at Amazon