While the new policy of China Unicom's iPhone 4 has been hyped up, it seems that China Mobile has not stopped its efforts to compete for iPhone 4 users. Another focal issue also comes to light: where do China Mobile’s iPhone 4 phones come from? Why does China Mobile insist on competing with Unicom for iPhone 4 users? This reporter attempts to uncover these mysteries.
China Mobile continues to vie for iPhone 4 users
The huge response triggered by China Unicom's new policy for iPhone 4 is rare in the industry. A battle to defend Unicom users has exposed the historical internal competition and irregular competition among operators in the telecommunications industry.
Despite warnings from Li Gang, Vice President of China Unicom, stating that "China Unicom is the only legally authorized operator of iPhone 4 in mainland China," local branches of China Mobile continue to promote various "iPhone 4 services."
The latest imitation of offering iPhone 4 SIM card cutting service comes from China Mobile Wuhan branch. Recently, after the Ministry of Industry and Information Technology (MIIT) first expressed its stance on Unicom's new policy for iPhone 4, it still announced: "Starting today, Apple-specific MicroSIM cards will be provided at various district center business halls for iPhone 4 users, allowing mobile users to use their iPhone 4 phones without needing to cut the SIM card."
On some websites of China Mobile's local branches, special sections are still dedicated to showcasing relevant pages about Apple iPhone 4, including its usage, activation, function demonstrations, etc., proudly showing full support for Apple iPhone 4 from all of China Mobile's services.
In response, Li Gang once stated: "A company needs to know what is legal and what is illegal; you can only sell if someone authorizes you." Even under such a statement from a China Unicom executive, China Mobile has not ceased its efforts to compete for iPhone 4 users, indicating that there must be more behind China Mobile's actions.
Discussions on iPhones by China Mobile's senior management
It is understood that a recent speech by a senior member of China Mobile's leadership may explain the reasons behind this.
According to the financial report published by China Mobile for the first three quarters of this year, its total operating revenue for the first three quarters reached 352.6 billion yuan, an increase of 7.8% year-on-year; net profit was 87.2 billion yuan, an increase of 3.9% year-on-year. In terms of growth rate, it is lower than China Telecom but higher than China Unicom, while profits account for the majority of the three major operators.
Regarding this performance, a senior official of China Mobile did not express praise during an internal speech: "If we compare the market share of mobile communications, we have the smallest share, and our growth is the lowest. I think this is true for all provinces."
He pointed out the root cause: "The increase in high-end users and group customers has caused us significant impact. What deserves attention most is WCDMA, 3G systems, and the iPhone, which are gradually eroding our high-end business users and young people's market."
He said: "What China Mobile is most proud of is that many of our customers are high-end users. The M-Zone service we launched is aimed at young people and the fashion market. But the user base that WCDMA and the iPhone target happens to be high-end business users and young people."
At the same time, remarks by a senior China Mobile official spread widely online: "Sometimes when flying, sitting in first class, I see nothing but iPhones around me. At first, when people said they used China Mobile SIMs in their iPhones, I felt somewhat consoled. But later, I started having more doubts because people said, 'There's no way, I'm using Unicom's SIM because WCDMA is only available on Unicom.'"
This senior official remarked: "So I have a professional sensitivity; whenever I see someone using a certain phone in any setting, I increasingly feel that high-end individuals all use iPhones. And even worse, iPhones have shifted from primarily using China Mobile SIMs to primarily using Unicom SIMs."
Clearly, the large number of high-end users and fashionable users switching to Unicom's 3G network caught China Mobile off guard, and this trend is becoming increasingly severe, leading to increasingly fierce competition between local branches over Unicom's iPhones.
Jinan Mobile's package draws attention to sourcing
In the competitive landscape of the telecommunications sector, from early price wars and interconnection issues to current aggressive price reductions in equipment procurement and the struggle for the iPhone market, China Mobile has always been known for its toughness. However, due to its lack of authorization from Apple to operate the iPhone, it finds itself in a difficult situation. The root of this difficulty lies not only in the lack of legal operating status but also in the sourcing of iPhones.
Compared to providing SIM card cutting services, the fiercest competition among China Mobile's local branches comes from Jinan Mobile, which pioneered the precedent of "prepaying for phone fees and receiving a free phone" for China Mobile. Users need to prepay 6,800 yuan in phone fees, commit to staying connected for 3 years, and simultaneously meet a minimum monthly consumption of 268 yuan.
What confuses Unicom is where Jinan Mobile gets the inventory for its iPhone 4 packages, leading to a war of words.
"Our inventory is legitimate goods, sourced from some of our loyal dealers who obtained them from Unicom's major clients," a client manager of Jinan Mobile privately revealed.
However, online searches reveal that a person from Shandong Unicom is posting articles everywhere accusing Jinan Mobile of being the biggest "scalper" selling gray-market goods.
Currently, whether Jinan Mobile has sold gray-market iPhone 4s is difficult to verify. However, industry insiders point out that as a central state-owned enterprise, selling gray-market goods would clearly be illegal and absolutely unacceptable. Competition should have its limits.