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China and India Mobile Growth

January 24th, 2003 · No Comments

From the Economist on the differences between how the wireless revolution has shaped up in the two countries:

In India, seven years after the launch of mobile-phone services, there are only 10m users. In China half that number 5msign up as new subscribers every month.

The difference, according to the article, is because of the way the two markets have been regulated.

India chose a licensing policy that divided the country into 22 regions, each with two licences to operate mobile networks. Bidding in multiple regions was restricted. This aimed to promote competition, but led to a fragmented market with a baffling array of operators, none of which achieved economies of scale. Limited spectrum also hurt service quality.

China fostered competition by creating a second state-owned operator, China Unicom, to fight the incumbent, China Mobile. Regulations favoured the upstart. China Unicom was, for example, allowed to undercut China Mobile by 10% in 1999. Prices fell, helping the market to grow. And there was plenty of spectrum.

Tags: Telecom

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