China’s Cordless Phones

WSJ writes that the no-frills phones are a big hit:

Like most people in this rapidly modernizing city, accountant Chen Ran is rarely caught without her mobile phone. She even bought a second one last November.

But Ms. Chen didn’t trade up: Her new phone doesn’t boast a camera or a fast Internet connection. Service is spotty and she can’t even use it outside Beijing.

For Ms. Chen, it’s worth it: The calling plan for the phone — part of a fast-growing Chinese service called “Xiaolingtong,” or “Little Smart” — cost a one-time 500 yuan, or about $61, and it took her more than six months to use up her allotted minutes (by contrast, her high-tech cellphone costs $38 per month). She doesn’t have to pay for incoming calls, so she instructs friends to call her on this low-tech phone. “Many of my friends are using it,” she says.

There are already an astounding 50 million subscribers in China to Xiaolingtong, including many in big cities like Beijing. This wireless/fixed-line hybrid is little known outside of China and Japan, where it originated about a decade ago.

Most Xiaolingtong phones offer no frills: Users can make local calls and send simple text messages, but they can’t “roam” from one city to another. The phones, as small and sleek as regular cellphones, are powered by rooftop-mounted base stations, which are specially equipped antennas that send signals a little more than a mile. That’s a lot farther than cordless phones that allow callers to roam as far as their backyards before losing reception.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.