BEIJING-Expansion of China’s PHS network called Little Smart in the suburbs of Beijing and Tianjin has been put on hold by the Ministry of Information Industry (MII), which fears a negative impact on the listed mobile-phone carriers China Mobile and China Unicom.
Little Smart is not available in China’s major cities, but has nevertheless become an important revenue earner for fixed-line carriers China Netcom and China Telecom. Little Smart does not provide roaming, but call charges are only about one-fourth of regular cellular call prices, making it an attractive alternative for lower-income earners.
According to UTStarcom, the major equipment supplier of the Little Smart system, the number of subscribers will surpass 10 million by the end of the year. There are around 175 million customers on the GSM networks and 1 million on China Unicom’s CDMA network.
Yang Peifang, a telecom researcher at the China Institute of Telecom Research, was quoted in the China Daily’s Business Weekly saying: “Technically, PHS is not updated, and its rapid development simply indicated the abnormal situation in China’s telecoms market.”
Some analysts argue that if the MII allows the mobile carriers the freedom to set their call charges independently, prices will drop, and Little Smart will lose its price advantage.
