BIZCHINA> Weekly Roundup
Mobile telecommunication upward
(China Daily)
Updated: 2008-04-28 11:31

Xu Feng still remembers the day he got his first mobile phone 21 years ago.

In December 1987, one of Xu's relatives who worked at Guangdong Post & Telecom management Bureau told him the government institution was going to make 100 cell phones available in the name of supporting the upcoming 6th National Athletic Games and asked whether he was interested in buying one.

Xu, a tech-savvy guy in his 20s, decided to take the offer, which made him one of China's first mobile phone users.

"At that time, the government still didn't know how to price the phones, so they told me to pay a deposit of 20,000 yuan and let me take the mobile phone," recalls Xu.

The mobile phone that Xu took 21 years ago is far from the slim and stylish pocket device that we are familiar with now.

The handset was as large as a brick and weighed around two pounds, which made it resemble a weapon in many Hong Kong movies at the time.

Xu still remember the curiosity and envy on people's face when he told them the "brick" he was holding was a wireless device that could make phone calls. To show off he even made a call to Hong Kong in front of a crowd of friends.

Under tight control

In 1987, mobile telecommunication was still regarded as a sensitive industry that could easily raise national security issues and even ideological debates. By the end of 1987, the number of mobile phone users like Xu only numbered 700 in China, most of whom were businesspersons, officials and military users.

Because of the industry was strictly regulated at that time, demand for mobile phones greatly surpassed the supply. In some underground markets in China, a handset was sold at 60,000 yuan, not including the phone bill which could reach as high as 10,000 yuan per month.

"At that time, a mobile phone was a tag of wealth and upper social status," wrote Shi Wei, a researcher with the Institute of the Economic System and Management under National Development and Reform Commission (NDRC), in an article published last year. "For most people, its social implications have far outpaced its real functions."

In the first six months, Xu's mobile phone could be used only within Guangzhou. The service was later gradually expanded into other cities including Shenzhen, Shanghai and Beijing.

Mobile phones did not see an explosive growth until the late 1990s when China started to commercialize its mobile telecommunication industry and adopted the second generation mobile phone technologies, GSM and CDMA, which, compared with the old analog technology, provided a larger service capacity and value added services such as short text messages.

In the 1980s and early 1990s, both China's fixed-line and mobile networks were exclusively run by China's Ministry of Posts and Telecommunications, instead of telephone companies.

Even when the service became available to the general public, it was difficult to sign up due to the bureaucracy.

For instance, by the end of 1992, there was a waiting list of 1 million households wanting landline service.

They had to spend 5,000 yuan to 6,000 yuan to sign up and it usually took several months, or even years before the phone was installed as profits and prompt service were not what the government cared about. In the mobile phone sector, the situation was even worse due to the monopoly.

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