"Is that a beautiful young lady? If it is, do not hang up; but if not, please call me later..."

Wang Xing, the father of an 18-year-old, thought he was being teased when hearing such a voice over the phone while waiting for his son to answer the call.

"I cannot understand that," said Wang, although his son explained to him later that it was just a kind of ringtone.

No matter how hard older people find it to understand, individualized colouring ring back tone (CRBT) has become increasingly popular among young handset users in China, turning this into a lucrative market.

The number of CRBT subscribers in China will hit 22 million by the end of this year, with a total market size of 860 million yuan (US$103.6 million), according to a recent report by leading Chinese market research house Analysys.

China has nearly 300 million mobile phone users.

Among CRBT subscribers, 90 per cent are between 16 and 30.

"Many people are beginning to subscribe to CRBT services, and the market is in a period of rapid growth," said Zhao Yuning, an analyst at Analysys.

The CRBT business was first introduced to the nation by China Mobile last May and China Unicom followed early this year.

The number of CRBT users was 2 million by the end of last year, with its market size valued at 16.8 million yuan (US$2.02 million).

The CRBT business has expanded quickly as it caters to growing demand for individualized signals, especially among the young, said Zhao.

Moreover, ringtones can be downloaded to and played on all handsets regardless of the specific model and thus easily spread among handset users, said Zhao.

The low charge for CRBTs also paves the way for its popularity, he said.

The monthly rental fee is usually only 10 yuan (US$1.20), with the user paying additional fees for each ringtone download.

Users normally download less than one ringtone per month, said Zhao.

"CRBT will be a stable source of revenue for carriers, who are counting more on value-added services," he said.

According to Zhao, CRBT can bring between 5 yuan (60.2 US cents) and 7 yuan (84.3 US cents) to carriers' ARPU (average revenue per unit).

"It is significant, compared with an ARPU of 100 yuan (US$12.05) nowadays," he said.

Insiders estimate that CRBT will bring carriers, China Mobile and China Unicom, a total revenue exceeding 100 million yuan per month (US$12.05 million) next year.

And they claim 80 per cent of handset users in China will use CRBT services by the end of 2007. Official statistics indicate China is expected to have more than 400 million mobile phone users by that time.

According to Zhao, China's CRBT market will sustain a strong annual growth rate until 2008. After that the business will grow at a steady pace.

But looking into the future, CRBT probably will not be such an important source of revenue as other wireless valued-added services including multiple-media messaging services (MMS), interactive voice response (IVR), and online games for handsets, said Zhao.

"CRBT is not based on interactive services as IVR or online games, and therefore one user may not generate continuous demand," he said.

Moreover, the business simply offers ringtone downloading, without video effects, which is more attractive to users, he added.

The upcoming 3G (third-generation) technology will enable the smooth operation of more video and audio services that do work well in the existing telecoms network. And CRBT will gradually lose ground, becoming just one of the many options available to carriers and service providers, noted Zhao.

CRBT is already a mature value-added business in other Asian countries and regions including South Korea, Japan, Singapore, Hong Kong and Taiwan, where the SPs prepare diversified ringtones in large quantity.

About 60-70 per cent of mobile phone users in South Korea are CRBT subscribers, covering all age groups.

In comparison, Chinese SPs have yet to develop more ringtones with innovative ideas, since "individulization is the most important feature that lure users," said Zhao.

(Business Weekly 11/10/2004 page16)