Cordless Phones With No Frills Are Hit in China
BEIJING -- 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.
The global telecommunications industry keeps pouring money into futuristic wireless services with mystifying names like 3G, EVDO and WiMax. But in China, the world's largest phone market, people clamor for something much more basic: a simple service based on cordless-phone technology.
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.
Yet call quality can be patchy because the network is lower-powered than traditional cellphone systems. And users sometimes have problems getting a signal when they move around within a city and their call moves to a new base station.
The service exploded in China because of the country's huge base of poor and rural residents, most of whom have little use for high-end phones with Web browsing or international roaming. Government policy also played a role: For the past few years, Chinese regulators have quietly allowed Xiaolingtong to flourish even though the operators of the service are fixed-line phone companies without official wireless licenses.
"There was always this fear that [regulators] would step in and pull the plug," says Ted Dean, an analyst with telecom consulting firm BDA China in Beijing.
Not now. In the last year, Xiaolingtong has marched into China's biggest cities, such as Beijing and Shanghai, and attracted increasingly sophisticated customers. The service also has become a major growth driver for huge Chinese phone companies whose stocks are listed, or about to be listed, on the New York Stock Exchange, including China Telecom Corp. and China Network Communications Group Corp., which is known as China Netcom. Analysts say the majority of China Netcom's new subscribers are Xiaolingtong customers. Plus, about 36% of customers of China Mobile Ltd., China's largest cellphone-service provider, also have Xiaolingtong phones, according to a recent BDA study.
More broadly, Xiaolingtong has raised questions about just how successful more advanced -- and expensive -- wireless services will be when they finally arrive in China.
For now, the low-tech Xiaolingtong seems to be all many people need. Some have abandoned their old mobile phones altogether. Beijing student Zhang Chengyuan, 17, says his father recently became angry with his excessive cellphone bills and ended up confiscating his phone and replacing it with Xiaolingtong. Mr. Zhang says he now spends only around 100 yuan a month, compared to the 200 yuan he spent previously, chatting and exchanging short text messages with classmates.
"Every year, it surprises us how much growth there is [in Xiaolingtong]," says Roger Heinz, a vice president with Lucent Technologies Inc., one of the few big, foreign telecom-equipment providers supplying Xiaolingtong gear in China. Mr. Heinz declined to break out Lucent's sales of Xiaolingtong equipment but says the business is profitable.
Mr. Heinz says he has heard predictions of Xiaolingtong's demise for at least three years, particularly as the hype over "third-generation" mobile gizmos -- those offering high-speed Internet access for viewing TV clips and playing online games -- has reached new heights. Licenses for the so-called 3G service could be issued in China next year. Still, he doesn't see Xiaolingtong disappearing "anytime in the near future," he says. "It's pretty entrenched and people like it."
Per-minute charges for Xiaolingtong calls can be one-quarter to one-fifth the rates of regular cellphone calls, according to investment bank Lehman Brothers. Xiaolingtong networks are less expensive to run than cellphone networks because of their reduced power. Costs for operators like China Telecom and China Netcom also are low because they use excess capacity on their own fixed-line networks to complete calls instead of needing to lay new cable between base stations.
Of course, the cost is Xiaolingtong's biggest selling point. Ying Wu, the co-founder of the biggest Xiaolingtong equipment maker, UTStarcom Inc. of Alameda, Calif., says in a company video that he wants wireless service to be "as cheap as using water and electricity."
So why hasn't that vision caught on in other developing countries? One factor is the changing economics of the mobile business: As rates for traditional cellphones and calling plans come down, Xiaolingtong's service doesn't look quite so cheap, says Charles Zhang, who heads investor relations for UTStarcom in Beijing. It is also cheaper for companies to provide Xiaolingtong service with large volumes of customers -- not many places outside China, home to 1.3 billion people, have that kind of volume.
Motorola Inc., one of the biggest telecom-equipment providers to China, has never been in the Xiaolingtong business. The company says producing Xiaolingtong phones is not very profitable. Plus, it insists it's a passing fad. "We still think it's going to be going away," says Motorola President and Chief Operating Officer Mike Zafirovski. He was in Beijing recently to show off many of the company's cutting-edge -- and much more expensive -- products at a trade show.
During a roundtable discussion at the event, neither he nor two other top Motorola executives mentioned Xiaolingtong when asked by Chinese reporters what technology Motorola was developing for the Chinese masses. Earlier, however, when asked about Xiaolingtong, Mr. Zafirovski allowed: "It's a little more significant than we had anticipated."
“小灵通”中国受宠
像北京这座迅速走向现代化的城市中的其他居民一样，当会计的陈冉（音）几乎走到哪儿都带著手机。去年她竟又买了第二部手机。
但她并没扔掉第一部，因为她的新手机没有新潮的照相或无线上网等功能，而且使用范围也很有限，出了北京就没法用了。
但陈冉觉得新手机买得很划算。这部低科技含量的“小灵通”手机的话费套餐只要人民币500元，约合60美元。她把通话时间恰好控制在话费套餐提供的优惠时间以内。接听电话则无需付费。她通知亲朋好友用这个新号码联系她，她说，“我的很多朋友都用这个”。
全球各地的电讯企业都在向3G、EVDO和WiMax等各类让人不明所以的前卫无线通讯服务抛撒金钱，但在中国这个全球最大的电讯市场上，人们更看重那些最基本的功能：基于无绳电话技术的简单无线通讯服务。
这种低科技含量的通讯技术已经在中国吸引了多达5,000万用户，其中不乏北京等大城市的用户。这种无线/固话混合技术大约10年前起源于日本，现在除了中国和日本以外几乎无人知晓。
大多数的小灵通电话只提供最基本的服务：用户可以拨打本地电话，发送简单的文字短信，但不能从一个城市到另一个城市漫游。小灵通手机小巧圆润的外观酷似普通的手机，信号通过架设在屋顶的基站传送，实际上这是一种特殊配置的天线，可以在方圆2公里的范围内传送信号。这已经比无绳电话强多了，靠一部无绳电话，你可能刚走到后院就没信号了。
小灵通功能简单，也就意味著通话质量较差。有时用户还没走出城市范围，但信号已在不同基站间转接，就有可能出现信号故障。
但中国大量的低收入和农村居民为这种服务提供了广阔的市场，大多数居民都没用过能上网或国际漫游的高端手机。政府政策也是原因之一：过去几年，中国的监管机构低调允许小灵通推广，即使这些运营商是不具备无线服务牌照的固定电话公司也视而不见。
电讯咨询公司BDA China驻北京的分析师泰德?迪恩(Ted Dean)说，监管机构随时会干涉阻止，这种风险时时存在。
但现在不怕了。去年小灵通终于打入了北京、上海等大城市，吸引著越来越多各式各样的手机用户。对中国电信(China Telecom Corp.)和中国网通(China Network Communications Group Corp., 又名：China Netcom)等要么已经，要么即将在纽约上市的中国大型电讯企业来说，小灵通也成了它们的主要业务增长点。分析师称，中国网通的大部分新增用户都是小灵通用户；另据BDA最近的调查，中国最大的移动电话公司中国移动(China Mobile Ltd.)有36%的客户都拥有一部小灵通电话。
更深入一层来看，小灵通的繁荣兴旺提出了这样一个问题：更先进更昂贵的无线服务登陆中国时能取得多大成功呢？
眼下看来，小灵通似乎就能满足很多用户的需求，有些人甚至用小灵通取代了原来的手机。17岁的北京学生张城垣（音）说，看著他的手机话费帐单上的数字越来越大，他父亲很是生气，于是没收了他原来的手机，给他换了一部小灵通。他说，现在每月话费从以前的200元降到了100元左右，只是用来和同学聊天或者互发短信。
朗讯科技(Lucent Technologies Inc.)副总裁罗杰?海因兹(Roger Heinz)说，小灵通业务的增长年年都让他们喜出望外。朗讯科技是中国少有的几家外资小灵通设备供应商之一。海因兹拒绝透露朗讯小灵通设备的销售情况，只说这是一项盈利业务。
海因兹说，他也听到过小灵通至少三年内就会销声匿迹的预言，尤其是在目前3G热潮的推动下。不过他认为近期内小灵通不会消亡。他说，人们喜欢用它，已经养成习惯了。3G手机可以高速接入互联网，可以欣赏电视短片，还可以玩网络游戏。中国明年可能会发放3G牌照。
据雷曼兄弟(Lehman Brothers)的调查，小灵通的每分钟通话费只有普通手机的四分之一，甚至五分之一。小灵通设备的运营和养护费用也比移动通讯网络低。对中国电信和中国网通来说，他们可以利用自己闲置的铜芯固话网络来结转小灵通信号，而无需在各个基站之间铺设新的线缆，所以成本很低。
当然，廉价正是小灵通最大的卖点。最大的小灵通设备生产商UT斯达康(UTStarcom Inc.)的共同创始人吴鹰曾经表示，他希望无线通讯的费用能变得像水、电一样便宜。
那么，为什么小灵通没有在其他发展中国家推广开来呢？UT斯达康驻北京的投资关系主管Charles Zhang认为，原因之一是移动通讯业务的变化：传统的手机服务和套餐费用不断下降，小灵通看起来也就不是很便宜了。另外，用户规模越大，提供小灵通服务的公司营运费用也就越低，但不是每个国家都有中国这么庞大的人口的。
作为中国最大的电讯设备供应商，摩托罗拉(Motorola Inc.)就从未涉足小灵通业务。该公司称，这项业务盈利性欠佳，而且也只会是昙花一现。摩托罗拉总裁兼首席营运长麦克?扎菲罗夫斯基(Mike Zafirovski)说，小灵通很快就会失宠。他最近刚刚访问过中国，在摩托罗拉的展示会上向公众介绍了许多该公司的最新产品，当然样样身价不菲。
在这次展示会期间的圆桌讨论会上，当中国记者问及摩托罗拉为中国用户开发了什么新技术时，他和另外两位摩托罗拉高级管理人士都绝口不提“小灵通”一词。不过，在早些时候被问到对小灵通的看法时，他说，小灵通的影响力比公司预料的要大。
