Can Xiaomi ‘Mi Mobile’ Compete With China’s Big Carriers?

24 Sep 2015 | Author: | No comments yet »

China’s Xiaomi announces telecom carrier service, new flagship handset.

Xiaomi Inc, China’s leading smartphone maker, announced on Tuesday two prepaid wireless plans to mark its debut as a mobile virtual network operator (MVNO) competing against China’s national carriers.Taipei: Xiaomi Corp. is getting into the wireless-carrier business as the Chinese device maker tries to capitalize on reforms affecting government-owned companies. MVNOs, which purchase network capacity from large carriers and resell mobile plans under their own branding, have failed to gain traction in China, where three state-owned giants dominate the telecoms industry. But as China’s most popular handset brand, Xiaomi’s foray into the sector could finally kickstart the MVNO industry and provide a boost for Chinese telecom regulators who have sought for years to introduce market competition against the trio of state-owned carriers often criticised for their poor profitability and perceived bloat.

Users will pay per minute of talk time, per text message sent, or per megabyte of data transmitted across a network operated by China Unicom (Hong Kong) Ltd. The launch comes less than six months after Google Inc announced it would launch an MVNO service in the United States called “Fi” that piggybacks off Sprint and T-Mobile’s networks. The Mi 4i sports a five-inch display and is powered by a 64-bit processor, Xiaomi claims it is the first device equipped with the Qualcomm Snapdragon 808. At a Tuesday launch event in Beijing, Xiaomi, which was valued at $45 billion after a December funding round, also unveiled its new flagship handset called the Mi 4c, a 1299 yuan ($203.76) Android smartphone featuring a Qualcomm processor, 5-inch display and 13-megapixel camera.

Founder Lei Jun is moving the start-up, valued at US$45 billion (S$63.8 billion) after a funding round last year, into online finance, smart-home devices and air filters. In addition to the pay-as-you-go plan, Xiaomi next month will offer a package of ¥59 ($9.26) per month for 3 gigabytes of data usage through China Telecom Corp.’s network, it said.

The basic Mi 4c comes with 2GB RAM and 16GB in storage and will cost 1299 RMB ($203), an enhanced version — 3GB RAM and 32GB storage — will be available for RMB 1499 ($235). That allows them to resell mobile packages from telecom companies using their brand/name, and now Xiaomi is putting that to use in China. ‘Mi Mobile’, Xiaomi’s mobile offering, has two initial services. There’s a pay-as-you-go tariff charged at RMB 0.10 (sub $0.02) per voice call minute, SMS, or 1MB of data, and a RMB 59 ($10) monthly bundle that gives users 3GB of data. The company is the country’s top smartphone seller, and China accounted for the majority of the 34.7 million smartphones that Xiaomi sold in the first half of this year, but Xiaomi said it will fall short of its sales target for 2015. So, alongside its push to sell wearables and smart home devices, a move into mobile services is a way to strengthen its brand among customers and pick additional revenue.

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