China Mobile looks to data services

China Mobile Ltd saw its data traffic more than double in the first half of the year, as the world's biggest phone company by number of users shifts focus from voice and message services to data services. Wireless data traffic jumped 129 percent in the first six months to 891.4 billion megabytes, up from 389.2 billion megabytes in the same period last year. The figure follows an increase of 187 percent in 2012. Wireless data traffic revenue grew 62.2 percent to 47.4 billion yuan ($7.68 billion) in the first half, up from 29.2 billion yuan in the same period last year. Revenue from data services accounted for 33.5 percent of the State-owned company's telecommunications services revenue in the first half, up from 28.5 percent last year. "The rapid of growth of data services highlights the company's transformation from a traditional phone carrier to a comprehensive data service provider," said Li Yue, the company's chief executive officer. Li added that the bulk of the data traffic was generated by online video services. Smartphones are the main device to access data services, but laptops and tablets also played a part. The Beijing-based China Mobile is one of the many mobile carriers around the world that are transforming their businesses in the wake of competition from social and messaging services such as Tencent Holdings Ltd's WeChat, which allow users to send text messages, images and voice clips through mobile networks. An increasing number of smartphone users are choosing to use the apps to the detriment of the carriers' short message and voice services to communicate with friends and family members, as such services are much cheaper. It costs at least 100 yuan to send 1,000 text messages through the carriers' services, but only 3 to 5 yuan to send the same number of messages using the apps. China Mobile said revenue from voice services, mostly phone calls, dropped 1.2 percent in the first half to 175 billion yuan, following a 1.1 percent rise in 2012. Revenue from short message and multimedia message services dropped 5.5 percent, after a 4.8 percent decrease last year. To boost its data services, China Netcom Group Corp (Hong Kong) Ltd - the nation's second-biggest wireless carrier after China Mobile - earlier this month joined hands with Tencent and launched a SIM card that provides WeChat users online with top-up services, more traffic volume and faster Internet access. China Mobile's data services are expected to get a further boost after Beijing recently pledged to start licensing fourth-generation, or 4G, networks before the end of the year. Beijing has indicated that it favors TD-LTE 4G networks, or Time-Division Long-Term Evolution, backed by China Mobile, because the network's core technology was developed by domestic companies. The technology was developed specifically for China and is expected to serve a quarter of the global market by 2016.