Thursday, February 01, 2007

one-way billing model

Major mobile operators in China annouced the one-way billing models from February this year, including China Mobile Beijing, China Unicom Beijing, China Mobile Guangdong, China Unicom Guangdong. I still remember last December when I first disclose this in our paper, many people were suspious of it, and even some analysts from investment banks called me to confirm. Now I could finally tell everyone that I am right and they should have trusted me at the first hand.

Speaking of this, two things I would like to expand a bit more. First, the power of media. The Internet really made the world flat. I remembered when my story was published that day, many mainland newspaper translated and republished again. Checking, the best news website in China, you could find at least one hundred translated pieces in print media and online media citied our paper. That's amazing. No one could believe it ten years ago when a Hong Kong newspaper published something and the next day the whole story spread nationalwide. But today it is true. Even big financial media such as Bloomberg and Reuters even quoted some newspaper from nowhere on specific news. My question is how we could clairify the quality?

The next thing is whether mobile operators will suffer from this one-way billing model. Haven't really read some pieces thoroughly covering the whole effect brought by this new model. But I always believe the mobile operator stocks have changed from "fast growers" to "Stalwarts" in the past years. They could generate a lot of cash but not grow as fast as before. They are still good companies with strong cash flows to support, but don't expect it could add another 400 million users in five years. So the one way billing model to them may not be a good news at first, as it will immediately suffer from the loss of revenue from the receivers' side, but in the longer term, it will benefit because of more active calls and talking minutes. So better grade it as "sell" in one year, and then "buy" after that.

The thing I don't quite figure out is the China Mobile stock rose by 1 percent when my story on the introducing of one-way billing system was published that day. Come on, everyone knows it will be bad news. Sigh, the capital market is always hard to beat.


Mr A.K. said...

Anyhow, I don't believe that this one-way measure implicates the spontaneous self-improvement of the operators. It would have come earlier if the market is equipped with the healthy competition mechanism.
And it is the five-year transition period granted by WTO coming to the end that the domestic monopolies, reluctantly, take such steps.

Amy or koala said...

oh, on the WTO point, a little bit confused. They are not bringing foreign competitors this time.

Mr A.K. said...

It's true.But I was saying that the domestic giants had felt the presure coming-up. Although less developed, they are smart enough to take pre-emptive action before the multinational peers really enter the market.
This phenomena is actually not alone. Some other sectors are experiencing the same kind of pre-WTO "reform"

PS: thank u 4 ur reply, Amy

Amy or koala said...

you are right in saying many sectors are experiencing the same kind of "pre-WTO reform".A.K. but I always believe telecom sector will be one of the most protect sectors in every country, including China. Foreign investors couldn't enter the industry easily, especially the infrastucture construction and voice providing service. I think all this one-way billing model is under years' of complain from customers so NDRC, a goverment planner, may require mobile operators to do something.