Chinese Mobile Data Usage to Make Great Leap Forward

Data traffic on Chinese mobile devices jumped almost 50 percent last year but overall usage was modest by global standards, reflecting low consumption in rural areas that hasn't gone unnoticed by telecoms firms.

Average monthly data usage on all types of mobile devices, including smartphones, topped 200 megabytes (MB) per user for the first time in 2014, the Ministry of Industry and Information Technology said last week. That's equivalent to downloading 50 songs from the Internet and compares with a global monthly average of 819MB per smartphone last year, Cisco figures show.

China Mobile, the country's biggest wireless carrier, is looking to expand its fourth-generation (4G) high-speed coverage in rural China after increasing its 4G subscribers to more than 90 million last year from zero a year earlier. Domestic smartphone makers, such as Coolpad, Lenovo and ZOPO, have rolled out sub-$100 4G handsets while Apple and Samsung Electronics fight for dominance in the premium segment.

China's three carriers, which includes China Telecom and China Unicom, are expected to market their services aggressively to rural China as online content and services rise and technology becomes more affordable. Immediate obstacles would be coverage and signal reliability. By 2017, sales of 4G-capable devices in China are set to more than treble to 405.9 million units compared with last year, Hong Kong-based market research firm Counterpoint estimates.

China's 4G rollout has widened its divide with other Asian countries, such as Indonesia and India, where 4G has yet to catch on. Cheaper handsets may be key to igniting demand in India. Lenovo has launched a budget 4G smartphone, Lenovo A6000, priced at 6,999 rupees ($112). That's cheaper than Xiaomi's Redmi Note 4G. But those prices are still a premium to many 3G phones, easily available for under $100.

© Thomson Reuters 2015