If the US is any indicator post-iPhone launch, data is going to become a much bigger cost center for China, with 5x ( 102 million) the regular mobile web users than the US ( 22 million), and could potentially threaten China Mobile’s 52% EBITDA margin. If China Mobile added a subsidy, they could supply the electricity necessary to bring China Mobile’s Android, and the market for mobile services to life. That is why China Mobile has been struggling to launch an oPhone, (where the ‘o’ stands for Open Mobile System (OMS)). Until now the only relationship with Chinese consumers the carriers have has been to give away golf balls to high-spending customers, rather than bait consumers with data guzzler devices to drive monthly revenues.īut carriers don’t particularly benefit from launching the iPhone as much as they would from launching an Android handset which gives the carrier app store revenues. With demand like that for handsets, China has a chance to drive serious handset penetration if they start offering subsidies.
