Mobile Phone Service: When Monopoly Meets Economy

chinamobileWith the development on both economics and technology that the cell phones are becoming daily communicating tools for both college students and people nowadays in China. But for college students like us, with quite limited financial competence, and can afford not much payment on such service, special packages that can significantly reduce such cost are quite welcome. But due to its monopoly position, the service fee is still quite high in some regions, especially some undeveloped regions like Hubei that can even contradict with the local living cost level. Here what I mentioned in following text are of the service from China Mobile, the largest service provider on wireless connection in China.

Apparently, the pricing of the cell phone in China has been reduced significantly. Still remember the first time that I get my first cell phone from my daddy, when we preferred to send short messages with each other, without any call due to the high cost and dual-paying policy. That is, you are entitled to pay no matter whether you are making a call or just receiving one from others.

Then it comes to 2005 when I went to Nanjing for my continuing study in Ginlin College, NJNU, where the receiving fee were waived for a limitation on time for 500 minutes under a special package for college students. It is the most cost-effective package that I met even till now. We can make a local call with the rate of 0.2 yuan/min and 0.3 yuan/min for a long distance call in China. And as an important content within this 20-yuan package, we were entitled for 400 free messages no matter who the receiver is, and whether he is the customer of China Mobile or not.

Then in 2007, I came to Wuhan for my master’s degree in ZNUFE, where I suffered the expensive cell phone service. According to my previous experience, I firstly selected the “M-Zone”, a special package designed for college students. But soon I found great problem:

  • High Rate. Comparing to the similar service that I have used in Nanjing, the rate for local call here is 0.25 yuan/min, and there is no discount rate for long distance call. It is quite common to see students using IC cards to make a call at a public telephone, but such sight has been eliminated in Nanjing;
  • Limitation on Short Message. Comparing to the package in Nanjing, the price here is cheaper, with 15 yuan /month, including 200 short messages, but be careful! A MESSAGE TO THE CUSTOMERS THAT ARE NOT SIGHED WITH CHINA MOBILE IS NOT INCLUDED!
  • Forbidden on Roaming. This service is only available for 5 months a year, for two important vacations, summer and winter. If you are willing to travel to other places other from vacations, you are suggested to transfer your package. It is quite an incomprehensive decision.

Taking a sight on the economy development data such as CPI and GDP, you will find Hubei is owning quite limited economic conditions, which, reasonably interpreted, means a lower consuming level comparing to the regions of Shanghai and Jiangsu, where there are offering cheaper packages and the average cost on mobile communications. I don’t know why such thing can happen, but I suppose the only explanation as monopoly.

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