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China Mobile Gives Pushmail a Harder Push

Sohu IT, 11/05/07

According to an informed source, China Mobile (NYSE: CHL; 0941.HK) is promoting commercial use of a Push Email service, which will integrate with its Feition mobile instant messaging service. It is also pushing client-end Push Email applications, which will be pre-installed in almost 100 models of mobile phone.

LENS: China Mobile offers two push mail services, one from Blackberry and a second self-branded service called "Push Mail" that is actually provided by Beijing-based communications solutions provider Leadtone Wireless. China Mobile entered into an official cooperation agreement with Leadtone in December 2005, prior to which the two firms co-launched trials serving more than 30 corporate users in Beijing, Tianjin, Shanghai, Guangzhou and Jiangsu.

China Mobile started offering Blackberry service in May 2006, five years after RIM made first contact with the operator in 2001. However RIM did not get a green light from the MII to sell Blackberry devices until July 2007, and then only on condition that it pass all network access tests. By late October, it was reported that Blackberry handsets had completed 80% of the required network access tests and were expected to be made available in China at the end of this year (see "Blackberry to Use TCL Handset License", MW 10/26/07 issue). However, there has been no news about whether Blackberry enterprise severs will be granted access to Chinese sales channels. According to Blackberry's official China website, RIM is currently offering the enterprise servers free of charge.

When China Mobile rolled out its own-branded push mail service, it positioned it mainly as a corporate service aimed at medium-to-low-end clients, leaving the high-end for Blackberry. Among China Mobile's earliest push mail clients, Beijing TV subscribed to Push Mail, while CNOOC subscribed to both Blackberry and Push Mail. However, China Mobile repositioned Push Mail in 2007, putting greater emphasis on the personal user market, including the addition of "personal edition" specifications during national promotion campaigns. To accelerate personal user adoption of Push Mail, Guangdong Mobile, one of China Mobile's most progressive subsidiaries, started offering free Push Mail service to all its subscribers at the end of October (see "Guangdong Mobile Offers Free Pushmail Service" MW 11/02/07 issue).

The standard monthly service packages for Push Mail range from RMB 6 to 18 per month. For Chinese Blackberry service subscribers, there are currently two packages available: RMB 398 per month, which includes 50M of domestic GPRS traffic and RMB 598 per month, which includes 398M of domestic GPRS traffic and 2M of international roaming GPRS traffic.

China Mobile does not disclose official user statistics for its Push Mail and Blackberry services. However, for Push Mail, Guangdong Mobile reportedly had 2 mln users by the end of 2006. As Push Mail service is based on GPRS, and Guangdong province generates more than 50% of China Mobile's total GPRS traffic, these 2 mln Push Mail subscribers may make up a significant portion of China Mobile's total national user base.

As for Blackberry, Chinese business magazine Global Entrepreneur reported in August 2007 that Shanghai Mobile had 670 corporate Blackberry subs, accounting for more than half of the total in China. Most of China Mobile's Blackberry clients are China branches of multinational companies and professional service organizations.

China Mobile's pushmail services face competition from other pushmail service providers, including Unicom's Redberry (see Unicom Launches 'Redberry' Push Email Service, MW 4/07/06 issue), leading ERP software provider UFID's Umail (see Ufida to Launch Push Email Service, MW 12/01/06 issue) and other mobile mail service providers. Free WAP sites have also gained traction in this area. Popular WAP site Moabc, for example, rolled out its mobile mail service Momail in March 2006, attracting over 1 mln registered users within 11 months.

The biggest obstacle facing broader uptake of pushmail and mobile mail services is existing user habits. Instead of e-mail, most Chinese users tend to use SMS for simple text and mobile IM for multimedia text or text with greater volume. The Chinese Internet Network Information Center (CNNIC)'s June 2007 Internet User Habits Survey showed e-mail penetration among Chinese netizens at 55.4%, compared with 92.5% for Americans and 91% for South Koreans.

Another barrier to uptake is the cost, both in terms of compatible handsets and China's relatively high GPRS fees. Blackberry, Push Mail, and Umail all require that the user purchase a smartphone (Unicom's Redberry, basically an upgrade of its MMS service for CDMA1X users, is the exception, requiring only a CDMA1X handset). According to statistics from CCID, of all handsets purchased in China during the first three quarters of 2007, only 6.4 mln, or 18%, were smartphones.

Although Blackberry devices are not yet available for sale in mainland China, other smartphone brands such as Nokia and Sony Ericsson support Blackberry services. Some users have also brought Blackberry devices back from overseas. Blackberry devices smuggled into the country, although illegal, have also appeared for sale on a number of domestic websites.

Keywords: China Mobile CHL 0941.HK mobile e-mail Feition mobile IM Leadtone

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