China: PHS perspective

PHS market in China: Globally, the PHS market is a 70m subscribers market, up-to-now driven by very low prices for handsets and services. It is a low-mobility service and cannot directly compete with cellular services. With recently announced strategies from mobile operators (Mobile and Unicom) to target low-income Chinese households, with low-cost handsets and basic mobile services, PHS could feel the threat. In addition, a survey conducted by Analysys shows that fixed-line carriers are reducing their investments in PHS (down to $ 450m this year), and that its growth has begun to slow down. If successful, mobile operator’s strategies could recombine very rapidly the Chinese telecom landscape, and the PHS service is doomed to lose its market.