The beginning of the end for PHS in China

It was forecast, now it is sure. Until 2005, PHS was a bright star in the Chinese telecom landscape, successfully bitting in the copper fixed line market. The number of subscribers jumped to over 90m, and constitute the bulk of fixed-line operator growth. But fixed-line business has lost ground to mobile services, and the loss of PHS market will be a big blow for fixed line operators: China Telecom and China Netcom. So PHS could act as the lert signal that they have to seek a business transformation right now. But it is impossible to rapidly shift almost 100m people to another technology. The transformation should be gradual and over several years. In the meantime, China Telecom and China Netcom will continue to upgrade PHS with new value-added services in order to keep alive the cash cow PHS as far as they can.