By Wan Jianmin

Just like most mobile phone subscribers, Ms. Ke Yifan does not have the habit of going to China Mobile's business hall to have itemized list of phone charges printed every month. But she does not know how the calls cost her so much each and every month.
 
She has been wondering why the phone bill exceeds 400 yuan every month.  In October 2003, Ms. Ke went to a business hall of China Mobile Shantou Branch, asking for a list of her phone charges in October. When she got the list, Mr. Ke was shocked.

The list recorded 51 calls between Ms. Ke and her husband in that month, yet on the list of her husband's phone charges, there were only 36, and the difference was as much as 15 calls. On the list, it was recorded that Ms. Ke had sent 15 short messages to the number of "9966", a number that Ms. Ke has never heard of. A funny thing is, Ms. Ke turned into a female chevalier according to the record.  In addition, according to advertisements put out by China Mobile Shantou Branch, discounts are offered for special periods every day and holidays; yet the list indicates that all calls made by Ms. Ke were charged at full rate. There were no records of discounts at all.

Ms. Ke's story is no big deal to China Mobile, but it is for Ms. Ke herself. In fact, it is huge for the nearly 300 million mobile subscribers in this country. 

At present, for mobile communication, both talk sessions and records of messages consumers rely solely on communication companies' billing system. If something goes wrong with the system, even the communication company itself does not know or readdress it promptly. So how can consumers trust it? If the company detects the system failure promptly, then how come it has never publicized it or verified the lists of subscribers' phone charges during the period the system goes wrong?

It would seem somewhat farfetched to impute these problems to monopoly since competition has been introduced into the mobile communication market. But with the stringent access restrictions imposed by the competent authorities, the two leading mobile operators apparently are not afraid of scaring customers away with their poor attitude of service. In the recent years there has been vehement criticism on the policy toward the collection of mobile communication charges, but it does not stop operators from bringing in staggering profits.

In 2002, operating revenue of China Mobile, which got listed in Hong Kong, hit RMB128.6 billion, up 28 per cent from 2001. Its net profit amounted to RMB32.7 billion, with a year-on-year rise of 17 per cent. China Unicom, the other leading mobile communication operators in China, also has impressive performance. According to its quarterly report for Q3 2003, for the first nine months that year the company earned RMB44.3 billion from its main business, which exceeded its annual revenue from main business for 2002 by nearly RMB5 billion. These incomplete data fully reveal the startling profits generated by mobile communication services.

Then, it is not so hard to understand why the first thing China Telecom did after being split into north and south companies was to apply for a license for mobile services. With oligopolistic competition it is easy to reach tacit agreement on manipulating the market. This has been proved in Western countries long ago, and it could not be any better in the Chinese mobile communication market because of the strict access restrictions.

Despite the dazzling offerings of concessions and packages in the market, as a matter of fact consumers have little room to choose: either China Mobile or China Unicom. The great variety of the concessions actually indicates that the operators still have much room for price cuts. It is only that due to the tacit agreement of oligopolistic competition and so called regulation by the government, the two giants both keep calmness on price cutting campaigns. 

However, it is market ultimately demand that determines price. After PHS (Personal Handy-Phone System, a wireless mobile communication service using fixed telephone network) got into the market, the two giants found it’s a realistic and urgent need to cut price. At this point, measures imposed by the regulatory authorities to restrict price reduction would inevitably generate odd results.

One odd result is that small and midsize cities take precedence to big cities. Perhaps only in the telecom market, people in most small and midsize cities and some remote areas can get better services at lower price earlier than those in big cities like Beijing and Shanghai do. When dealers are confronting competitions, they can only implement their impulse of cutting price secretly and in areas where regulation is weak. This is irregular behavior and increases the disorderliness of market price. 

Disorderliness is just the outward picture of the telecom rate in present market; the root cause lies in the system. Officials with the Ministry of Information Industry finally spoke out at the beginning of this year, it is necessary to revamp the regulation approaches of telecom rate, and let mobile phone charges be determined by market forces. Only when the regulatory authorities do not lay their eyes merely on specific rate, can "small incidents" like the infringement on Ms. Ke's legitimate rights and interests fall into their eyesight, and can norms gradually be established in the telecom market.