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Intrinsic Report predicts bright future for China's Mobile Internet
Posted: 18-Sep-2000 [Source: Intrinsic Technology]

["China will have the largest mobile user base in the world within two years," according to the latest Intrinsic Report.]

Shanghai -- During the WAP Forum in Hong Kong today, Intrinsic Technology released a comprehensive forecast and overview of China's rapidly growing wireless telecom sector. The Intrinsic Wireless Handbook for China goes beyond the estimates provided by other institutions, breaking down total cellular revenues, average revenue per user, and wireless data-related revenue over the next five years.

Intrinsic's conclusions provide a much clearer picture of the growth of China's mobile market and highlight the increasing importance data and wireless internet services will soon play in it. "Most of the current revenues come from voice traffic," said Intrinsic founder and CEO Jun Wu. "Data-related revenue will become increasingly significant in a very short period of time."

The Intrinsic Wireless Handbook for China integrates Intrinsic Technology's own market research, consumer surveys, and discussions with leading vendors and analytical institutions. "We believe these numbers are the most comprehensive in China," said Wu. Some key highlights from Intrinsic's research:

2000 2001 2002 2003 2004 2005 Number of Cellular Subscribers (Millions) 65.2 105.6 155.3 209.8 228.2 254.1 Cellular Revenues (Millions of USD per Year) $22,689 $32,472 $56,728 $73,446 $79,495 $87,969 Average Revenue per User (USD per Month) $30.10 $29.85 $29.75 $29.24 $29.03 $28.85 Wireless Internet Users (Millions) 0.3 3.7 22.4 55.6 65.9 79.3 Wireless Internet Penetration 0.50% 3.5% 14.4% 26.5% 28.9% 31.2% Data-Related Revenue (USD Millions per Year) $2.6 $151.3 $1,181 $2,625 $3,759 $5,844


Intrinsic estimates the total number of mobile users in China will reach 65.2 million by year-end 2000, rising to 105.6 million by year end 2001 and exceeding 250 million by year end 2005. "China will have the largest mobile user base in the world within two years," says Wu. "This represents an enormous opportunity for China to take a global leadership role in developing innovative value-added services, particularly in the wireless internet space."


Wireless internet penetration will grow sharply between 2001 and 2005, with the number of mobile users accessing data and internet services rising from 4 million at the end of 2001 (3.5% of the overall user base) to 80 million by 2005 (more than 30% of the overall mobile user base). "Mobile Internet usage will experience staggering growth in the coming years, and will soon overtake traditional PC-based access," says Wu. "This will be especially true in China, where the wireless infrastructure will be better able to support this growth."


Overall revenue for the Chinese mobile industry will experience a dramatic rise from approximately $23 billion at year-end 2000 to almost $90 billion by 2005. An ever-increasing portion of this revenue will be data and wireless internet driven, particularly m-commerce. "Wireless handsets will naturally evolve into 'virtual wallets,'" says Intrinsic CFO Derek Sulger. "In addition to paying for data services, mobile billing platforms will be uniquely positioned to capture revenue from everyday monetary transactions." The Intrinsic study highlights this prospect in China, where the lack of unified payment mechanisms and a cultural reluctance to embrace credit cards has hampered the development of electronic payment mechanisms. "There is a culture of paying for mobile voice services," said Sulger, "and we foresee a natural evolution from voice to data and m-commerce, all enabled by a new breed of technology providers."


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