Cheap deals signal new mobile price war

  China’s top two mobile phone operators were set to launch promotions targeting low-spending users, ending a half-year pause in a price war that has sapped profit margins, two senior telecom executives said.

  China Mobile (Hong Kong) and China Unicom were readying campaigns to grab business from a cheap, limited wireless service offered by fixed-line carriers China Telecom and China Netcom, one of the executives said.

  The promotions would feature combinations of cheap call plans and subsidized phones and would be launched at the end of this month, the executives said.

  As well as taking business from the fixed-line companies, Unicom hopes to wrest back market share lost in the past half year to China Mobile, the world’s largest mobile carrier by subscribers.

  The promotions will end about half a year of relative calm in a fiercely competitive industry once convulsed by rampant price wars that whittled down profit margins.

  "Both campaigns will last about six months," one of the executives said.

  The carriers "see this opportunity as a means to pick up some PHS subscribers," he said, referring to the fixed-line carriers’ wireless service.

  Now both companies are hoping to take advantage of the recently slowing growth of PHS.

  "If they get more handsets going to the low end, they will be able to improve their market share," said analysts.