After some 10 years of discussion and waiting, China’s Ministry of Industry and Information Technology (MIIT) is about to open up the country’s mobile market to mobile virtual network operators, and Telling, a Chinese mobile handset developer, has announced that it intends to take part in MVNO license trials. Telling has stated in filings that it believes MVNO services could bolster its handset business, which has been suffering losses due to falling prices.
If the MIIT finally does open the field, we predict a mad dash of MVNO wannabes, a potential “Wild West” situation in which many entities (domestic only) seek to enter the MVNO space. But we’re skeptical that a handset distributor such as Telling could bring anything to the table that would be of consequence from a subscriber’s point of view. Even if Telling gets the green light – which is by no means certain – we think the odds are stacked against it. A better candidate would be a Chinese web giant such as Baidu or Alibaba, given that they have name recognition, a large base of users, and the relatively natural fit of their information-oriented business with mobile services. In our view, it will take synergy plus brand-name power to make it in China’s (possibly) emerging MVNO sector.