Chinese handset maker Xiaomi has launched its own mobile service in China. The service, called Mi Mobile, offers a SIM that works over China Telecom’s 2G/3G/4G network. The prepaid service charges CNY 0.10 (US$0.016) per minute, text or MB, and customers can also subscribe to a bundle of 3 GB data for CNY 59.00 (US $9.25) per month. Users also receive free roaming across China and free incoming calls. Xiaomi announced the new servic eat the presentation of its latest smartphone for the Chinese market, the Mi 4c,which will be priced at CNY 1299.00 (US $203.64) for 2 GB RAM and 16 GB storage or CNY 1499.00 (US $234.99) with 3 GB RAM and 32 GB storage. The Mi 4c also supports infrared technology to replace common remote controls, such as for a TV or air conditioner, and Xiaomi’s EdgeTap technology to perform common functions with a simple tap of the phone.
Xiaomi has been making worldwide waves with its smartphones, in overseas markets such as India, where expanding demand for data has driven demand for budget-priced devices. Now the aggressive manufacturer is expanding in a different direction by offering mobile service of its own as an MVNO, running on the network of China Telecom. Competing in China’s mobile market seems like a logical next step for Xiaomi. Offering the service via SIM will make it available as widely as possible, but Mi Mobile can also be seen as a way to drive device sales within China, where they have lately been doing less well than abroad. Users who do not have a 4G/LTE handset may be motivated by Xiaomi’s generous prepaid MVNO offer to upgrade to the new Mi 4c.
Looking further ahead, the offer—even though it is on an MVNO basis—can be seen in the wider context of new challenges to the MNOs’ traditional offerings. Another handset manufacturer, Ericsson, recently announced that it will be offering voice calling via its own Wi-Fi-only devices. While we are not privy to Xiaomi’s future plans, offering OTT voice services tied to their devices would be an even more decisive end runaround the MNOs.