Sweet Music for China Mobile

Yuanzhe (Michael) Cai at Parks Associates posts at his personal blog, The China Blog, about an announcement by China Mobile at 3GSM that the "company is already generating 20% of its total revenue from data services." Some interesting data points include:

• On average, the company'’s subscribers send 0.7 billion short messages a day, which translate into close to 9 million dollars. If part of the messages are multimedia messages, the revenue figure will be even higher
• In China, total revenue generated by mobile music download has surpassed the total sales of the traditional music industry. Although China's traditional music industry is beleaguered by piracy issues and is still much smaller than the US market, people are still buying records. On average, an authentic CD would cost $1-2. In contrast, a single mobile track will cost about $0.25.
• one song was downloaded 15 million times in less than half a year, beating a typical best-selling CD by 15 times

Cai concludes that:

Mobile data services are very popular among users, helping the carriers generate better ARPU. Chinese TV stations are covered by advertisements about mobile music download, SMS, and MMS from the major carriers. In addition, the growth of subscribers maintains good momentum. China Mobile now has more than 250 million subscribers, the largest in the world. In 2005, the company added 42 million subscribers and it's been adding about 4 million subscribers a month for the last three months of 2005. China's mobile penetration rate stands at around 30%. Even considering the gap between urban and rural areas, there is still strong growth potential.

Those are huge numbers. To put it into an American perspective, China Mobile was just a few million short of adding the equivalent of the entire Sprint Nextel subscriber base in 2005 alone! And with market penetration at only 30 percent, China is one giant mobile opportunity...