China’s mobile and internet boom

In 2009, mobile phone users increased from 106 million to 747 million, China’s Ministry of Industry and Information Technology recorded. Broadband users increased from 20 million to 103 million.

And while fixed-line business declined, revenue from the mobile network increased 13 percent.

In September 2009, a report from CNNIC China Daily said the number of mobile internet users had increased to 192 million, up 62.7 percent. China’s mobile advertising industry was worth US$110 million in 2008 and was predicted to nearly double by this year.

New Zealand Trade and Enterprise’s trade commissioner and consul general in Guangzhou, Pat English, says China has good telecommunications infrastructure in place after 10 years of investment.

“China is well placed to take some of the more advanced technology New Zealand has to offer. But while China might be ready for you, you may not be ready for China.”

Preparation needed for China

English says companies entering the market need to be extremely well informed, prepared and resourced. They also need to visit regularly.

“Ideally, they should be working towards having their own representation and employing carefully-selected Chinese-speaking staff. Well connected agents and distributors are critical, but no-one will look after your interests the way you want to be looked after. If a partner is engaged, then good independent advice should be sought.”

English says the ICT sector and IP issues are sensitive in China and can quickly cause major problems.

“Your IT strategy needs to be an integral component of your business structure and strategy – not left for your lawyer to sort out once a problem is encountered. Everything including operations manuals are part of your IP, and should be managed and protected.”

He says New Zealand companies should initially focus on the main commercial regions in areas of China that have a recent track-record of internationalisation – the north around the Bohai Gulf, the east around the Yangtze River Delta and the south around the Pearl River Delta.

“Some people say, ‘Go west’, but for smaller companies the risks could be much higher.

“To the question, ‘Should I be in China?’, the answer is either, yes, no or wait. In order to know, you need to be very well informed,” says English.

“China is a modernising country rather than a westernising country.”

Wi-Fi

One New Zealand company well-placed to take advantage of the boom is Tomizone, a Wi-Fi service provider.

Tomizone opened an office in Beijing in October, after launching its Wi-Fi services at over 2,000 hotspots in China in March 2009.

It now provides Wi-Fi in over 10,000 hotspots, including major airports and popular hotels.

Tomizone’s CEO Steve Simms says the company has plans to open sales offices in Shanghai and in south China.