Living up to its “we’re an internet company” moniker, Xiaomi has officially become a telco in China. Together with the launch of the new Mi 4c smartphone, the China brand also announced its MVNO (mobile virtual network operator) services labelled “Mi Mobile.”
Mi Mobile is essentially a prepaid mobile operator, doing away with contractual carrier packages. The Pay-As-You-Go (PAYG) service offers a triple-cut SIM card, making it easy for users to use on a plethora of devices whether mini-, micro- or nano-SIM sized cards.
No contracts, just pay as you go
The new MVNO rides on China Unicom‘s 2G/3G/4G network and offers a rate of RMB0.10 (under US$0.02/RM0.086) per voice minutes, SMS and 1MB data for its basic PAYG plan. This plan will be available for sale on Mi.com starting 23 September.
For heavier users, there’s a 3GB Data Bundle that you can buy for RMB59 per month (under US$10/RM43). This equates to around RMB0.02/MB for data. It also offers RM0.10 per voice minute, SMS or 1MB data exceeding 3GB. This plan will be available as a public beta starting October.
Tapping into China
China Unicom is a state-owned telco and is the world’s fourth largest mobile service provider by subscriber base. According to latest statistics, China has a total of 1.29 billion mobile users (2015: China MIIT) with 250 million 4G subscribers in July 2015. An average of 330.9MB of data services are consumed per user every month, a 85.1% increase YOY. Based on GSMA’s Global Mobile Economy Report 2015 data, global SIM connections are expected to hit 10 billion by 2020.
MVNOs are of course nothing new in the world of telecommunications. Closer to home, we have our fair share of MVNO services too, from TuneTalk to Tron to RedONE. These companies buy network capacity from large carriers and resell mobile plans under their own brands. Google in the US recently announced that it would launch “Project Fi,” an MVNO service that rides off Sprint and T-Mobile networks. Apple on the other hand, while isn’t getting into the MNVO game, is offering cellular data plans across 90 countries with its multi-operator Apple SIM that launched last year.
The Trojan horse
For Xiaomi, this is a natural move as it grows its portfolio of internet-enabled products – yet another Trojan horse to expand the reach of its brand. It is unlikely to compete head on with the three big carriers in China, which dominate the telecoms industry. For Xiaomi, its value proposition has always been “making tech accessible” and the new product is aligned with that key objective. In China, MVNOs are not popular. However, with Xiaomi’s cult-like popularity and wide presence, it could be a driver for change for that sector.
Will we see this replicated in other countries including Malaysia? Never say never.
