According to sources from related mobile phone vendors, China Mobile has pointed out that it would gradually cut down subsidies for 3G mobile phones in the second half of 2014, meanwhile, the operator will provide all the subsidies for 4G mobile phones, which would have a profound influence on the development and production of device vendors.
In the earlier shareholders meeting 2014 of China Mobile, some shareholders considered the capital expenditure was too high. While the Chairman Xi Guohua explained that it’s necessary to increase capital spending, because the industry was in transition.
Earlier this year in March, China Mobile said, as this is the first year for 4G in 2014, it would increase subsidies for 4G smartphones, according to the plan, the subsidies would reach CNY34 billion, with a rise of 30% compared with last year. In 2013 the subsidies for mobile phones in China Mobile reached CNY26.3 billion, an increase of 11% over 2012.
But now the situation has changed greatly, according to some informed sources, China Mobile will reduce capital expenditure in 2H2014, especially subsidies for mobile devices. It is worth noting that the subsidies refer to those for the device vendors, not the customers.
What is more, this is mainly about the subsidies for 3G mobile phones, which would be cancelled gradually, China Mobile may want the device vendors feel that there is no profit in 3G mobile phones any more.