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Mobile market moves under full stream
2007-10-22 02:55:13  China Daily      

China's mobile phone market has been under full steam since the technology was first introduced in the nation - seldom, if ever, has growth in subscriber numbers slowed.

That burst in demand is reflected by the nearly 80 manufacturers that are able to survive in the market, a range that would be unbelievable anywhere else in the world.

Yet the full potential has yet to be tapped. Abolition by the government of its manufacturing approval system this month could help push sales of mobile phones by another 20 percent.

The State Council announced on October 12 that it will eliminate the long-held handset approval system, which previously required a license from regulators for manufacturing and selling handsets in the country.

Discarding the approval system could open the floodgates for newcomers that have been working hard to move into the lucrative sector.

The old approval system was quite lengthy. It took Hewlett-Packard two years to acquire the needed license to sell some of its PDA (personal digital assistant) models that have mobile phone functions, for instance.

"Beside normal organic annual growth, there will be an additional 20 million mobile handsets flooding the Chinese market next year, spurred solely by the deregulation of China's mobile phone production approval system," says Shen Zixin, an analyst from Pday Research, a Beijing-based research firm.

Near 100 million handsets were sold in China last year and about 10 percent growth is projected for this year. With the approval system scrapped, growth could reach nearly 30 percent.

Analysts see abolition of the approval process as part of deregulation that will be a positive development for the industry.

The licensing system under planned economy has been a focus of controversy and criticism. In 2004 home appliance manufacturer Aux even brought the Ministry of Information Industry (MII) to court after its failure to secure a license to make mobile phones.

Aux said it had applied for the license five times but was rejected. It claimed regulators did not offer convincing reasons for the rejections.

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