People stand in front of a 4G mobile service advertisement on March 3 in Zhengzhou, Central China's Henan Province. Photo: CFP

Many people have difficulty understanding wireless carriers' service packages and charges, and do not necessarily check their monthly bills. But users might be more likely to check their bills now, following recent media reports exposing irregularities at the country's leading carriers. 

China Central Television (CCTV) reported on December 5 that an outlet of China Mobile, the country's largest carrier by subscribers, in Mudanjiang, Northeast China's Heilongjiang Province, has reportedly been opening fee-paying services for users without their permission and without even notifying them, in order to fulfill its monthly work quota for promotion of these services.

On December 9, People's Daily published a report saying that some of the three carriers' service clauses were unreasonable. For instance, users of third-generation (3G) China Unicom services can only transfer to 4G services, but not the other way around, the report claimed.

The report also said it is not fair for the carriers to delete people's unused data credit every month, and that they should allow it to be carried over to the following month.

On Friday, the Xinhua News Agency said that at a China Unicom branch in Harbin, Heilongjiang, six phone numbers had been registered to a Xinhua reporter's ID without the reporter's knowledge.

The reports sparked public discussion of the issue. "I need to check my phone bill on a regular basis in the future, in case my money is also 'stolen' by the carriers," Han Bing, a 29-year-old engineer in Beijing, told the Global Times on Sunday.

Explanations

China Mobile, China Unicom and China Telecom are the three major wireless carriers in China, with near total dominance of the sector. The CCTV program said that such irregularities are usually more common in China's third- or fourth-tier cities.

"Wireless carriers usually have two service outlets: those that are directly controlled by the carriers and those that are run in cooperation with a third party. It is harder to manage those that are operated with a third party," Xiang Ligang, CEO of telecom information portal cctime.com, told the Global Times Thursday.

China Mobile admitted to the management loopholes at its Mudanjiang branch and it has launched an investigation into the matter, according to a post on the company's Sina Weibo account on December 9.

In response to the People's Daily report that users are not free to switch from 4G services to potentially cheaper 3G services, a spokesman for China Unicom said this was not accurate and that users are free to switch services. He also noted that users could go to the company's website or download an app to track their phone bills each month.

The company is now also investigating the problems mentioned by the Xinhua report, the news agency said on Sunday.

In a statement e-mailed to the Global Times on Thursday, China Telecom, the smallest of the three giants, also said that China Telecom users are free to switch services.

"It would be unfair to say that the three wireless giants have not made any improvements in their services in the past, but the progress has not lived up to consumers' expectations," Wang Danqing, a partner at Beijing-based ACME consultancy, told the Global Times on Sunday.

Competition growing

Many commentators have attributed the irregularities and unreasonable clauses to the three companies' absolute dominance of the sector, as the lack of competition means they are not motivated to improve their services. But this is about to change, as they are facing rivalry from mobile virtual network operators (MVNOs) and Internet firms.

In December 2013, the Ministry of Industry and Information Technology announced the first batch of licenses for MVNOs, and firms that got the licenses include e-commerce giants JD.com Inc and handset retailer FunTalk.

MVNOs do not own telecom infrastructure. They provide services through network access they lease at wholesale rates from carriers like China Mobile. Participation by MVNOs, which are keen to offer more personalized services to users, may make the three wireless carriers more customer-oriented, experts predicted.

Users have long been complaining about the carriers' policy of clearing their data credit each month. In August 2013, a consumer in Changsha, capital of Central China's Hunan Province, launched a lawsuit against the local branch of China Mobile, claiming that it was unfair to clear the unused data credit each month, though the consumer lost the case.

MVNOs have spotted the demand and launched new services. In April, jd.com launched a plan under which users of its telecom services could carry over their unused data credit to next month.

"The competition could make the carriers improve their services," Fu Liang, an independent industry watcher, told the Global Times on Thursday. But Fu also noted that at present, MVNOs are not strong enough to challenge the three carriers' dominance.

In November, China Unicom also launched similar services to allow users to accumulate data credit.

Competition is also coming from online instant messaging services, which have greatly undermined the text messaging business. The use of China Mobile's text messaging dropped 20.2 percent year-on-year in the first three quarters of 2014, according to the company's financial report released in October.

The calling business is also facing a challenge from online alternatives. On November 11, Tencent Inc, which runs online messaging service WeChat, rolled out an app allowing users to make free phone calls to each other using an Internet connection.

However, these new participants are unlikely to pose any real threat to wireless carriers in the short term, experts noted. All the MVNOs in China currently have only around 1 million users in total, according to media reports, a tiny amount compared with the user base of the three giants. China Mobile, for example, now has over 800 million users.

Plus, although revenues from texting and calling are declining, the wireless carriers' revenue from data traffic will increase in the future, Xiang from cctime.com said.

Reform

The three wireless carriers are under pressure from the central government to conduct internal reforms. Media reports have said that the carriers are drafting reform plans that will allow more participation in the sector by private companies, a move expected to make the sector more market-oriented, experts noted.

Also, technology advancement toward the 4G era will offer a better user experience and cheaper fares, Fu said.

"The competition among the three will also become more fierce, pushing them to offer better services," Xiang noted.