China Could Lose 60 Million Phone Users in 6 Months

China's Ministry of Information Industry (MII) has announced plans to require all PrePay phone users to register their handsets, or face having them disconnected. China currently has approximately 200 million PrePay users out of a total of some 380 million, and media reports suggested that as many as 60 million users will fail to comply with the proposed legislation and have their handsets disconnected. This would naturally have a significant impact on the reported numbers and revenues of the two official mobile operators, China Unicom and China Mobile.

Implementation of the new law is expected to start by the end of this year subject to final confirmations, with the registration deadline expected to be June 2006.

"It's unfair if we require only new mobile phone users to register and ignore existing customers," Chen Yuping, a senior official at the ministry's China Academy of Telecommunication Research, said., adding "More important, the registration mechanism loses its effectiveness in that case."

Shanghai already requires that its residents provide proof of identity when purchasing SIM cards.

The Beijing Daily newspaper reported that the mobile network operators may start to make it harder for migrant workers to buy PrePay SIM cards after the registration system is adopted. Some provinces have already asked migrant workers to pay deposits or have a local permanent resident act as their sponsor when they apply for mobile phone services."

Posted to the site on 12th December 2005