Xiaomi take on market leader China Mobile with launch of mobile services

Written by Zennon Kapron || September 22 2015

If you've ever been to China, you know how atrocious the mobile phone service can be. Previously, you could use any of a number of carriers...as long as it was China Mobile. You could move your number to a different carrier...as long as you had a different number. Users really had no choice as the market was controlled by the government and the 3 main state-owned carriers. Xiaomi is one of eight firms that will be trying to change this.

If you're not familiar with Xiaomi, they are China's home grown Apple replete with showy events and a black shirt wearing founder. Despite the criticism they get for supposedly copying all of their designs from Samsung and Apple, they do make a very good phone. I am actually typing on it now...well, ok, it's sitting next to me, but it is still the best phone I've owned.

In 2014, the government opened up licensing for China's mobile industry beyond the three main mobile telco providers with the launch of a mobile virtual network operator (MVNO) system. Eight companies were originally given MVNO licenses in November 2014 and Xiaomi is one of the first to launch their service.

There are few different Xiaomi MVNO package options with one of the basic ones providing 3GB of 4G data for CNY59 (~US$9) per month and a second pre-paid option that is CNY0.1 (~US$0.015) per voice minute / SMS / or 1 MB of data.

The price is not what's interesting here, although it is very compelling compared to the existing operators. What is interesting is how this will fit into the rest of Xiaomi's products and services. The company that started as a mobile phone manufacturer has increasingly moved into IoT in a big way and arguably has one of the largest IoT product portfolios globally with cameras, switches, bulbs, water & air purifiers.

They have also expanded into content with serveral default apps on the phone providing the latest music, video and TV programs. The MiBox is the company's TV box set that streams more content than you could ever watch to your TV or computer.

With all of this data flying around and the increased convergence we're seeing in mobile / entertainment / internet in China, the move was a no-brainer. The mobile industry in China is ripe for disruption with the main players monopolising the market with what are typically over priced and subpar services. 

Certainly as the service gets going, it will be as successful as its hardware offering. What will be really interesting to see next is how they start to drag that data and customer relationship into other areas of their expanding business.