LIVE FROM GSMA MOBILE 360 SERIES – AFRICA: Wang Jianzhou, former head of China Mobile, shared his experience of extending mobile coverage to rural areas, noting that “during my visits I found the situation in rural areas was very similar between China and Africa”.
The executive, now chairman of the China Association for Public Companies, said that China had a largely underserved rural population – in 1998, there were 2.5 million phones for 810 million people. And the analyst view was bleak – such an effort would be hampered by lack of demand and large spend on network rollout, creating potential damage for shareholders.
“We had different viewpoints. I believe that everyone in this world should have a mobile phone, mobile phones should be ubiquitous in the cities and in even the most remote rural areas. We also thought the network could be profitable in most rural areas, if we controlled the expenditure. And where it is impossible to make money, we still think it is necessary to have mobile coverage, because that was our social responsibility,” Wang said.
Noting the tough conditions of the rollout – such as the lack of transport infrastructure, lack of power and security concerns – he said that the company eventually managed to achieve 98 per cent population coverage.
“After the network covered rural areas, the rural business became the major driver of growth for China Mobile. It didn’t damage the shareholder value – it became the main driver. That’s the answer to analysts,” he said.
Speaking in a session covering rural rollouts of broadband networks, Wang said that 40 per cent of China Mobile’s 4G base stations are in rural areas. “If we use the most advanced technology, it will not cost more – it can save costs,” he noted.
And Wang also commented on why China Mobile had never made acquisitions in Africa.
“When I was the chairman and CEO I visited Africa many times – we tried to find opportunities for investments. But we didn’t invest here because I think the telecoms assets were too expensive – especially when the seller knows you are from China Mobile.”