Is Baidu stepping on Chinese telecom operators’ shoes?

 

 

 

 

After months of waiting, popular Chinese search engine, Baidu launched its own mobile platform called Yi, which is based on Google’s Android OS, replacing many Google app services with Baidu alternatives.

 

 

 

 

Yi can assist third-party software developers and mobile phone manufacturers in creating applications like games, music, maps and book tools that they can distribute through the platform. It will also provide single sign-in integration with Baidu accounts, and have its very own app store. Baidu is also looking to go a step ahead and integrate its cloud-computing services that include sharing, storage and back-up to mobile handsets.

 

 

 

 

Baidu plans to co-operate with cell phone makers to produce tailored products with the platform. The platform launch is being seen as an open door for other Chinese search engines to follow suit. However, launching a new mobile platform  may be a way of giving the existing trinity of Chinese operators – China Telecom, China Mobile and China Unicom, a run for their money, by steeping right on their home turf.

 

 

 

 

According to the Ministry of Industry and Information Technology (MIIT), China’s fixed broadband internet access added 16 million new users to the total number of 142 million in Q1, with total number of Internet users by August 2011 reaching almost 485 million. Mobile broadband users accounted for 303 million, with 70 million 3G users, out of the total number of 900 million mobile phone users at the end of April 2011.

 

 

 

 

The state-run China Telecom reported a total of 21.54 million 3G mobile subscribers, and 70.09 million wireline broadband subscribers at the end of the first half of 2011, as compared to 12.29 million 3G mobile subscribers and 63.48 million wireline broadband subscribers at the end of the first half of 2010.

 

 

 

 

China Unicom’s 3G mobile subscribers grew 21.8 percent y-o-y to reach 23.95 million in H1, 2011, while its fixed broadband subscribers grew 19.6 percent y-o-y to 52.32 million in H1, 2011. China Mobile, which is set to invest in a $2 billion broadband upgrade, reported a total of 35.03 million 3G customers in H1, 2011.

 

 

 

 

According to a Reuters report in January, the total number of mobile broadband subscribers are set to reach 1 billion in 2011. China and India are expected to lead the global mobile broadband revolution. No surprise then, that China’s largest search engine, Baidu – with a 63 percent market share as of 2010, has decided to offer the 500 million-plus internet users in the country, a chance to use the same search engine on their mobiles – thus severely limiting outside competition, from mobile search engine giant, Google. While the Chinese version of Google is modified according to government requirements, Baidu had earlier refused to toe the government’s line in this regard. Thus, this new platform may also be a sign of new freedom for millions of Chinese internet users.

 

 

 

 

On the cloud front, Baidu’s extending its cloud services of sharing, storing and archiving data on the mobile platform, will provide a big boost to subscribers who would like to work remotely, with or without internet access, and always be able to access their data, while on the move, anywhere, anytime. Besides, offering services on the cloud mobile platform, could save precious crowding in existing mobile data centers, providing a secure and easily accessible alternative to accessing data. While Google released its Gmail Offline cloud-ready product a few days ago, with plans to launch Google Docs Offline and Google Calendar Offline in the coming week, Baidu’s cloud offering, could be another blow to Google’s cloud services in China.

 

 

 

 

Baidu’s bold move to start its mobile platform, will lead other competing Chinese web search engines like Admcity China, AsianInfo China, Beijixing.com.cn, Business-China.com, China Hangzhou Yuhang, and China Internet Information Center, to also follow a similar route. In case this happens, the move will bring about increased competition in Chinese broadband circles, but will also add to the woes of the three main telcos offering these services currently, as they are already lowering mobile voice and data tariffs in a desperate attempt to remain profitable, albeit falling ARPUs. Tying up with search engines on a revenue-sharing model may be a better idea for the telcos, but it remains to be seen what their next move will be.  

 

 

 

 

By Beryl M
[email protected]