China Mobile CEO's rules of thumb

I first met Wang Jianzhou in 1983, when I was teaching at Zhejiang University in Hangzhou -- one of the key science and technology universities in China. He participated in an English speech contest that I had organised and ended up being one of the winners.

At the time, Wang Jianzhou was a young member of the management team at the Posts and Telecommunications Bureau of Hangzhou City. He was taking time off as a graduate student to study management and technology.

Wang Jianzhou is now the chief executive of China Mobile, a mobile telecommunications service provider that is the country's fourth-largest company in revenue. With 250 million customers -- it adds about four million each month -- it has the largest mobile phone subscriber base in the world.

His task is to steer China Mobile along the high-growth trajectory it will inevitably take for the next several years. At the same time, he must bring international practices into the corporate culture, and guide the company through changes as China takes on its obligations as a World Trade Organisation member.

Here are some highlights from a conversation I had with Wang Jianzhou during a recent visit to Beijing.

You mentioned a couple of meetings ago that you looked at Japan as being a "thumb culture", where people would get on the train or wherever, using their thumbs to input. Has China become a thumb culture yet?
Wang: I think we are very successful in that. In the past for China Mobile, we had only 6 percent of our revenue from value-added services, like short messaging. And today the proportion for value-added services -- we call them non-voice services -- is as high as 20 percent. That is a very good proportion for telcos in the world. About half -- that means 10 percent of total revenue -- is from short messages, or SMS.

Do you prefer SMS over voice calls?
Wang: Yeah, for myself I like SMS for many things. If you discuss some topics, you should use voice. But if you're just saying "hello" to people, then SMS is very good. I think it's more convenient than computer, than email.

This year, the everyday average is 800 million SMS per day for China Mobile only.

Another thing maybe you will be interested in: We can use a handset to listen to music and to other things. The revenue income from mobile music is more than the total income of the music industry (in China).

I'll give you a very simple example. In one month we downloaded a popular song. It is very popular. The name is "The Mouse Loves Rice," "Laoshu ai da mi" (laughter). And there were five million downloads per month. And every download costs two yuan (25 cents). That means 10 million yuan (£670,000) just for one song.

I noticed that the Chinese government and industry will be promoting 3G (third-generation networks) next year. And they expect by the Olympics, by the year 2008, there should be 118 million 3G users. How do you see that changing China Mobile's business and changing society in general?
Wang: At China Mobile we are waiting for the building-out of our 3G networks after we get the 3G license. And we think there will be a lot of applications based on 3G. And China Mobile is the mobile communication partner for the Olympic Games -- we promised to provide 3G services during the Olympics.

Do you think that 118 million users is possible in two years?
Wang: I don't know. China Mobile didn't give any target for the subscriber base because for China Mobile it will be a very smooth migration.

First, we have a 2G network with very good coverage. For 3G, because it provides data communications, not every person would like to use that. In order to control the (capital expenditure) we will just build out the 3G network in some places where there is the demand for high-speed wireless data.