Chinese and American Mobile Phone Systems
By Larry Romanoff, May 21, 2022
At the risk of appearing to be a shill, I think it is safe to say that China arguably has the best mobile phone service in the world, certainly second to none, while the US and Canada have arguably the worst, surely the most fragmented and dysfunctional, and certainly the most expensive. Let’s look at some details.
I’m uncertain about the US but, so far as I am aware, in Canada and many European countries, mobile phones can be purchased only from a telecom company, one of the more clever but clearly anti-social provisions in Western communications legislation. This gives the phone companies a truly ‘captive market’ in that, if you want a particular phone, you have no choice but to submit to all that company’s policies and to pay their demanded prices. A major difference in the communications landscape is that Chinese phone companies do not have a monopoly on the sale of mobile phones and are in fact minority sellers.
To buy a mobile phone in China, you go to any one of thousands of shops in your city, each selling hundreds of different brands and models of mobile phones, and negotiate the best price you can get for the phone you want. And you CAN negotiate: “There are three shops across the street selling this same phone. Either give me a better price (or a free expensive umbrella, or a nice stuffed animal), or I’ll go there instead.” Some Americans will recognise this as “competition”.
After you buy the phone, you buy a SIM card (about $3.00), which contains your phone number, network connection authorisation, and some free air time. You insert the SIM card, turn on the phone, and begin making calls while still in the shop. That’s the whole process. Except for the SIM card, it’s the same as buying a toaster.
You can choose from various phone companies to provide service, but everything is pretty much the same and, while there are many various “usage plans”, you needn’t subscribe to them and can simply use your phone on a pay-as-you-go basis. Noteworthy is that in China you can change phone companies without changing your phone or your number. If you buy a new phone, you simply insert your old SIM card and everything is as it was. You can purchase a second (or third) SIM card and have different local numbers to use in different cities, if you want to do that.
For sure one of the best features is that the entire country is wired, even in remote locations. Some time back I was on holiday in Inner Mongolia and could happily send photos on WeChat while riding my camel in the desert. Given the extensiveness of wireless coverage, in more than 17 years in China I could count the number of dropped calls on the fingers of one hand. And it isn’t only China itself, but the entire Asian region that is seamlessly connected. I recently called a friend in Shanghai to invite him for lunch, and he said, “I can’t. I’m in Vietnam”.
If anyone from anywhere in the world calls me, the system knows where I am and my phone rings. I never have to think about service provider compatibility, roaming, and all the other restrictions that exist in Canada or the US. If I travel to Beijing, I receive a text message welcoming me and telling me my calls are now local calls. And in a sense, all mobile phone calls in China are ‘local’. The landline system still uses area codes, but the mobile phone system abandoned them decades ago and simply uses an 11-digit phone number, so calling anywhere in the country is the same. The system is so functionally useful that I cannot recall ever meeting anyone in China who had a personal or home land line.
The system also monitors abuses, presenting warning notices upon receiving a call from a number reported to belong to telemarketers or telephone scam operators. As well, the SMS system is used very effectively for some kinds of public notices like a simultaneous warning to 100 million citizens of an approaching typhoon.
Phone calls in China cost maybe $0.01 per minute, and SMS messages are the same for sending; receiving is free. The typical monthly cost for a smart phone in China, including typical internet usage, is maybe $15.00, compared to around $100.00 in the US or Canada, and sometimes as much as $200.00. Many young kids in China stream movies on their phones and can run up higher bills, but the $15.00 cost is probably typical and maybe even high. I should add that in China the ‘basic phone bill’ includes all the ancillaries which are usually sold at extra cost in the West: caller ID, call-holding, and many others.
International calls have a special provision: I first dial a 5-digit number before the phone number I’m calling and that automatically places me on some kind of heavy discount basis. Perhaps other countries have this feature now, but I can speak to a friend halfway around the world for less than $1.00 per hour.
Once on an extended trip to Canada I thought I’d buy a Canadian SIM card for my phone for the sake of convenience. That was a mistake. The phone company charged me $30 for the SIM card and another $30 as a “connection fee”. That last one rankled. In the days of land lines, the phone company had to send a man out to your house to physically connect your phone, so you paid a connection charge. But today there is no such thing as a ‘connection’. When you turn on your phone, the SIM card pings the tower and you’re connected. On my return to China, I discovered I’d lost my China SIM card; not a big deal but I didn’t want to lose my phone number. Happily, for 5 RMB (about $0.75), the nice girl at China Mobile reprogrammed a new SIM card with my old number and life was normal again.
There is one other item I would raise that seems to be primarily an American phenomenon: dirty tricks. One such was Marriott Hotels a few years back using illegal frequency jammers to block guests’ Wi-Fi hotspots and other such devices, shutting them out from the Internet entirely, then charging them between $250.00 and $1,000.00 per device to connect to the hotel’s own wireless network. A Marriott spokesperson with the unlikely name of Gaylord Opryland, claimed it was only “a security precaution” to protect hotel guests from “rogue Wi-Fi hotspots”, and that the hotel used only “FCC-authorized equipment provided by well-known, reputable manufacturers”, i.e., the CIA. The claim apparently didn’t fly with the FCC who fined the hotel chain $600,000 for the scam. (1) (2) I suppose it’s possible this kind of thing happens in China too, but I have never heard of it.
I once had that experience on a cruise ship traveling from Shanghai to Tokyo. As soon as we boarded the ship, even while still in port, all signals disappeared and we had no choice but to pay the cruise line’s exorbitant fees to be able to use our own phones. I refused just on principle, but I discovered there was one small portion of one lower deck where the jamming wasn’t effective, and I could still communicate with Shanghai until we were more than 300 miles out of port. No idea how the signal could carry that far, but it did.
Also, there is something unreal about the mobile phone market in North America. I don’t know if I can define it well enough to make it sensible, but it has overtones (or undertones) of what appears to be some combination of religion and ‘national security’. It suggests there exists something intrinsically mystical or inherently menacing about mobile phones and thus the rapacious practices of the phone companies are disguised as necessities to save the country from unspecified evils. Yet a mobile phone is nothing but a toaster with a SIM card (minus the toaster part). The propaganda of greed.
Of course, capitalists in China are just as greedy as capitalists everywhere, so the phone companies are usually on the lookout for a way to raise the price of something, and occasionally make attempts, furtive or otherwise, to raise rates or sneak in more charges. But if the people begin complaining, the government is not at all bashful about kicking the telecoms in the shins and telling them to roll back the price increases. And they do.
For a long time, it wasn’t possible to buy a Wi-Fi hotspot in the US, Canada, or Europe; these devices had to be rented at a cost of around $50.00 per month, and with about an equivalent monthly cost for usage. It seems they are now available for purchase, at prices ranging from around $100.00 to many hundreds, plus usage charges. In Canada, they seem to cost between about $300.00 and $650.00. Perhaps readers can update this.
In Shanghai, I have two phones and I tether them, using one as the Wi-Fi hotspot for the other and also for my laptop, so I always have my own Wi-Fi wherever I am. It’s possible to buy a dedicated Wi-Fi hotspot for $25 or $30, and pay around another $10 for usage, but my way is more convenient since my other devices connect automatically and I don’t have yet one more device to carry or one more battery to die when I need it. Plus, I have no bandwidth limitations, and never any service disruptions.
This is partially an aside, and you will no doubt hate me for telling you this, but the high-speed internet connection (DSL) for my home in Shanghai costs 500 RMB (about US$75.00) for two years, and that comes with at least 300 TV channels; I haven’t made an accurate count. On the other hand, Canada has the world’s highest internet costs at around $100 per month and showing no signs of decreasing.
The price disparities are not primarily from lower costs or wages, but that the mobile phone systems in Western (capitalist) countries were not designed for the people but for the mobile phone companies, resulting in the exclusive assigned regions, the resulting network and frequency fragmentation, à la carte menus, high costs and poor service. The few companies (with their assigned and protected markets) collaborate to keep prices high and prevent customers from escaping the trap. And US government protection of the telecom monopolies has been vicious: at least until recently, Americans would pay $500,000 and spend ten years in prison for unlocking a phone, the act represented as some kind of abhorrent immoral felony when it was merely a justifiable act of self-defense against a grossly-predatorial system.
China recognised that rapid communications and transportation were vital to increasing economic development, some estimates claiming China’s GDP is 15% higher than would otherwise have been without its current mobile phone system, and another 30% attributed to its nearly universal rapid transportation, especially the high-speed trains.
The World of 5G
China seems to have taken the lead in rolling out the new generation of mobile networks with about 2 million 5G base stations operating now, and covering 60 or 70 major urban centers, essentially all those with a population of one million or more. The country installed more than 650,000 of them in 2021 alone, and the pace is increasing if anything. The number of 5G subscribers is over 500 million and climbing quickly. Also, in 2021 5G smartphones accounted for more than 80% of all handset shipments with nearly 300 new models released. (3) (4) (5) Not only that, but China is already heavily into research for 6G, the next much-faster generation of mobile communications.
According to a recent article in the WSJ, (6) “At this point, football fans have seen so many ads from AT&T and Verizon claiming to have the fastest and most reliable 5G service on the planet that those without a 5G smartphone might think they are really missing something. Don’t be misled. Unless you are traveling internationally, you won’t enjoy faster speeds with a new 5G-enabled smartphone than you’d get on a 4G phone streaming games from New York, Los Angeles or many other U.S. cities.
AT&T’s and Verizon’s new 5G networks are often significantly slower than the 4G networks they replace. America is far behind in almost every dimension of 5G while other nations – including China – race ahead. America’s average 5G mobile internet speed is roughly 75 megabits per second, which is abysmal. In China’s urban centers 5G phones get average speeds of 300 megabits per second. . . fast enough to download a high-definition movie in two minutes.”
Many MSM media articles attempt to explain why the US has fallen so far behind in this area, but this is mostly propaganda with everyone avoiding the elephant in the room. Americans have a right to be disappointed in the performance of their telecom companies whose marketing hype much exceeded their ability to deliver, but this wasn’t really their fault and the blame lies elsewhere – in the world of politics and espionage, unfortunately.
Eric Schmidt, Google’s former CEO, wrote in a recent WSJ article (7) that “The U.S. government’s “dithering” has left the country “well behind” China in the race to build out 5G technology.”, but that’s a dishonest presentation. The US is indeed far behind China, but “dithering” was not the cause. I will try to explain.
The Trouble With Huawei
There are two major issues here, both political. The first involves Huawei, the Chinese IT giant. Huawei was far ahead of the rest of the world in 5G, holds a large portion of the most useful and critical patents in this area, and had the current capacity to ship almost unlimited numbers of base stations and the rest of the 5G infrastructure to the world.
The first and most obvious problem was that (in the eyes of the US Administration) China was “eating America’s lunch” in IT innovation and invention and the White House wanted to derail this by destroying Huawei and clearly made every possible effort in this regard, including bullying and threatening half the known world against using Huawei’s products. Unfortunately, the US telecom companies conducted their marketing campaigns on the expectation of installing Huawei’s equipment, which hopes were dashed by the sudden violent attacks on Huawei and the eventual banning of their equipment. This left the US telecoms with literally nothing to offer and no place to go. Ericsson and others did have equipment available, but most of it was quite inferior and with little production capacity, leaving the US telecoms with no option but to goose their 4G infrastructure and present it as “5G”, which it wasn’t. They did their best, but the results were mediocre.
Huawei was suddenly promoted as unreliable and a grave threat to US national security, and the US telecoms thus became one of the innocent victims of the trade war with China. But what was behind this? Huawei had already been in all the Western countries during 1G, 2G, 3G and 4G, and there had never been a whisper of technical issues nor any concern with data security or espionage, so what suddenly changed with 5G? As it happened, Huawei’s ‘lunch menu’ was the smallest part of the problem. (8)
The Five Eyes
The real issue was espionage, and not by China. It is so widely-known and accepted that there is no practical value in disputing the assertion that Cisco and other American hardware and software firms install back doors to all their equipment for the convenience of CIA and NSA access. There is a video on YouTube where a Microsoft executive is challenged during a speech to explain why Windows had a built-in back door specifically identified in the program code as “NSA Back Door”. The Microsoft executive did not deny the existence of this feature, nor could he have done because he knew that the man asking the question was the person who discovered it. In the event, he refused to respond and changed the subject. And it’s widely-known that as far back as 30 and 40 years ago all Xerox machines and fax machines delivered to foreign embassies and consulates in the US were “espionage-ready”.
All of Cisco’s equipment, and that of most other American manufacturers, were designed to accommodate wide-spread NSA information-gathering on Americans, as evidenced by Edward Snowden, but even this was the smaller part of the problem. The real issue was the US’ creation of the “Five Eyes” espionage network that included Canada, the UK, Australia and New Zealand. Briefly, this was set up to break every law in the book while pretending no laws were being broken. It is generally against the law for a government to spy on its own citizens, but that law doesn’t apply to a foreign government. So, Canada spies on Australian citizens and sends the information to the Australian spooks who can claim they did nothing wrong. Rinse and repeat.
According to Snowden, the Five Eyes was a “supra-national intelligence organisation that does not answer to the known laws of its own countries”, his documents clearly revealing that these five countries were “spying on one another’s citizens and sharing the collected information with each other in order to circumvent restrictive domestic regulations on surveillance of citizens”.
But suddenly Huawei is replacing Cisco and those other American firms with its better and less expensive products and filling the American mobile phone landscape with Huawei equipment. This part might be troublesome but manageable, but the CIA and NSA can hardly approach Huawei and ask the company to build back doors into their equipment so the US can spy on everybody including China. There is no solution to this problem. With the installation of Huawei equipment into these five countries, Five Eyes is dead in the water, and the US government was forced to make a decision between providing world-class 5G communications for the benefit of the country or to protect the functioning espionage network. They chose the latter. And it wasn’t sufficient to ban Huawei only from the US because this company’s equipment would castrate the NSA’s effort in the other four nations. Thus, US bullying to ensure each of its five eyes is Huawei-free.
There was no way to explain this to the public. We could not have an NYT article telling the American people that they cannot have a 5G phone system because that would prevent NSA and CIA spying, so the only option was to trash Huawei’s reputation as a grave security threat, and hype that ridiculous accusation to the point where the public would accept an inferior service. And that’s the entire story, like it or not.
Mr. Romanoff’s writing has been translated into 32 languages and his articles posted on more than 150 foreign-language news and politics websites in more than 30 countries, as well as more than 100 English language platforms. Larry Romanoff is a retired management consultant and businessman. He has held senior executive positions in international consulting firms, and owned an international import-export business. He has been a visiting professor at Shanghai’s Fudan University, presenting case studies in international affairs to senior EMBA classes. Mr. Romanoff lives in Shanghai and is currently writing a series of ten books generally related to China and the West. He is one of the contributing authors to Cynthia McKinney’s new anthology ‘When China Sneezes’. (Chapt. 2 — Dealing with Demons).
His full archive can be seen at
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Marriott Illegally Blocked People’s Internet Access And Charged Them Up To $1,000 Instead
Marriott Whacked for $600,000 for War on Rogue Wi-Fi Hotspots
China’s 5G Soars Over America’s; In some U.S. cities, it’s slower than the old 4G system.
(7) https://www.cnbc.com/2022/02/17/us-well- behind-china-in-5g-race-ex-google-ceo-eric-schmidt-says.html
‘Pathetic’ performance has left U.S. ‘well behind’ China in 5G race, ex-Google CEO Eric Schmidt says
Huawei, Tik-Tok and WeChat
Copyright © Larry Romanoff, Blue Moon of Shanghai, Moon of Shanghai, 2022