Xiaomi has announced that it will start its own MVNO service. (Photo : Reuters )
Leading smartphone maker Xiaomi Inc. announced on Tuesday that it will offer two prepaid wireless plans as part of its debut as a mobile virtual network operator (MVNO) that will compete against China's national carriers.
MVNOs purchase network capacity from large carriers and resell them in the form of mobile plans with their own brand. They have failed in China, wherein the mobile telecommunications market is dominated by three state-owned companies: China Telecom, China Unicom and China Mobile.
However, with the three main carriers often criticized as unprofitable and too large, Xiaomi, as China's most popular handset brand, has a reasonable chance of starting up the MVNO industry, helping telecom regulators who have long been trying to introduce market competition.
Xiaomi's new venture, called Mi Mobile, is set to offer voice and data services, using either the China Unicom or China Telecom networks.
Xiaomi's move into the MVNO business comes less than six months after Google Inc. announced its own MVNO business in the United States called "Fi" that will use the networks of Sprint and T-Mobile.
Rumors have also spread of Apple Inc. getting into the MVNO business, although the company has not disclosed any plans.
The Tuesday launch event in Beijing also had Xiaomi unveiling their latest flagship handset called the Mi 4c. The new smartphone, which is set to cost 1,299 yuan (around $205), will be an Android smartphone with a Qualcomm processor, a 5-inch display and a 13-megapixel camera.
Xiaomi was valued at $45 million after a funding round last December.
