Serious concerns were raised in Davos last week about the ability of the Chinese government to spy on the country's 500 million mobile phone users.
The head of China's biggest mobile phone company, which has more than 300 million subscribers, stunned delegates by revealing that the company had unlimited access to the personal data of its customers and handed it over to Chinese security officials when demanded.
The admission, described as "bone-chilling" by US Representative Ed Markey, sent shivers through an audience of telecom experts at the World Economic Forum, who immediately saw the potential for misuse and surveillance.
"We know who you are, but also where you are," said China Mobile Communications Corp (
He was explaining how the company could use the personal data of its customers to sell advertising and services to them based on knowledge of where they were and what they were doing.
When pressed about the privacy and security implications, he said: "We can access the information and see where someone is, but we never give this information away ... Only if the security authorities ask for it."
The movement of mobile phone users can be tracked because they connect to local base stations, giving a trail that can only be accessed in most democratic countries by security officials under strict conditions.
Mobile phones can also be easily tapped.
Markey, who is chairman of the US House of Representatives subcommittee on telecommunications, contrasted the situation with the checks and controls in place in the US, where a court order is required for the government to check phone records.
"I have my eyebrows arched so high they're hitting the ceiling," he said after listening to Wang. "I have many, many more questions about what the relationship is with the government and, moreover, how the company can use that information."
Jonathan Zittrain, a professor of Internet governance and regulation at Oxford University in Britain, stressed how the mobile phone had become a serious threat to privacy in all countries.
"It's amazing to see how such a comprehensive surveillance network has been set up through the market force of consumer demand," he said.
"With CCTV [closed circuit television], the government sets it up and you have nothing to say about it. With this [cellphones], you're paying for your own monitoring device," he said.
He said democratic countries were "just waking up to the need for regulation."
The remarks by Wang came during a discussion about how cellphone operators could boost profit by increasing targeted ads.