We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

   Technology Stocks3G Wireless: Coming Soon or Here Now?

Previous 10 
From: Eric L8/31/2010 11:06:12 AM
   of 666
3G Progress in China ...

The three Chinese operators have completed the bulk of their 3G roll-outs but uptake is still in the early stages ...

Through H! 2010 end China had 25.2 million 3G subscriber connections representing 3.2% of the country's total postpaid and prepaid subscription base of 785.42 million:

China Mobile: Had 10.46 million TD-SCDMA customers by the end of June, representing 1.89% of the total GSM/3GSM subscriber base of 554 million.

China Unicom: Their WCDMA/HSPA 3G base is now 7.56m, less than 5% of its total of its GSM/3GSM 156.96m mobile subscribers (subscriber connections).

China Telecom: Now has 9.63% (7.18m) of its 74.52m subscriber base using 3G CDMA2000 1xEV-DO.

>> Chinese Carriers See Mixed Results from 3G

Unicom's profits hit by build-out, value added services key to all three

Caroline Gabriel
Rethink Wireless
26 August, 2010

The three Chinese operators have completed the bulk of their 3G roll-outs but uptake is still in the early stages, so in some cases the cost of build-out is still weighing more heavily on results than new revenues.

This was particularly evident at China Unicom, the W-CDMA carrier, which suffered a 62% fall in profits in the first half of the year to CNY2.53bn ($372m), largely because of the costs of 3G build, though wireline decline was also a factor. Operating revenue was up 7.6% to CNY82.11bn, but mobile specific revenues outpace this, rising 14.4% to half of the total at CNY41.05bn. Within that figure, 14.4% was from 3G and the rest from GSM.

The firm noted in its statement: "As the company's 3G business was still at the initial stage of operation, the revenue from the 3G business could not cover 3G network operation and maintenance, asset depreciation and marketing costs."

China Unicom's 3G base is now 7.56m, less than 5% of its total of 156.96m mobile subscribers. Predictably, 3G has the highest growth rate, up about 60 times year-on-year, while the total base was up 12%. Compared to the end of 2009, a point at which there was significant 3G coverage, the 3G figure has climbed 175% from 2.74m.

These figures suggest that Unicom's relatively aggressive build-out and the short term hit on profits may be reaping rewards. Mobile ARPU was up almost 3% year-on-year to CNY42.9 a month and 3G users are delivering the hoped-for boost to ARPU, at CNY134 compared to CNY39.8 for 2G. It also has a far larger percentage of its base, at 4.8%, using higher value 3G services, than its bigger rival China Mobile. Mobile has only achieved 1.9%, though of a larger customer base, partly because of problems with sourcing attractive devices for its TD-SCDMA network. Unlike Unicom's W-CDMA, there is no global ecosystem for its homegrown RAN system. Unicom plans to exploit its advantage by launching at least 10 new smartphones during the rest of this year, as well as a more layered set of tiered tariffs.

However, Unicom's 3G percentage is outclassed by the smallest of the three Chinese cellcos, China Telecom, which is using CDMA2000 technology. It now has 9.63% of its base using 3G. Telecom is the most dependent of the three carriers on the stagnant fixed line market, where it is the largest player, so mobile growth is particularly important. It is focusing on narrowing the gap with Mobile and Unicom in higher margin 3G, if not 2G services, and also on leveraging its fixed line base to offer more integrated offerings - half of its mobile customers also take another service.

Despite solid first half results, though, its profit growth was marginal, up 0.7% to CNY9.12bn ($1.34bn), on total operating revenue up 4.5% to CNY107.82bn. Mobile revenue was outpacing this growth dramatically, up 57% year-on-year to CNY25.1bn, but Telecom needs to be able to convert the growth into bigger profits. Its mobile revenues were split between voice (56%), data (34%) and 'other', mainly handset sales.

Mobile services now account for 23% of its revenues, a change of 7.7 percentage points on the same time last year. Its mobile base numbers 74.52m, an increase of 18.43m or one-third during the six-month period, and its mobile market share is almost 10%, from 5% at the end of 2009. 3G has been a more significant factor in this pattern than for its two rivals, so far at least, partly because of an early focus on business users. Its 3G base is now 7.18m, close to the size of Unicom's though over 3m less than Mobile's (though Mobile's total cellular customer numbers are seven times larger than Telecom's).

The CDMA carrier's 3G users were up by 76% during the six months. It said mobile ARPU was stable, though actually, despite 3G, it fell slightly, from CNY59.5 in mid-2009 to CNY58.1. To address this, it is focusing more heavily on value added mobile services - it saw high growth in some of these, notably mailboxes and the eSurfing video offering, and it is introducing location and payments services. The firm said in a statement: "We will also focus on mobile internet traffic and open our service platforms to strengthen the cooperation in applications and handset terminals."

Last week, China Mobile had reported a 4% rise in net profit for its first six months, and announced a new CEO, with Li Yue replacing six-year holder Wang Jianzhou, who remains as chairman. Profit was up 4.2% to CNY57.6bn ($8.4bn) on revenune up 7.9% to CNY229.8bn. Total subscribers reached 554m, after net additions of 31.76m, but the firm was downbeat in its statement. It said it faced "new challenges amid the already high mobile penetration rate and the intensifying competition in China's telecommunications market."

ARPU was down slightly to CNY72, but as at Telecom, value added services were a growth area, especially music downloads and online payments. VAS revenue increased 13.4% to reach almost 30% of total revenue and Mobile boasted 2.7m users of its mobile wallet service just a month after launch, and 6m for its mobile ebook service, also launched in May. Mobile video attracted over 6m customers too but the mobile TV offering only notched up 300,000. Mobile also said it had over 5m machine-to-machine customers, a year-on-year growth of 60%. ###

China Mobile Swaps CEO, Reveals 3G and Mobile Content Stats

GSM Mobile Business Briefing
19 August 2010

China Mobile – the world’s largest mobile operator – today reported a four percent rise in first half net profit, announced a new CEO and provided insight into development of its 3G network and takeup of mobile content services. After almost six years at the helm, Mr Wang Jianzhou has stepped down as CEO with immediate effect and has been replaced by Mr Li Yue (pictured), executive director and VP of the company. Mr Wang Jianzhou will remain as executive director and chairman. The move solidifies Li's ascent in the company and follows moves by the state-run parent of China Mobile in May, which named Li as its new president to replace Wang. The change of heads comes as the operator saw first half 2010 profit rise 4.2 percent year-on-year to CNY57.6 billion (US$8.4 billion) and revenue increase 7.9 percent (to CNY229.8 billion). Total subscribers hit 554 million following net additions of 31.76 million. In a statement, the company said the group “maintained relatively good momentum in its business development” but warned it “faces new challenges amid the already high mobile penetration rate and the intensifying competition in China’s telecommunications market.”

Commenting on its progress of 3G buildout, China Mobile said it has now completed construction of the third phase of its TD-SCDMA network and had deployed 115,000 base stations across 238 cities by the end of June. It is targeting 200,000 base stations and “basic coverage for all county level and above cities” by year end. It had attracted 10.46 million 3G customers by the end of June, which is 1.89 percent of its total subscriber base, thanks to what it called a “significant increase” in the number of TD-SCDMA models available (now 210). Commenting on its eventual move to next-generation TD-LTE technology, the company said it now plans “multiple city field tests after the successful network demonstration at Shanghai World Expo” and expects “most manufacturers” to launch their first TD-LTE chipsets in the first half of 2011. Meanwhile ARPU in the first-half period was CNY72, “exhibiting a moderately declining trend,” but revenue from its value-added services business (including music downloads and online payments services) increased 13.4 percent, contributing 29.5 percent (CNY67.9 billion) to overall operating revenue. It had 2.7 million users of its mobile payment/wallet service at the end of June, just over a month after launch, whilst a mobile reading service (also launched in May) had over six million paying users by end-June. Its music download service had over 3.2 million paying users and over one million songs available. Interestingly, its mobile video service exceeded six million users but its mobile TV service (based on CMMB technology) only had around 300,000. Touting its concept of an ‘Internet of Things,’ China Mobile said it has over five million M2M customers, representing an annual growth rate exceeding 60 percent. “We are planning to gradually establish a low-cost, standardised and open development system for the ‘Internet of Things,’” noted the operator. Finally, it stated that it will "actively and cautiously seek suitable investment opportunities and consider further expansion into a broader telecommunications market." ###

- Eric -

Share RecommendKeepReplyMark as Last Read
Previous 10