China Mobile – How the new 3G policy changed China’s Telecommunications market | Part 1
According to statistics from January 2010, there are 73 million people using mobile phone services in China. Secondly, research done by Google shows that 60% present of new cell phone users will come from Asia and it is therefore becoming more and more important to understand China’s Mobile Telecoms market. This article will be the first one of a series to try to help you got a better idea about how the new 3G policy changed the market share of China Mobile, China Unicom and China Telecom; what kind of cell phones are the most popular ones; what the Chinese use their cell phones for; what differs in cell phone use between cities and the country as a whole; what aspects are the most complained about, as well as the close relationship between the Telecom companies and China’s national security department.
How the new 3G policy changed China’s Telecommunications market
Since January 2009, the 3G license was first released to the three China state-run Mobile companies: China Mobile, China Unicom and China Telecom. China Mobile gained 3,900,000 3G subscribers which is just a little bit more compare to China Unicom’s 3,595,000 and China Telecom’s 3,005,000. You may think those number are enormous but the truth is that there are more than 90% of 3G network users using the 3G service on a 2G device or even on a PC and have no idea about what they could do with this brand new 3G network(in “How the Chinese use their cells”).
How did this happen? To help you understand this typical Chinese phenomenon, here’s a small lecture about the 3G network and a brief history of the three tycoons. Before 2009, there were 7 state-run companies competing in China’s Mobile Telecoms market. They dominated different sectors, with China Telecom dominating the southern parts of China, China Unicom dominating the northern parts of China and China Mobile dominating the mobile phone handset market and no competition between them. In order to accelerate competition and stop wasting money on rebuilding the 3G networks, the Ministry of Industry and Information Technology (MIIT) reorganized these 7 conglomerates into the 3 nationwide tycoons: China Mobile, China Unicom and China Telecom.
China Mobile seems to have the worst standard pursued in China by the Chinese Academy of Telecommunications Technology (CATT), Datang and Siemens AG as an alternative to W-CDMA and an attempt to not depend on western technology, but has retained its GSM customer base. China Unicom retained its GSM customer base but relinquished its CDMA2000 customer base, and launched 3G on the globally leading WCDMA (UMTS) standard. The CDMA2000 customers of China Unicom went to China Telecom, which then launched 3G on the CDMA2000 1x EV-DO standard. This meant that China would have all three main cellular 3G technology standards in commercial use. Finally in January 2009, MIIT was awarded licenses for all three standards，TD-SCDMA to China Mobile, WCDMA to China Unicom and CDMA2000 to China Telecom.
These three standards both have highlights and disadvantages, which theatrically made those three new tycoons have the same basis from which to launch their 3G network services.
China Mobile with its TD-SCDMA has the biggest GSM customer base of 52.7 million out of 73.6 million as can be seen in the statistics from January 2010. But the TD-SCDMA standard doesn’t have many dives to run it, as China is the only country using it so there won’t be many factories interested in making suitable dives for a much smaller market compared to the worldwide standards W-CDMA and CDMA2000. China Unicom got the super hot worldwide standard of W-CDMA to help its customer base increase and a not so great deal with iPhone which really hasn’t sold a lot(due to the missing WiFi module). Still its endless negotiations with Apple and rumors may be a plus to its future developments, but it lost the entire CDMA customer base to China Telecom with only some GSM customers left making up far less in numbers than the other two companies. China Telecom was the weakest competitor among them, but has got the evolutionary standard CDMA2000 which has a huge advantage compared to the revolutionary standards TD-SCDMA and W-CDMA that aren’t backwards compatible to pre-existing 2G networks in that it only needs software updates whereas the revolutionary standards require huge investments to build all-new networks and frequency allocations as well as to maintain the old 2G network systems not to mention the GSM customer base transfer from China Unicom. Those facts together make China Telecom a tough opponent to deal with.
From the above you may get a brief idea about the current mobile market situation in China. Stay tuned as next week will bring you part two.
Related Posts:
March 11, 2010 at 4:15 am
