China’s 3G Network Deployment Update
CDMA and WCDMA on their way while TS-SCDMA slower to materialize.
China’s three state-run mobile carriers in August completed the first phase of their 3G network deployments. China Telecom’s CDMA2000 network now covers 342 cities and is expected to expand to 500 cities by the end of 2009. China Unicom has conducted two phases of WCDMA network deployment, covering 284 cities.
Due to the slow commercialization of TD-SCDMA technology, China Mobile’s TD-SCDMA network has coverage in only 38 cities, and will expand to a total of 238 cities by the end of this year.
During the first half of 2009, the CDMA and WCDMA market had developed rapidly, according to iSuppli Corp. Meanwhile, domestic manufacturers gained more share in the Chinese 3G mobile infrastructure market.
Based on this analysis, iSuppli ranked the vendors of wireless equipment in the 3G market before the second quarter of 2009. ZTE gained the largest share in the domestic 3G market, with 610,000 transceivers deployed in all three 3G wireless technologies nationwide. Huawei ranked second nationwide, with 520,000 transceivers. ZTE took the No.-1position in both TD-SCDMA and CDMA2000. iSuppli projects that ZTE will continue to take leadership in TD-SCDMA because of its leading technology and on-time delivery.
iSuppli also believes Huawei will benefit from China Unicom’s largescale WCDMA network deployment, and will take the No.-1 position in this market. In the CDMA market, iSuppli believes ZTE and Huawei will compete intensively in future, because ZTE only led Huawei by 1.2 percentage points.
CDMA Market
Since China Telecom received its CDMA license from the Chinese government, it has completed two CDMA network tenders involving 540,000 transceivers before August. So far, China Telecom has constructed a massive 3G network, covering 342 cities and more than 2,000 counties, laying a solid foundation for seizing market opportunities. iSuppli expects the network expansion will continue in the second half of 2009 and we forecast China Telecom will purchase about 150,000 transceivers in this tender.
ZTE and Huawei are the greatest beneficiaries of CDMA network deployment. With Nortel having declared bankruptcy and Motorola struggling, ZTE and Huawei look like the clear winners in the CDMA market.
According to our analysis, ZTE will seize the largest share of the CDMA market in 2009 at 40.4 percent, followed by Huawei and Alcatel-Lucent, with 39.2 percent and 17.4 percent market shares, respectively. iSuppli believes that ZTE and Huawei will continue to gain more market share in China’s CDMA market, but the Average Selling Price (ASP) per transceiver will continue to decrease. iSuppli forecasts the ASP will decline to $2,800 per unit in the second half of 2009. But as outdoor deployment ends, we believe ASPs will stabilize in 2010.
TD-SCDMA Market
China Mobile deployed as many as 309,000 transceivers before March. In August, the company closed a third round tender involving 340,000 transceivers and covering 200 cities. After the third TD-SCDMA tender, ZTE gained the largest share of the China Mobile TD-SCDMA market with its high-performance, low-priced products.
ZTE now has a 34.3 percent market share of the third contract, followed by Huawei and Datang at 22.6 percent and 14.6 percen,t respectively. Combining the previous tenders, ZTE has a 34.9 percent market share with 226,000 transceivers, followed by TD Tech—a joint venture of Huawei and Nokia-Siemens—and Datang.
During the third tender, Nokia Siemens Networks and Ericsson achieved substantial gains of 7.4 percent and 5 percent of the market, respectively. iSuppli believes international vendors’ market share will be stable in the TDSCDMA market. The ASP for transceivers is decreasing significantly in 2009, to less than $2,000, down from $3,500 per unit in 2008. iSuppli believes the ASP has hit bottom and will stabilize in the future.
WCDMA Market
China Unicom before August conducted two phases of WCDMA network deployment covering 284 cities. During the WCDMA tender, domestic equipment vendors gained again. Huawei took the largest market share at 31 percent, followed by Ericsson and ZTE with 26 percent and 21 percent of the market, respectively. The result of the tender is consistent with iSuppli’s forecast that domestic vendors controlled 50 percent of the market share in the WCDMA in the first tender.
China’s three state-run mobile carriers in August completed the first phase of their 3G network deployments. China Telecom’s CDMA2000 network now covers 342 cities and is expected to expand to 500 cities by the end of 2009. China Unicom has conducted two phases of WCDMA network deployment, covering 284 cities.
Due to the slow commercialization of TD-SCDMA technology, China Mobile’s TD-SCDMA network has coverage in only 38 cities, and will expand to a total of 238 cities by the end of this year.
During the first half of 2009, the CDMA and WCDMA market had developed rapidly, according to iSuppli Corp. Meanwhile, domestic manufacturers gained more share in the Chinese 3G mobile infrastructure market.
Based on this analysis, iSuppli ranked the vendors of wireless equipment in the 3G market before the second quarter of 2009. ZTE gained the largest share in the domestic 3G market, with 610,000 transceivers deployed in all three 3G wireless technologies nationwide. Huawei ranked second nationwide, with 520,000 transceivers. ZTE took the No.-1position in both TD-SCDMA and CDMA2000. iSuppli projects that ZTE will continue to take leadership in TD-SCDMA because of its leading technology and on-time delivery.
iSuppli also believes Huawei will benefit from China Unicom’s largescale WCDMA network deployment, and will take the No.-1 position in this market. In the CDMA market, iSuppli believes ZTE and Huawei will compete intensively in future, because ZTE only led Huawei by 1.2 percentage points.
CDMA Market
Since China Telecom received its CDMA license from the Chinese government, it has completed two CDMA network tenders involving 540,000 transceivers before August. So far, China Telecom has constructed a massive 3G network, covering 342 cities and more than 2,000 counties, laying a solid foundation for seizing market opportunities. iSuppli expects the network expansion will continue in the second half of 2009 and we forecast China Telecom will purchase about 150,000 transceivers in this tender.
ZTE and Huawei are the greatest beneficiaries of CDMA network deployment. With Nortel having declared bankruptcy and Motorola struggling, ZTE and Huawei look like the clear winners in the CDMA market.
According to our analysis, ZTE will seize the largest share of the CDMA market in 2009 at 40.4 percent, followed by Huawei and Alcatel-Lucent, with 39.2 percent and 17.4 percent market shares, respectively. iSuppli believes that ZTE and Huawei will continue to gain more market share in China’s CDMA market, but the Average Selling Price (ASP) per transceiver will continue to decrease. iSuppli forecasts the ASP will decline to $2,800 per unit in the second half of 2009. But as outdoor deployment ends, we believe ASPs will stabilize in 2010.
TD-SCDMA Market
China Mobile deployed as many as 309,000 transceivers before March. In August, the company closed a third round tender involving 340,000 transceivers and covering 200 cities. After the third TD-SCDMA tender, ZTE gained the largest share of the China Mobile TD-SCDMA market with its high-performance, low-priced products.
ZTE now has a 34.3 percent market share of the third contract, followed by Huawei and Datang at 22.6 percent and 14.6 percen,t respectively. Combining the previous tenders, ZTE has a 34.9 percent market share with 226,000 transceivers, followed by TD Tech—a joint venture of Huawei and Nokia-Siemens—and Datang.
During the third tender, Nokia Siemens Networks and Ericsson achieved substantial gains of 7.4 percent and 5 percent of the market, respectively. iSuppli believes international vendors’ market share will be stable in the TDSCDMA market. The ASP for transceivers is decreasing significantly in 2009, to less than $2,000, down from $3,500 per unit in 2008. iSuppli believes the ASP has hit bottom and will stabilize in the future.
WCDMA Market
China Unicom before August conducted two phases of WCDMA network deployment covering 284 cities. During the WCDMA tender, domestic equipment vendors gained again. Huawei took the largest market share at 31 percent, followed by Ericsson and ZTE with 26 percent and 21 percent of the market, respectively. The result of the tender is consistent with iSuppli’s forecast that domestic vendors controlled 50 percent of the market share in the WCDMA in the first tender.
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