China operators slow down 3G expansion projects

China Mobile, China Unicom and China Telecom have all recently slowed down the expansion of their 3G businesses amid mounting complaints of poor 3G network performance from consumers. The moves are likely to result in stockpiled inventory at some handset vendors, according to market sources in Taiwan.

A lack of comprehensive network infrastructure and CPE support as well as the absence of user-friendly environment and data services underlies the consumer complaints, the sources noted.

The three 3G mobile operators have reduced their subsidies for the purchases of 3G handsets, while channeling more resources to improve basic network infrastructure and the quality of communications among CPE products, said the sources.

The three mobile operators may not ignite a new round of promotional campaigns to boost their subscriber bases until the end of this year, the sources said.

Although the three 3G carriers did purchase some of their 3G handsets from international brands and Taiwan-based makers, their major sources of handset supply have been domestic makers in China, who are now expected to bear the brunt of the ongoing retrenchment, the sources indicated.