China Mobile Operators to Boost Spending on 3G Infrastructure
Efforts are in line with projected huge increase in subscribers.
Anticipating a mammoth surge in mobile subscribers this year, China is committed to increasing its capital expenditures in 2010 to beef up the country’s fledgling 3G wireless infrastructure, according to iSuppli Corp.
Capital expenditures on wireless infrastructure by China’s three major mobile operators—all state-run enterprises supervised by the central government—are set to reach $3.42 billion in 2010, up 12.5 percent from $3.04 billion in 2009. Spending will keep ramping up until 2014, when capital expenditures reach $4.32 billion, iSuppli data indicate.
The higher 3G outlays are especially significant because the Chinese mobile carriers are downshifting capital expenditures on older 2G/2.5G wireless infrastructure such as GSM and GPRS. The older networks continue to make up the biggest chunk of overall mobile wireless infrastructure spending, but their share of the total pie will keep getting smaller in 2010 and the years to come.
The higher 3G expenditures this year come on the heels of an already hefty rise in spending during 2009 when 3G networks were completed, and now reflect a mounting sense of urgency among the operators to expand the networks in order to support more users. Offering faster wireless speed and data transmission, 3G networks at present can be found only in the country’s major urban centers.
At the same time, the ranks of 3G users are growing in ever-larger numbers and will exceed 46.2 million this year—up a gargantuan 551 percent from just 7.1 million in 2009. By the end of 2014, the domestic 3G arena is forecasted to reach 110 million, representing approximately 35 percent of the total handset market in China.
Among the operators, China Mobile plans to spend $1 billion to broaden its network to 365 cities, up from 238 cities now. In comparison, the other two carriers—China Unicom and China Telecom—each will construct 70,000 base stations to expand 3G network capacity.
China’s Mobile Carriers Cut a Path Toward Greater Growth
As owner of both the world’s largest mobile telecommunications network and the greatest number of wireless subscribers, China Mobile plans to provide more than $4.4 billion in subsidies to promote the adoption of 3G handsets in 2010. As a result, subscribers to the carrier’s TD-SCDMA network are expected to rise by a substantial 20 million this year. Since the establishment of TD-SCDMA in 2006 as China’s national 3G standard, China Mobile has set up approximately 100,000 base stations throughout the country.
China Mobile in 2010 also is promoting the Ophone, a TD-SCDMA smart phone that enjoys support from many major handset manufacturers, including Nokia Corp. and Research In Motion Ltd. In addition to the Ophone initiatives, China Mobile has launched its own online store for 3G users to download software applications.
For its part, China Telecom is aggressively courting high-end 3G clients in 2010. With the largest Wi-Fi network in the country, China Telecom is moving away from its previous focus on low-income handset subscribers, whose numbers increased by 30 million in 2009 but are not expected to contribute to significant revenue growth in the near term, iSuppli believes.
The third mobile operator, China Unicom, is out to improve profitability. Forming a partnership with Apple Inc., China Unicom succeeded in bringing iPhones to China during the last quarter of 2009 but then went on to sell only 300,000 units—an amount well below the carrier’s expectations.
Anticipating a mammoth surge in mobile subscribers this year, China is committed to increasing its capital expenditures in 2010 to beef up the country’s fledgling 3G wireless infrastructure, according to iSuppli Corp.
Capital expenditures on wireless infrastructure by China’s three major mobile operators—all state-run enterprises supervised by the central government—are set to reach $3.42 billion in 2010, up 12.5 percent from $3.04 billion in 2009. Spending will keep ramping up until 2014, when capital expenditures reach $4.32 billion, iSuppli data indicate.
The higher 3G outlays are especially significant because the Chinese mobile carriers are downshifting capital expenditures on older 2G/2.5G wireless infrastructure such as GSM and GPRS. The older networks continue to make up the biggest chunk of overall mobile wireless infrastructure spending, but their share of the total pie will keep getting smaller in 2010 and the years to come.
The higher 3G expenditures this year come on the heels of an already hefty rise in spending during 2009 when 3G networks were completed, and now reflect a mounting sense of urgency among the operators to expand the networks in order to support more users. Offering faster wireless speed and data transmission, 3G networks at present can be found only in the country’s major urban centers.
At the same time, the ranks of 3G users are growing in ever-larger numbers and will exceed 46.2 million this year—up a gargantuan 551 percent from just 7.1 million in 2009. By the end of 2014, the domestic 3G arena is forecasted to reach 110 million, representing approximately 35 percent of the total handset market in China.
Among the operators, China Mobile plans to spend $1 billion to broaden its network to 365 cities, up from 238 cities now. In comparison, the other two carriers—China Unicom and China Telecom—each will construct 70,000 base stations to expand 3G network capacity.
China’s Mobile Carriers Cut a Path Toward Greater Growth
As owner of both the world’s largest mobile telecommunications network and the greatest number of wireless subscribers, China Mobile plans to provide more than $4.4 billion in subsidies to promote the adoption of 3G handsets in 2010. As a result, subscribers to the carrier’s TD-SCDMA network are expected to rise by a substantial 20 million this year. Since the establishment of TD-SCDMA in 2006 as China’s national 3G standard, China Mobile has set up approximately 100,000 base stations throughout the country.
China Mobile in 2010 also is promoting the Ophone, a TD-SCDMA smart phone that enjoys support from many major handset manufacturers, including Nokia Corp. and Research In Motion Ltd. In addition to the Ophone initiatives, China Mobile has launched its own online store for 3G users to download software applications.
For its part, China Telecom is aggressively courting high-end 3G clients in 2010. With the largest Wi-Fi network in the country, China Telecom is moving away from its previous focus on low-income handset subscribers, whose numbers increased by 30 million in 2009 but are not expected to contribute to significant revenue growth in the near term, iSuppli believes.
The third mobile operator, China Unicom, is out to improve profitability. Forming a partnership with Apple Inc., China Unicom succeeded in bringing iPhones to China during the last quarter of 2009 but then went on to sell only 300,000 units—an amount well below the carrier’s expectations.
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