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China Telecommunications Report Q1 2011
Business Monitor International, Dec 2010, Pages: 112
The China Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Croatia's telecommunications industry.
BMI’s latest update of the quarterly China Telecommunications Report has extended our forecasts for the fixed-line, internet and mobile sectors, as well as for ARPU to 2015. In addition, we have also provided latest data for regional mobile and fixed-line markets, and on a provincial level, as published by the Ministry of Industry and Information (MIIT).
We have revised our expectations for the China mobile market. There were a total of 804.519mn mobile subscribers in August, revealing 78.559mn net additions since the end of 2009, when there were a total of 725,960mn subscribers. We have reduced our forecast for the end of 2010, and believe that there could be a total of 846.658mn to represent a penetration rate of 63.3%. This would indicate that the remaining four months of 2010 will see net additions of 42.139mn. By the end of our forecast in 2015, we expect there will be close to 1.9bn subscribers and a penetration rate of 136.4%.
While much of this growth is arriving from the prepaid market, the fall in ARPUs is also a prime reason for operators to invest in value-added services – which account for around 25% of total mobile revenues – while there is a significant drive toward providing smartphone handsets. China Telecom announced in October 2010, that it would start to offer the Apple iPhone handset in 2011, competing with China Unicom, which until then had a monopoly in offering the handset. While the iPhone is sure to be popular, a number of similar handsets are on the market, which could prove to be more attractive in terms of pricing. One example is the LePhone, which was introduced at the end of September 2010, with a retail price of CNY2899 (US$433).
These developments are sure to also help boost the number of 3G subscribers in the market. The development of next-generation networks continues to be at the forefront of operator’s plans. At the end of September 2010, China Unicom sold US$1.84bn worth of convertible bonds, according to The Wall Street Journal. It will use the funds raised from the sale to replenish its working capital and invest in constructing broadband and 3G mobile networks. The company's 3G developments have eroded its net profit amid growing competition for mobile subscribers from rival operators.
Meanwhile, other developments in terms of boosting data services relates to the announcement that China Mobile had joined forces with fellow Chinese firm Xinhua to develop a search engine it hopes will compete with market leaders, China-based Baidu and US-based Google, and will be released in 2011. The new search engine will be accessible from mobile phones and computers.
There was no change to China’s position in the overall Business Environment Ratings for Asia Pacific, in ninth place. The country maintained its position ahead of Indonesia and Pakistan in 10th and 11th place, respectively, but continued to remain some way behind overtaking major Asia rival India in eighth place.
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