Wireless users at China Telecom climb to 3.2m
The number of wireless subscribers at China Telecom more than doubled last year as the fixed-line operator lured business away from the mainland's two mobile phone giants.
In a research report issued yesterday, BOC International said China Telecom added 1.8 million users of its citywide, wireless service - known as xiaolingtong - bringing the total to 3.2 million.
Xiaolingtong, which means 'little smart', is a service offered by China's fixed-line operators as they wait to be awarded full mobile licences.
China Telecom released its subscriber figures to analysts on Thursday.
Growth in xiaolingtong users accounted for 21.4 per cent of new customers signed up by the H-share last year.
BOCI said the growth in xiaolingtong users beat its forecast of 1.2 million. But growth in China Telecom's total subscribers covering fixed-lined and wireless users fell short of the broker's forecasts.
BOCI had expected China Telecom to add 8.9 million users last year, with 7.7 million coming from the fixed-line business.
The company added 8.4 million users from its operations in four provinces, with 6.6 million of those new fixed-line subscribers.
China Telecom said it had a total of 56.9 million subscribers.
It also confirmed that 'local subsidiaries have been given a free hand to pursue 'little smart,' as long as they can expect to recover their investment within three years', the BOCI report said.
China Telecommunications Corp - the parent of the H-share company - and China Netcom Corp have been aggressively expanding their xiaolingtong services to top-tier cities. The two carriers have signed nearly US$1.5 billion in contracts with Nasdaq-listed UTStarcom for the purchase of xiaolingtong network equipment.
Having seen the cost of building each xiaolingtong line fall 200 yuan (about HK$187.50) over the past year to 1,000 yuan, BOCI believes China Telecom could recoup its xiaolingtong investment within two to three years.
China Telecom's management indicated to analysts that average revenue per user for xiaolingtong services was similar to its fixed-line operation, which was estimated at between 45 yuan and 50 yuan a month.