Mobile operators grow at expense of China Telecom

PUBLISHED : Tuesday, 21 February, 2006, 12:00am
UPDATED : Tuesday, 21 February, 2006, 12:00am

User base increases at China Mobile and Unicom as phone lines lose lustre

China's two mobile operators recorded solid growth last month, unlike fixed-line giant China Telecom, which added fewer subscribers as mainlanders continued to replace their phone lines with mobiles.

China Telecom yesterday released its maiden monthly figures on its website, which showed it added 1.46 million lines to 211.55 million last month.

However, these included its limited-access xiaolingtong mobile-phone service based on personal handyphone system (PHS) technology. The company did not give a breakdown of the figures.

Data from the telecommunications watchdog, the Ministry of Information Industry, reported the country's PHS users dropped 1 per cent to 85.33 million in December.

China Telecom, which is widely tipped to be assigned a third-generation mobile licence this year, had 210.09 million lines at the end of last year.

'As mobile subscriber growth remains strong and fixed-line subscriber growth proves to be lacklustre, we expect accelerating mobile substitution in China,' UBS analysts Jinjin Wang and Danny Chu wrote in a research note.

China Mobile reported record growth last month with the addition of 4.06 million subscribers, taking its total to 250.72 million.

Of the new subscribers, 97 per cent or 3.95 million were prepaid users with only 119,000 contract customers who usually spent more each month.

Meanwhile, smaller rival China Unicom added 1.3 million new customers last month, or about 4 per cent more than in December, for a total of 129.1 million.

Of these, its CDMA customers grew 316,000 to 33.04 million and its GSM customers increased 991,000 to 96.06 million.

But ABN Amro said in a report that compared with last year, China Unicom's business had slowed down. The operator added 554,000 CDMA and 882,000 GSM customers a year ago.

BNP Prime Peregrine Securities analyst Marvin Lo said growth could also slow as the mainland government implemented a new registration policy for mobile users this year, requiring subscribers to register using their real names as part of an effort to crack down on spam.