China Telecom

China Telecom turns its back on low-end market

PUBLISHED : Thursday, 30 May, 2013, 12:00am
UPDATED : Thursday, 30 May, 2013, 4:33am

China Telecom, the world's biggest fixed-line network operator, is to focus on middle to high-end clients rather than competing in the low-end market.

"The competition for the low-end market is intense and we wouldn't like to participate too much in that," company chairman Wang Xiaochu said at China Telecom's annual meeting.

By the end of April, China Telecom had 170 million mobile subscribers. During the first four months of this year, the company, which is also the nation's third-largest mobile phone carrier, added a net 9.57 million mobile subscribers, down by more than 20 per cent on the 12 million added for the first four months of last year.

In April, the company added 3.07 million 3G subscribers, down 4 per cent from the 3.2 million added in March, bringing the total of 3G customers to just over 81 million.

"The growth in subscribers is slowing down compared with last year," Wang said. "But we've seen stronger average revenue per user per month and income. To focus on developing the high-end market will continue to be our strategy."

The slowdown in subscriber growth is inevitable, according to Yang Changlong, an industry analyst at Beijing's Bayes Consulting. "The market is already saturated on the mainland," he said. "Even kindergarten children and senior citizens above 80 have mobile phones these days."

China Telecom and China Unicom have had a strategy of grabbing higher value customers from China Mobile since the launch of faster 3G networks on the mainland in 2009.

"Before that almost all the high-end clients were with China Mobile, but in 3G, Telecom and Unicom have advantages including faster networks and attractive terminals like iPhones," Yang said.

China Telecom said it received no notice from the government on the country's 4G agenda, which is likely to be approved within this year. The company was experimenting with different 4G technologies to see which is more efficient in terms of investment, Wang said.

Time-division duplex long-term evolution, or TDD-LTE, is championed by China Mobile, but frequency division duplex long-term evolution, or FDD-LTE, is a more mature standard and more popular globally,