China Mobile

China Mobile set for 'aggressive' 4G launch with low tariff rates

An expected aggressive opening move positions the carrier to snare high-paying data users on the mainland under potential deal with Apple

PUBLISHED : Friday, 06 December, 2013, 5:09am
UPDATED : Friday, 06 December, 2013, 5:09am

China Mobile, the world's largest wireless network operator, is poised to introduce the first commercial 4G services on the mainland later this month and stands to capture more high-paying data users under a potential deal with technology giant Apple.

The company expects to provide lower tariff rates for 4G service compared with its 3G offering, but has forecast higher monthly average revenue per user given the larger volume of subscribers it hopes to sign up, according to a report released by Barclays yesterday from its Asia TMT Conference in Hong Kong this week.

The Ministry of Industry and Information Technology (MIIT) issued licences on Wednesday to the mainland's "big three" telecommunications network operators, also including China Unicom and China Telecom, to run 4G services built on a mainland-developed standard called time division long-term evolution (TD-LTE).

Unicom and China Telecom will also be allowed to run "hybrid" networks that include infrastructure based on the mature 4G standard called frequency-division duplex long-term evolution (FDD-LTE) standard, with those licences to be awarded later when the MIIT deems it appropriate. The Barclays report said China Mobile would "be the first off the blocks into a reasonably aggressive 4G launch", which could include support for Apple's new iPhone 5s and 5c models. Speculation has been rife that China Mobile will launch its new 4G brand "AND" next Wednesday.

Bryan Wang, principal analyst and country manager in China for Forrester Research, said: "Support from a large and strong partner like China Mobile, with more than 65,000 sales offices across the country, will significantly help with iPhone sales on the mainland."

Wang estimated that Apple could sell about 17 million new iPhones to China Mobile subscribers in the first 12 months of such a deal being finalised. "China Mobile might be the only 4G operator in China, at least in the next six months," he said, adding that the operator's churn rate for high-end users could be reduced.

As of October 31, China Mobile had 759.27 million subscribers, including 176.02 million 3G users. However, its 3G network is based on a standard that the iPhone does not support, which is why Apple's mainland 3G partners are Unicom and China Telecom.

China Mobile, however, estimates that more than 45 million iPhones are used on its 2G network by subscribers who bought the devices in the grey market or overseas.

China Mobile and Apple denied news reports yesterday that a distribution deal had been signed after years of negotiations. "We have nothing new to report," Apple spokeswoman Carolyn Wu said.