China's 4G network operators face profit challenge in services expansion
Top three telecoms players on the mainland are expected to boost their capital expenditure and subsidies in their expansion into 4G services
Profits at the mainland's three leading telecommunications network operators are expected to be squeezed in the first couple of years of their expansion into 4G mobile services, analysts say.
"We see little incentive for China's telecommunications companies to focus on profit growth - 4G comes with all the excuses to [avoid doing] that," said Anand Ramachandran, the lead author of the report and Barclays' head of telecommunications, internet and media equity research for Asia, excluding Japan.
China Mobile, the world's largest wireless network operator, introduced last week its high-speed 4G service to much fanfare, following the company's deal to sell Apple's latest iPhones to 4G subscribers.
At the end of last month, the company had 767.21 million users, most of whom are 2G network subscribers.
Analysts expect competition to intensify when Unicom and China Telecom launch their 4G mobile operations later this year.