New | China Mobile 4G lead shores up its pool of high-value subscribers
China Mobile, the world's largest wireless network operator, is winning back high-value customers on the mainland as its 4G infrastructure expansion continues nationwide.
The company said it added a record 19 million 4G subscribers last month to increase its 4G base to 90 million, a year into its massive roll-out of a network built on the indigenously developed standard called time-division long-term evolution (TD-LTE).
"We believe its fourth-quarter results will show that China Mobile gained revenue share for the first time since the mainland's [most recent] telecommunications industry reorganisation," Bernstein Research senior analyst Chris Lane said.
That restructuring in 2008 paved the way for the central government to kick-start infrastructure upgrades in the industry after it issued 3G licences to three network operators: China Mobile, China Unicom and China Telecom.
"Previously, many of the mainland's high-value subscribers migrated to Unicom, and to a lesser extent China Telecom, to access better smartphones and faster data usage," Lane said. "China Mobile now has the advantage because of its 4G network."
Unicom and China Telecom were Apple's first partner-carriers on the mainland for the iPhone because their 3G networks supported the popular smartphone.
China Mobile's slower and less stable 3G network was built on the government-backed standard called time-division synchronous code division multiple access, which did not support the iPhone.
Apple and China Mobile signed their iPhone distribution partnership in December 2013, in time for the operator's TD-LTE service launch.
"We forecast increased monthly average revenue per user for China Mobile. We expect its 90 million 4G subscribers to record [average revenue per user] of 100 yuan [HK$126] a month. This is significantly higher than the 3G average of 75 yuan a month and the 2G average of 50 yuan," Lane said. "Unicom and, to a lesser extent, China Telecom are facing headwinds as they lose many of their high-value 3G subscribers to China Mobile … which has resulted in [average revenues per user] falling for them."
Unicom and China Telecom have each started tests in a limited number of mainland cities for their "hybrid" 4G networks, combining TD-LTE and the more mature standard called frequency-division duplex long-term evolution.
Bernstein projected China Mobile, which had 806.63 million total subscribers at the end of December, would post revenue of 631 billion yuan for last year, up from 590.81 billion yuan in 2013.
Shares in China Mobile gained 1.18 per cent to close at HK$103.30 yesterday. Unicom advanced 0.67 per cent to HK$12.10, while China Telecom rose 2.21 per cent to HK$4.63.
