China Invests Billions on 3G - Analyst Blog

China’s big three telecom carriers China Mobile (CHL), China Unicom (CHU) and China Telecom (CHA) have invested RMB160.9 billion (US$23.8 billion) on 3G networks in 2009, according to the Ministry of Industry and Information Technology (“MIIT") of China. 

MIIT also reported that the operators constructed 325,000 3G base stations last year. China Mobile has built 87,000 3G base stations in 2009 and targets at least 70,000 3G cell towers in 2010. MIIT anticipates that China’s 3G user base has exceeded 15 million at the end of 2009. China Mobile and China Unicom have reportedly exited last year with 5.51 million and 3 million 3G subscribers, respectively. 

China Mobile, the largest wireless carrier in the world with roughly 518 million customers, recently revealed that it has so far invested approximately RMB80 billion (US$11.7 billion) for 3G network construction. The carrier has completed the third phase of the 3G network (based on the home-grown TD-SCDMA standard) deployment in 2009 having covered approximately 70% of the Chinese cities. 

China Telecom, the smallest of three operators, is attributed with faster 3G network developments vis-à-vis its peers. So far, the operator’s 3G network (based on the CDMA 2000 standard) has covered 31 Chinese provinces, cities and autonomous regions. China Telecom, which was the first Chinese carrier to release 3G mobile phone numbers, has already launched more than 500 3G handset models. 

China Unicom, which officially commenced the commercial roll-out of its 3G WCDMA services in October 2009, has reportedly covered 335 Chinese cities at the end of 2009. The operator has launched 3G roaming services in 64 countries and regions across the world in collaboration with more than 100 operators. iPhone has been a key driving force behind the rapid adoption of China Unicom’s 3G network as more than 70% iPhone users have reportedly signed up for 3G WCDMA services. 

The Chinese 3G market is expected to grow at a brisk rate in 2010 and is forecasted to reach approximately RMB7.4 billion (US$1.1 billion), representing a four-fold increase from the 2009 level. Moreover, the overall 3G user base is expected to reach 80 million by the end of the current year, indicating a massive growth prospect. 

The incumbent Chinese carriers are expected to pump in greater resources for 3G network build-outs in 2010. Rapid growth potential for 3G services in China will foster a lucrative business environment for electronics component and telecom equipment vendors, especially handset manufacturers.
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