CHINA: China Telecom, the country’s biggest fixed operator, demonstrated strong growth in the mobile market in 1H09. The 3G licence it was granted in early 2009 has provided it with an opportunity to enter the mobile market just as fixed-to-mobile substitution is beginning to accelerate its fixed subscriber losses.
Its mobile subscriber numbers are now beginning to grow. It averaged almost 2 million monthly net additions in 1H09, and saw strong growth in its mobile net addition market share.
In contrast, the largest mobile operator, China Mobile, is losing its dominant share of net subscriber additions, with a share of 66 percent in 1H09, down from 85 percent in 1H08.
Ovum expects China Telecom’s strong mobile growth to continue in the second half of 2009 for two reasons:
* China Telecom is leading the way on 3G network deployment. Currently, it has the largest coverage of any of the Chinese operators, with 342 cities and more than 2,000 counties covered by its CDMA EV-DO rollout as of July 2009. In contrast, China Unicom has only deployed WCDMA in just over 100 cities, and China Mobile’s TD-SCDMA networks will only cover 238 cities by the end of 2009.
* Bundling will help China Telecom continue its strong growth. The bundling of mobile and fixed services is leading to the rapid expansion of its mobile subscriber base.
China Telecom announced that in the first half of 2009, the penetration of bundled among its mobile subscribers was 48 percent. China Telecom’s dominance in the fixed and broadband markets should promote further growth in the mobile market.
Evidence from July 2009 bears this out, with China Telecom gaining 2.45 million new subscribers –- its highest monthly growth to date.
But there are difficulties to overcome
Despite the potential for further growth, China Telecom needs to address several issues if it is to remain competitive with China Unicom and China Mobile:
* Poor choice of handsets for 3G customers. Although China Telecom has been heavily advertising its 3G brand in the market, the lack of handset choice is likely to become a limiting factor for further growth of its 3G services. It needs to expand the range of handsets available soon in order to maintain its current rate of growth.
* Weak show in rural markets. China Telecom has made great progress in urban markets, but it needs to take action to win new customers in rural areas too. China Mobile is dominant in rural markets and China Unicom has recently announced its rural strategies. With mobile penetration only around 20 percent in these markets, there is huge potential for growth in rural regions.
* Over-reliance on heavy subsidies. Although the use of heavy subsidies has been a successful competitive strategy for the three operators in the 3G market, these subsidies have become a drag on financial results. China Telecom should consider targeting niche markets and enhancing its bundled offerings to reduce reliance on subsidies.
Showing posts with label China telecom market. Show all posts
Showing posts with label China telecom market. Show all posts
Friday, August 28, 2009
Saturday, August 1, 2009
Mobile services to account for over 76pc of total services revenue in China by 2014
DUBLIN, IRELAND: Research and Markets announced the addition of the "Communications Markets in China - 2009 Edition" report to its offering.
Fueled by mobile penetration into the rural market and by uptake of 3G services, China's telecommunications market will generate $187 billion by 2014, according to this latest report.
Communications Markets in China offers a precise profile of the country's converged telecommunications, media, and technology sectors based on proprietary data from our research in the Chinese market. It provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies such as WiMax, IPTV, and VoIP.
Published annually, this executive study provides a comprehensive view of the Chinese communications market by analyzing key trends, evaluating near-term opportunities and assessing upcoming risk factors.
China's telecommunications market generated US$110 billion in 2008, making it the second largest telecommunications services market in Asia/Pacific after Japan, notes Daniel Yu, analyst at Pyramid Research and author of the report.
"Given continued demand for connectivity and rising adoption of mobile and fixed broadband services, the Chinese market will increase at a compound annual growth rate of 8.8 percent between 2009 and 2014, reaching $187 billion by 2014, surpassing Japan as the largest telecommunications services market in Asia," Yu says.
"China, like many emerging markets, is becoming an increasingly mobile market, adding 71.2 million mobile subscriptions in 2008, roughly 12 percent of all additions worldwide and second only to India's 113.3 million net additions," says Yu.
Mobile service revenue growth will be supported by a penetration increase from 58 percent at year-end 2009 to 80 percent at year-end 2014. The author expects mobile services to account for more than 76 percent of total services revenue in China by 2014.
Despite the declining rate of growth in the economy, the author expects the mobile industry to experience healthy growth in 2009 as mobile operators roll out 3G networks and extend coverage to rural areas.
"China Mobile, for example, is dedicating 30 percent of its total Capex on 2G network expansion, and 70 percent of the allocated portion will be used in the rural market," Yu says.
Key findings of the report include:
* Chinese regulators restructured the industry in 2008, creating three full-service operators by consolidating fixed and mobile assets of China's five leading players.
* Although Pyramid Research does expect the reshuffle to help China Unicom and China Telecom to compete better against China Mobile, the giant's position will remain unshaken.
* 3G represents one of the most interesting opportunities in China in the near term. * In the next two years, Chinese operators will spend an estimated $41bn to develop the 3G market, presenting a golden opportunity for equipment and handset vendors.
Fueled by mobile penetration into the rural market and by uptake of 3G services, China's telecommunications market will generate $187 billion by 2014, according to this latest report.
Communications Markets in China offers a precise profile of the country's converged telecommunications, media, and technology sectors based on proprietary data from our research in the Chinese market. It provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies such as WiMax, IPTV, and VoIP.
Published annually, this executive study provides a comprehensive view of the Chinese communications market by analyzing key trends, evaluating near-term opportunities and assessing upcoming risk factors.
China's telecommunications market generated US$110 billion in 2008, making it the second largest telecommunications services market in Asia/Pacific after Japan, notes Daniel Yu, analyst at Pyramid Research and author of the report.
"Given continued demand for connectivity and rising adoption of mobile and fixed broadband services, the Chinese market will increase at a compound annual growth rate of 8.8 percent between 2009 and 2014, reaching $187 billion by 2014, surpassing Japan as the largest telecommunications services market in Asia," Yu says.
"China, like many emerging markets, is becoming an increasingly mobile market, adding 71.2 million mobile subscriptions in 2008, roughly 12 percent of all additions worldwide and second only to India's 113.3 million net additions," says Yu.
Mobile service revenue growth will be supported by a penetration increase from 58 percent at year-end 2009 to 80 percent at year-end 2014. The author expects mobile services to account for more than 76 percent of total services revenue in China by 2014.
Despite the declining rate of growth in the economy, the author expects the mobile industry to experience healthy growth in 2009 as mobile operators roll out 3G networks and extend coverage to rural areas.
"China Mobile, for example, is dedicating 30 percent of its total Capex on 2G network expansion, and 70 percent of the allocated portion will be used in the rural market," Yu says.
Key findings of the report include:
* Chinese regulators restructured the industry in 2008, creating three full-service operators by consolidating fixed and mobile assets of China's five leading players.
* Although Pyramid Research does expect the reshuffle to help China Unicom and China Telecom to compete better against China Mobile, the giant's position will remain unshaken.
* 3G represents one of the most interesting opportunities in China in the near term. * In the next two years, Chinese operators will spend an estimated $41bn to develop the 3G market, presenting a golden opportunity for equipment and handset vendors.
Monday, May 18, 2009
China: Telecoms, mobile, broadband and forecasts
DUBLIN, IRELAND: Research and Markets has announced the addition of the "China - Telecoms, Mobile, Broadband and Forecasts" report to its offering.
The Chinese telecommunications market is the largest in the world. With the mobile sector still expanding at over 15 percent going into 2009, and the long-awaited licensing of 3G services completed after finalising the industry restructure, the market is poised for yet another boost amongst what is hoped to be a more level playing field.
The importance of the regulatory regime must not be underestimated in a market like China, where political and commercial considerations are closely intertwined. China's telecommunications industry experienced much disruption during 2008.
In early 2008, massive snow storms, the worst in five decades, caused widespread disruption to telecom services. The snow storms killed at least 60 people and left tens of millions to experience a cold, dark Lunar New Year holiday. In excess of 33 million fixed and mobile services were cut and direct economic losses incurred as a result of the fierce snowstorms.
Then, later in the year, a major earthquake struck near the Sichuan provincial capital of Chengdu. The 7.5 magnitude quake resulted in thousands being evacuated from buildings in Beijing, some 1,500km from the epicentre. These natural disasters tested the networks of the major telcos, not to mention their disaster recovery response times.
Despite these testing events, the market continued to experience healthy growth. Not even the global financial crisis could stall the profound growth that has been the phenomenon of the China market in the last decade.
The networks withstood the onslaught of the Olympic Games and although uncomfortable under the scrutiny of the international press and the media glare due to China's strict enforcement of Internet regulations, the country's networks were robust and successfully beamed coverage of the major sporting event worldwide.
China surpassed Japan in 2004 as the market with the second most broadband lines after the US. In mid-2008 China became the largest broadband market in the world, finally passing the US. Going into 2009, China's broadband subscriber population passed the 80 million milestone. China has also become the top DSL market in the world. Despite this huge subscriber base, penetration remains comparatively low, meaning there is still much room for growth.
The Chinese telecommunications market is the largest in the world. With the mobile sector still expanding at over 15 percent going into 2009, and the long-awaited licensing of 3G services completed after finalising the industry restructure, the market is poised for yet another boost amongst what is hoped to be a more level playing field.
The importance of the regulatory regime must not be underestimated in a market like China, where political and commercial considerations are closely intertwined. China's telecommunications industry experienced much disruption during 2008.
In early 2008, massive snow storms, the worst in five decades, caused widespread disruption to telecom services. The snow storms killed at least 60 people and left tens of millions to experience a cold, dark Lunar New Year holiday. In excess of 33 million fixed and mobile services were cut and direct economic losses incurred as a result of the fierce snowstorms.
Then, later in the year, a major earthquake struck near the Sichuan provincial capital of Chengdu. The 7.5 magnitude quake resulted in thousands being evacuated from buildings in Beijing, some 1,500km from the epicentre. These natural disasters tested the networks of the major telcos, not to mention their disaster recovery response times.
Despite these testing events, the market continued to experience healthy growth. Not even the global financial crisis could stall the profound growth that has been the phenomenon of the China market in the last decade.
The networks withstood the onslaught of the Olympic Games and although uncomfortable under the scrutiny of the international press and the media glare due to China's strict enforcement of Internet regulations, the country's networks were robust and successfully beamed coverage of the major sporting event worldwide.
China surpassed Japan in 2004 as the market with the second most broadband lines after the US. In mid-2008 China became the largest broadband market in the world, finally passing the US. Going into 2009, China's broadband subscriber population passed the 80 million milestone. China has also become the top DSL market in the world. Despite this huge subscriber base, penetration remains comparatively low, meaning there is still much room for growth.
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