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Mobile & Wireless
Chinese companies get 88 percent of latest TD-SCDMA orders
China Mobile works with Agriculture Ministry to expand services to rural areas
by Ek Heng, Asia-Pacific Correspondent
Domestic companies beat foreign network equipment makers to gain the bulk of China Mobile’s third tender worth CNY8.6 billion (US$1.26 billion) for the expansion of its home-grown TD-SCDMA 3G services.
Getting the biggest share of 34 percent is Shenzhen-based ZTE Corp, followed by Huawei Technologies with 22 percent while Datang Mobile Communications Equipment and domestic partner, FibreHome Technologies were awarded 21 percent share of the order. Nokia Siemens Networks won 7 percent, and China Putian, New Postcom and Ericsson, each won 5 to 6 percent share.
In their tenders, ZTE and Huawei reportedly offered to replace for free the base stations installed by Datang Mobile which were especially set-up to support TD-SCDMA in its earlier development period. It is understood the earlier generation base stations require hardware upgrades for China Mobile to migrate to TD-LTE and the deadline offered by Datang Mobile did not gel with the telco’s target for 2010.
Results for two-thirds: remainder in August
The report last week by Reuters indicates that results announced so far covers two-thirds of China Mobile’s latest tender with the remaining orders to be announced in August. Targeted to cover 200 cities, the tender was launched in March this year. Upon completion, it will usher TD-SCDMA service to 70 percent of the country.
Following the issue of 3G licenses in January this year to three telcos, namely China Mobile, China Telecom and China Unicom, the Chinese Ministry of Industry and Information Technology said the country would invest CNY400 billion (US$59 billion) in the next three years.
US$10.2 billion for rural market
In other developments, China’s Ministry of Agriculture and China Mobile are collaborating to step up mobile services to the rural areas. Under the agreement, the telco is to spend CNY70 billion (US$10.2 billion) over the next three years to build and upgrade cellular services to the rural population.
The rural population of 750 million is an important market sector to China Mobile seeking growth opportunities. Rural customers comprised almost half of the new subscribers joining its network in 2008.
Customers from the rural areas, however, are not expected to be major users of the fledgling 3G technology, hence it is understood that China Mobile will provide GSM-base services at the rate of 10,000 villages each year over three years. It will also set up 100,000 rural information service stations. In the past five years, the telco has invested CNY 19.5 billion to expand its services to a total of 60,000 villages.
As part of the agreement, the ministry will support the use of TD-SCDMA in the rural areas. It is to be expected that initial 3G users will be agencies of the ministry serving as test beds for contents and services tailored to the needs of rural customers.
Telecom and broadband users exceed 1.2 billion
As of the end of June, China Mobile services 72 percent of the country’s cellular market with 493.1 million mobile customers, against China Unicom’s 140 million and China Telecom’s 36.9 million. China Mobile has an Internet user base of 139 million as of Q1 2009.
On the other hand, fixed-line services, which have been faced with declining numbers, are also being offered by the other two telcos with China Telecom registering 199.3 million and China Unicom reporting 108.4 million customers by the end of June. The outlook for broadband is brighter as the two telcos recorded increases in June for China Telecom to have 49.5 million and China Unicom to register 34.9 million customers.
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