Parks Associates Blog

Thursday, January 15, 2009

China Mobile Operators Eye 3G Services

After the Chinese government issued 3G licenses to the country’s mobile operators last week, three major carriers came out today with their ambitious 3G service investment plans. Collectively, China Mobile, China Unicom, and China Telecom will eventually lash out about $41 billion on 3G infrastructure, terminal devices and 3G services over the next few years. China Mobile has the biggest agenda. Over the next two years, the incumbent mobile operator plans to install 80,000 base stations to cover 238 cities in China, the priority being the first- and second-tier cities in the populous eastern and southern parts of the country. China Unicom and China Telecom have similar plans. Each of the three carriers got a different 3G technology license: China Mobile locked in the TD-SCDMA band, China Unicom received the WCDMA spectrum, and China Telecom was awarded the CDMA2000 1x EV-DO. Apparently, global and domestic telecom equipment makers are salivating on this three-flavored cake, as the bidding for supply contracts from base stations to handsets will kick off soon.

China will likely to turn east to Japan for 3G lessons and experience. After years of exploiting a large user base with ringtones, PHS, and text messages, China mobile operators finally come to the conclusion that only 3G can boost their ARPU in the next decade.

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