China Mobile (CHL), the world’s largest mobile operator by subscribers, has reportedly exited 2009 with 5.51 million 3G subscribers and 87,000 3G base stations. The company’s 3G network is based on the home-grown TD-SCDMA standard.
Moreover, China Mobile plans to complete nationwide deployment of its 3G network in 2010 instead of 2011. The carrier is targeting at least 70,000 3G cell towers in 2010 to expand national 3G network coverage. The company has earmarked approximately RMB30 billion (US$4.4 billion) for 2010 on account of 3G terminal subsidies.
China Mobile remains the lead player in the Chinese wireless market with 70% market share. The company launched its 3G TD-SCDMA network in early 2009, having already covered approximately 70% of the Chinese cities. China Mobile has completed the third phase of the TD-SCDMA network deployment in 2009. So far, the operator has invested roughly RMB80 billion (US$11.7 billion) for 3G network construction.
Despite its strong market position, China Mobile faces the threat of market share erosion due to stiff competition from its peers China Unicom (CHU) and China Telecom (CHA) as they both operate internationally acclaimed technology-based 3G networks. China Unicom exited 2009 with roughly 3 million 3G subscribers driven by healthy customer accretion in the last two months.
China Mobile is increasingly focused on differentiating its 3G services from competition by offering a large assortment of premium 3G TD-SCDMA smartphones (called “Ophones”) and better value-added services. Ophones are being developed using the company’s proprietary “Open Mobile System (OMS)” smartphone operating system based on Google’s (GOOG) open-source Android software platform.
China Mobile is collaborating with leading handset vendors, such as Motorola (MOT), LG, Samsung, HTC and Dell (DELL) for its Ophone project. The company has already developed 266 TD-SCDMA handset models through these collaborations. The relatively low priced Ophones (compared to iPhone) are designed to drive demand for China Mobile’s less-mature 3G TD-SCDMA network in China and boost subscriber base.
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