China Mobile (CHL), the largest wireless operator in the world by customer, has announced its updated 3G subscriber target. The company expects to amass roughly 80 million 3G customers within 2 years of the first phase of commercial service rollouts. This will enable the wireless giant to capture approximately one-third of the Chinese 3G market. However, the new subscriber target represents a decline from the original guidance of 100 million, largely due to intense competition. 
 
China Mobile remains the leading player in the Chinese wireless market with 70% market share, leapfrogging the second placed China Unicom (CHU). However, the overhaul of the Chinese telecom industry in late 2008 has intensified the competitive scenario in the domestic wireless market with the addition of a new market entrant China Telecom (CHA).
 
The Chinese government issued three 3G wireless licenses in early 2009 with China Mobile being awarded the license for TD-SCDMA, an indigenously developed 3G standard. On the other hand, its Chinese peers China Unicom and China Telecom received licenses for the widely popular international 3G standards. 
 
China Mobile commenced its commercial 3G service offering in January 2009 having already launched services in 38 Chinese cities. At the end of the first-half of 2009, the company had approximately 959,000 3G customers across its coverage regions. Parallel to its 3G network, the company is also accelerating the deployment process of TD-LTE, a fourth-generation (4G) mobile broadband technology based network, with field tests expected to begin in early 2010.
 
The company plans to spend RMB 58.8 billion (US$8.6 billion) on 3G network build-outs in 2009 and aims to deploy approximately 60,000 base stations across 238 cities. To make its 3G venture successful, China Mobile has joined leading handset vendors to conduct co-funded research and development and troubleshoot any technical difficulties.
 
The aggressive 3G deployment plan through 2009 is expected to further establish China Mobile as the dominant player in the Chinese wireless market. However, the company may face challenges of adaptability and performance of the TD-SCDMA technology given the faster network speeds offered by competing technologies of its two rivals.
 
Nevertheless, the company’s TD-SCDMA based 3G initiative is backed by the Chinese government, which has instituted a number of favorable policies to expedite its development and wider deployment.
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