China Telcos In New Drives at Home, Abroad 中国三大电信运营商海内外发力

China’s 3 telcos are all in the news in this first week of the new year, with China Unicom (HKEx: 762; NYSE: CHU) making a long-awaited iPhone announcement, while an intriguing newly announced chip could give a big boost to China Mobile‘s (HKEx: 941; NYSE: CHL) 3G service. Last but not least, China Telecom (HKEx: 728; NYSE: CHA) has announced an interesting move abroad, with potentially more to come. Let’s start with Unicom, which after months of delay, will finally start selling Apple’s (Nasdaq: AAPL) newest iPhone 4S on January 13. (English article; Chinese article) This news comes as other media are reporting that Unicom will also soon launch 8 new low-cost smartphones (English article), after the company blamed a shortage of such models last year for its disappointing progress in the 3G space. These latest Unicom developments look like a step in the right direction after a disappointing year in 2011, but I still have big doubts about the company’s ability to execute due to ongoing management turmoil that led it to squander a golden opportunity for growth in 2011. (previous post). Meantime, chip developer Spreadtrum (Nasdaq: SPRD) has announced an interesting new low-cost chip designed specifically for China Mobile, which can handle the company’s homegrown 3G standard, TD-SCDMA, along with its 2G EDGE standard and also wi-fi, which the company is strongly developing. (company announcement; Chinese article) If this chip is good, which looks like a strong possibility, we could soon see a strong new field of low-cost products coming out that could be very attractive for China Mobile customers, helping it to regain some of its lost momentum this year as a new generation of leaders put their mark on the company. (previous post) Finally there’s China Telecom, which will start offering a mobile service under its own name in Britain with plans to expand to France and Germany. (English article) The move will make China Telecom China’s first telco to become a mobile virtual network operator (MVNO), as it looks to cater to the growing number of Chinese living overseas. I applaud China Telecom for its effort to look for new business opportunities abroad, though the VMNO model has been notoriously difficult and only a few companies have really succeeded in the space, such as Britain’s own Virgin Group. That said, I would give this initiative only a 20-30 percent chance for success, but would expect to see China Telecom trying more similar innovative overseas initiatives in the next 2 years.

Bottom line: New products from China Unicom and China Mobile could breath new life into their 3G business this year, while an overseas move by China Telecom is likely to fail.

Related postings 相关文章:

China Telecoms Faces Power Struggle, Half-Baked 4G 中国电信行业遭遇政府监管权利斗争

Unicom, China Telecom in iPhone 4S 中国电信有望领先推出iPhone 4S Race

China Mobile 3G: Where Are the Subscribers? 中国移动3G:订户在哪里?

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