AT&T Archives ~ Business China : news for investors in China

TELECOMS: Spurned by US, Huawei Turns to UK

By newsdoug on February 7, 2018

Bottom line: Huawei’s latest big financial commitment to the UK is mostly for show, but Britain could still emerge as a winner over the longer term if Huawei conducts more R&D work in its British labs.

After getting the cold shoulder from the US for its smartphones, telecoms superstar Huawei is turning increasingly to Europe, and specifically to Britain, for consolation. That’s the key takeaway from the latest reports that say Huawei has told British Prime Minister Theresa May that it will spend a further 3 billion pounds ($4.2 billion) on procurement from the UK on top of its other commitments to the country. (English article)

This particular move seems mostly political, and also it’s questionable how significant it is. Huawei made its commitment last week during a trip by Theresa May to China, and this kind of mega-commitment is quite common during these meetings between Chinese and global leaders. The fact of the matter is that Huawei posted 600 billion yuan ($97 billion) in sales last year, meaning it had to spend perhaps half of that amount, or around $50 billion, on procurement of various components for its core networking equipment and smartphones. Read Full Post…

SMARTPHONES: Dumped by AT&T, Huawei Enters US with Supermodel

By newsdoug on January 12, 2018

Bottom line: Huawei’s decision to go ahead with a US market entry for its latest high-end phone, despite collapse of a tie-up with AT&T, is likely to produce very limited results due to lack of a carrier partner.

If you can’t get a serious business partner, at least get a pretty face. That seems to be the message coming from a frustrated Huawei, which has announced it has signed on “Wonder Woman” star and model Gal Gadot as chief experience officer as it prepares to enter the US. This somewhat frivolous move was most likely part of a bigger announcement the company hoped to make for a grander entry to the US in partnership with corporate partner AT&T (NYSE: T).

But as many market watchers may already know, the AT&T deal reportedly collapsed at the last moment for unexplained reasons. The new tie-ups were all set to be unveiled at the Consumer Electronics Show (CES) taking place this week in Las Vegas. While the show went on and Huawei announced plans to release a version of its high-end Mate 10 in the US, with Gadot as product spokeswoman, the AT&T announcement never came. Read Full Post…

VIDEO: LeEco Powers Into US with Phones, TVs and Lionsgate

By newsdoug on October 20, 2016

Bottom line: LeEco’s new US launch for its TVs, smartphones and video service is almost guaranteed to fail due to underwhelming product offerings and stiff competition.

A year after opening its US e-commerce site, online video superstar LeEco (Shenzhen: 300104) has finally launched some of its leading products in the world’s biggest but also one of its most competitive markets. LeEco, formerly known as LeTV, announced it will start selling its smartphones and smart TVs in the US, as well as a new customized version of its core online video service. My main response to this aggressive and ambitious push is: Good luck!

I’ve been a big LeEco doubter for a while now, since the company has gone from relatively obscurity to superstar in just a couple of years through a series of aggressive expansions fueled mostly by taking on new investors and selling its overvalued stock. Its name change from LeTV to LeEco nicely summarizes its aspirations, since the company now bills itself as developer of an ecosystem that delivers entertainment content over a range of devices and services. Read Full Post…

China News Digest: September 10-12, 2016

By newsdoug on September 12, 2016

The following press releases and news reports about China companies were carried on September 10-12. To view a full article or story, click on the link next to the headline.
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Banks Asked Not to Stop Lending to Troubled Firms (English article)
LeEco (Shenzhen: 300104) Partners with AT&T (NYSE: T) on Super Bike Promotion in US (Chinese article)
LMVH Opens Stores for Guerlain Luxury Brand on Alibaba’s (NYSE: BABA) Tmall (Chinese article)
BYD (HKEx: 1211) Says Hasn’t Been Notified of Fine for Cheating at Tianjin Unit (Chinese article)
Victor Koo Rumored Stepping Down as CEO of Youku Tudou (Chinese article)

ENTERTAINMENT: LeTV Goes to CES, Prepares US Smart TV Launch

By newsdoug on December 29, 2015

Bottom line: LeTV will announce the launch of a new smart TV and video services in the US during the Consumer Electronics Show in last Vegas next month, but the foray will end in failure due to inexperience and fierce competition.

China’s LeTV (Shenzhen: 300104) looks set to launch its trademark smart TVs and affiliated video service in the US, a move that would make it the first Chinese player to enter a major western market. In this case LeTV is making lots of noises that point to such a move, though it hasn’t officially announced anything just yet.

The company is preparing to attend the massive Consumer Electronics Show (CES) in Las Vegas next month for the first time, providing the perfect venue for such an announcement. The other major signals for such a launch come from LeTV’s own recently launched US online mall, lemall.com/us, whose product offerings include a $799 smart TV that is currently not available but “coming soon”. Read Full Post…

INTERNET: LeTV Surprises With Low-Key Global Appearance

By newsdoug on March 4, 2015

Bottom line: LeTV could be a company to watch as it embarks on a global expansion, drawing on a savvy business model that sells smart TVs and smartphones at low prices in exchange for video subscription contracts.

A major telecoms show happening this week in Spain was filled with small bits of news, but one of the biggest surprises came when I stumbled on an area decked out with signage for the racy online video firm LeTV (Shenzhen: 300104). So far as I could tell, none of the company’s many rivals like Youku Tudou (NYSE: YOKU) and iQiyi were at the show, and even global leader YouTube was absent. That’s not hard to understand, since the Mobile World Congress taking place in Barcelona is a telecoms show whose main attendees are telecoms equipment and smartphone makers. Read Full Post…

Virtual Networks Coming in 2013 虚拟运营商或于明年进入中国电信市场

By newsdoug on December 27, 2012

China to allow VNOs The Chinese media have been buzzing these last few days with word that the telecoms regulator will soon roll out a highly anticipated plan to allow virtual network operators (VNOs) into China in 2013, finally breaking the monopoly on telecoms services held by the nation’s 3 major telcos. Such a move could suddenly open the door for homegrown companies like Tencent (HKEx: 700) and Sina (Nasdaq: SINA) to offer specialized services over their own privately branded virtual networks, but would also open the door for bigger global names like France Telecom (Paris: FTE) and AT&T (NYSE: T) to enter the long-closed market.

Read Full Post…

Telecoms Infrastructure Prepares to Open 中国电信基建市场或更开放

By newsdoug on March 12, 2012

I’ll wrap up this sunny Monday morning in Shanghai with a look at a subject that’s a bit techie but of big interest to me and global telcos, namely the subject of China’s largely closed telecoms infrastructure market where change could be coming soon. Longtime industry watchers will recall that foreign telcos running the range from AT&T (NYSE: T) in the US to Europe’s Vodafone (London: VOD) held out big hopes for the China market after the country officially joined the World Trade Organization (WTO) in 2001. Despite making vague commitments to open the market, China made it extremely difficult and unprofitable for the few foreign ventures it allowed in the space, meaning that today the Chinese telecoms service industry is still dominated by domestic companies, most notably the country’s 3 major telcos, China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA). Now Chinese media are reporting that the nation’s top telecoms regulator, the head of the Ministry of Industry and Information Technology (MIIT), said late last week in Beijing that the government has officially made boosting private investment in telecoms infrastructure part of its new policy, and the regulator is now drafting specific details to implement that plan. (English article) It’s obviously still too early to say if this new policy will change anything, but clearly there could be a huge new opportunity for foreign telcos to build or operate networks and related infrastructure like data centers. AT&T was one of the first to enter the market even before China entered the, but its operation — which is now part of French-American company Alcatel Lucent (Paris: ALUA) — was always limited to the Shanghai market and thus was never able to compete very effectively, especially for Chinese customers. Vodafone also held out big hopes for the market about a decade ago when it made a multibillion dollar investment in China Mobile when the country’s top mobile carrier made its landmark public listing in Hong Kong. But again, that investment never helped Vodafone make any inroads into China, with the result that Vodafone finally ended up selling its China Mobile stake in 2010. Many western companies have given up on China in the current climate, but clearly there’s big opportunity for profits from a market that is both the world’s largest by mobile subscribers and Internet users. If this new plan moves forward, which looks likely based on the minister’s comments, look for some new investment guidelines perhaps as soon as the end of the year. If that happens, look for a flurry of new telecoms projects from the likes of globla players like AT&T and Vodafone, as well as regional players like Korea’s SKTelecom (Seoul: 107670), Singapore’s Singtel (Singapore: ST) and Taiwan’s Chunghwa Telecom (Taipei: 2412) starting in 2013.

Bottom line: A proposed opening of China’s telecoms infrastructure market could result in a flurry of deals by regional and global telcos in China as soon as next year.

China Telecom, Unicom Enter Contrition Mode 中国电信和中国联通悔过自新

By newsdoug on December 5, 2011

Following the landmark launch of a probe against them last month for their lock on the domestic broadband Internet market, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) have suddenly become quite contrite in their effort to avoid becoming the first major state-run firms to be found guilty of exploiting the masses through monopolistic practices. The Chinese media were buzzing over the weekend with reports that the 2 companies, China’s second and third biggest telcos, were both promising to end their monopolistic ways and to improve broadband speeds and lower prices if the government would end its investigation. (English article) As a customer of China Telecom, I can happily report that my snail-paced broadband service suddenly became much faster during last week, and that I suspect this new pledge to be more consumer-focused is at least partly and possibly completely behind the change. So what does all this mean for China Telecom and Unicom? The answer is probably a moderate hit to revenues and profitability for their lucrative broadband business in the short- to medium-term, as they are forced to put more resources into providing better service while at the same time lowering fees they charge to consumers. Considering that broadband is an important part of their business, this does look like relatively bad news for both companies, and, as I said when the probe was first announced, I would look for some fairly significant profit erosion in the next 1-2 years, especially for Unicom which has struggled to find its footing in the country’s fast-growing 3G mobile market. (previous post) Meantime, China Telecom continues to look impressive in its aggressive push to become a major player in the telecoms space, this time signing an interesting agreement with US telecoms giant AT&T (NYSE: T) to offer wi-fi roaming services in each others’ markets. (Chinese article) Roaming services for traditional voice services have been common for years now, but in the coming age where mobile companies get more and more of their revenue from data services this is exactly the kind of big global deal that China’s telcos need to be pursuing to position themselves as leaders in the new era of high-speed 3G and 4G telecoms services.

Bottom line: China Unicom and China Telecom will see moderate profit erosion after making concessions to try and end an anti-monopoly probe into their broadband services.