It’s not exactly news at this point, but Chinese media are reporting that China Telecom (HKEx: 728; NYSE: CHA), the most aggressive of China’s 3 mobile carriers in the 3G space, has finally reached a deal to begin selling Apple’s (Nasdaq: AAPL) iPhone 4S on its network, with sales likely to begin sometime in the first quarter, possibly as soon as February. (English article; Chinese article) Talks for this deal have been going on for months and reported frequently in the media, and the debut would be at least a month behind the official iPhone 4S launch in China by one of the nation’s other carriers, China Unicom (HKEx: 762; NYSE: CHU) earlier this month. Still, the latest news was apparently enough to spook investors, with Unicom stock shedding 5 percent in Monday in Hong Kong trade and falling even more in overnight trade in New York. Apple’s iPhones are extremely popular in China, and security concerns over long lines at one Beijing Apple store actually led it to cancel its plans to sell the phone there earlier this month, resulting in some mild skirmishes. (previous post) That fact, combined with China Telecom’s generally aggressive approach to 3G, clearly has investors excited that China’s smallest mobile carrier will be able to further boost its momentum in the 3G space to take even more market share from Unicom and China Mobile (HKEx: 941; NYSE: CHL), the nation’s largest mobile carrier. China Telecom saw its share of China’s 3G market zoom to 28 percent by the end of 2011 from just 19 percent when the year began, as it took advantage of inferior technology at China Mobile and management missteps at Unicom to steal share from both of its rivals. The gains have brought China Telecom to within spitting distance of Unicom, whose 3G market share now stands at about 30 percent. If the iPhone deal finally does happen, which looks likely, and a launch occurs in February or March, I wouldn’t be at all surprised to see China Telecom’s 3G share pass Unicom’s by the middle of the year, making China Telecom the company to watch in 2012.
Bottom line: China Telecom’s imminent launch of the iPhone 4S on its 3G network could help to propel it past Unicom to become China’s second biggest 3G carrier by the middle of this year.
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◙ Google, Apple OS Rivalry Intensifies 苹果与谷歌在华智能手机战白热化
Web software firm Qihoo 360 (NYSE: QIHU), which has recently come under a short seller attack for allegedly inflating its user figures, is trumpeting a new tie-up with the online unit of CCTV, China’s leading TV broadcaster, to jointly create an online video platform — a development that looks great in the headlines but one that leads me to ask a simple question: Who cares? (
It’s only the second week of the new year, and already we’re seeing the latest signs that China Mobile (HKEx: 941) is aggressively moving forward with development of its 4G network with plans to expand its already-ambitious trial program for the homegrown technology called TD-LTE. Frankly speaking, I was a bit skeptical when the company began aggressive large-scale trials for the technology last year, less than 2 years after it and its 2 rivals collectively spent around $50 billion to build 3G networks and as the regulator was signaling it wouldn’t award 4G licenses for several years. But recent signs that China Mobile is getting more aggressive on its neglected 3G network, coupled with more positive signs from the regulator, have led me to revise my thinking, and if trials go well we could actually see the company get a 4G license and a limited commercial launch of TD-LTE as early as the first quarter of 2013. Let’s look at the most recent developments, which have Chinese media reporting that China Mobile will soon expand its TD-LTE trials to 3 more cities, following trials in 6 major cities during the second half of last year. (
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. (
Early this year I predicted that 2011 would be a breakthrough year for China Unicom (HKEx: 762; NYSE: CHU) (
Two chip designers, Taiwan’s MediaTek (Taipei: 2454) and China’s own Spreadtrum (Nasdaq: SPRD) are looking like interesting bets these days, as they seek to profit from burgeoning demand for cheap smartphones in emerging markets like China and India where carriers are trying to boost recently built 3G networks. In fact, MediaTek has always been a specialist at cheap cellphone chips, allowing it to play at the low end of a market otherwise dominated by the likes of Qualcomm (Nasdaq: QCOM) and Texas Instruments (NYSE: TXN). It entered the smartphone market with an Android-based chip earlier this year, and, after landing supply deals with names like Lenovo (HKEx: 992) and ZTE (HKEx: 763; Shenzhen: 000063) is reportedly in talks for another big deal that could see it supply Huawei, another leading cheap smartphone maker. (
A leaked memo from China Mobile (HKEx: 941; NYSE: CHL), if it’s true, is providing an embarrassing look at the spectacular failure of the company’s sputtering 3G service. According to the memo, the country’s dominant mobile carrier now has a paltry 3.5 million data card users, representing a tiny portion of its 640 million total users, even though data services are supposed to be a key future growth driver. (
