Bottom line: China’s telcos won’t accelerate their 5G network building even if licenses are issued earlier than expected this year, though foreign equipment suppliers could benefit if Huawei is hobbled by the US-China trade wars.
5G coming to China sooner than expected?
What a difference a decade makes. That’s about how long has passed between China’s issuing of 3G wireless licenses and the upcoming issue of 5G licenses two generations later. I remember in the 3G era how China dragged its feet forever, and finally issued licenses several years after the rest of the world. This time around it appears to be moving more quickly, driven by what appear to be political and economic factors.
The topic has popped into the headlines again this week with word that China’s telecoms regulator will “soon” issue 5G licenses. (English article) The signals coming from the Ministry of Industry and Information Technology (MIIT) have been pointing to a release of licenses this year all along. But this could mean that will happen sooner rather than later, since many were previously expecting licenses toward the end of the year. Read Full Post…
Bottom line: A bevy of signals from Beijing indicate China will roll out 5G networks around 2020, in step with major Western markets, providing a boon for telcos, equipment sellers and Internet companies.
China gets serious on 5G
After years of watching China following years behind the West in rolling out its next-generation wireless networks, there are growing signs that the country intends to be a leader rather than a laggard with upcoming 5G service. The latest signal in that drive is coming from the country’s state planner, which has just announced that five or more cities will start to build rudimentary 5G networks starting next year.
All this may sound quite boring for many of my readers who are more interested in high-tech companies than stodgy telecoms carriers. But it really has huge implications for not only China’s big 3 telcos, but also the nation’s booming Internet industry that will become the direct beneficiaries of 5G networks that offer data speeds that are well ahead of what you can get from current 4G technology. Read Full Post…
Bottom line: Unicom’s choice of 14 partners for a mixed-ownership reform plan involving its Shanghai-listed unit is far too many, and is ultimately likely to fail when those partners become frustrated and sell their shares.
Unicom puts 14 new partners into its mix
What I feared might happen has come to pass in a mixed-ownership reform plan being crafted by China Unicom(HKEx: 762; NYSE: CHU), one of the nation’s three telcos that is experimenting with selling some of itself to private investors. That’s a reference to reports in early August that the company might be planning to take on as many as 20 partners in the plan to sell a significant stake in its Shanghai-listed unit, China United Network Communications (Shanghai: 600050), to strategic private investors.
My worry was that taking on so many partners would effectively dilute the plan, since none of the partners would receive a very big stake and Unicom’s attention would be too fragmented. As it turns out, the number 20 was a bit too high, but not far off the mark. That’s the latest word, as Unicom has finally announced its mixed-ownership reform plan that will see it partner with 14 private companies in a bid to become more dynamic. Read Full Post…
Bottom line: Unicom’s mixed-ownership reform plan could prove a dud if it chooses too many partners, which looks likely based on the latest reports.
Unicom eyes too many cooks for pilot plan
I haven’t written for a while about a highly anticipated plan to inject some new life into perennial laggard telco China Unicom (HKEx: 762; NYSE; CHU) through a Beijing-led pilot program, even as reports build that an announcement of the mixed-ownership plan are imminent. Those reports include the latest word that an announcement could finally come later this month.
But what caught my eye in this particular report was the number 20, a reference to how many private companies could potentially take part in this plan. That number looks a bit ridiculous to me, and would completely wipe out any potential benefits that Unicom might have received from the program. But perhaps that’s what this laggard carrier wants. Read Full Post…
Bottom line: China Telecom’s aggressive bidding for a government contract highlights its more entrepreneurial style, while Unicom’s latest announcement on its private ownership plans reflects it conservative, bureaucratic style.
Unicom mixed ownership program crawls ahead
Two of China’s trio of wireless telcos are in the news today, reflecting an effort by Beijing to breathe some life into these laggard state-run behemoths that always seem unable to realize their potential. The first headline has China Telecom (HKex: 728; NYSE: CHA), the smallest of the nation’s 3 carriers, making an aggressive bid to essentially provide services for free to a government agency in northeast Liaoning province. The second has Unicom (HKEx: 762; NYSE: CHU), the second largest carrier, disclosing some more details on its plan to introduce some private capital to the company. Read Full Post…
Bottom line: China Telecom, Unicom and China Broadcasting Network could share the costs of a 5G network to lower costs, while China Mobile is likely to construct a network on its own.
China telcos consider 5G network sharing
As earnings season reaches a crescendo, wireless carrier China Telecom (HKEx: 728; NYSE: CHA) is raising an old theme by saying it might consider sharing resources with someone else in building a next-generation 5G network. This particular topic first surfaced more than a year ago when China Telecom and rival Unicom (HKEx: 763; NYSE: CHU) studied the possibility of sharing 4G resources, even though they ultimately each built their own networks. (previous post)
The interesting twist this time is that Beijing is rolling out a program to inject private capital into the telecoms sector, meaning perhaps China Telecom and the other telcos could be allowed to pick private-sector partners for their 5G networks. Another interesting wrinkle comes in the form of a fourth state-run telco that was assembled from the nation’s many cable TV companies last year and would probably like to have its own telecoms network. Read Full Post…
Bottom line: China’s VNO program appears to be gaining momentum heading into its third year, and could reach the 200 million subscriber mark by the end of 2017.
Virtual network operators gain momentum
It’s been more than a year since I last wrote about China’s fledgling attempt to breathe new life into its telecoms services sector by creating virtual network operators (VNO), mostly because the program seemed to be sputtering in its first couple of years. But new data from the telecoms regulator seems to suggest the industry may finally be finding its legs, and could be starting to take some meaningful market share from the nation’s monopoly of 3 big state-run telcos.
The headline figure underpinning my assertion is 43 million, which appears to be the number of VNO subscribers in China at the end of last year. (Chinese article) I need to give a quick disclaimer here, as nowhere in the article is the term VNO or variant MVNO used to describe this sector, which is called the “mobile resale business”. But that term, combined with a description of the program, does seem to indicate that these are VNO subscribers. Read Full Post…
Bottom line: China Telecom’s sale of several key entertainment assets to a separately run and listed unit reflects the company’s more dynamic nature compared with its 2 peers, as it tries to create services that can compete with private-sector rivals.
China Telecom (HKEx: 728; NYSE: CHA) is showing once more why it’s a telco to watch, with word that it’s formally spinning off 4 of the main entertainment businesses on its main E Surfing platform to one of its independently run and listed units. In this case the telco is spinning off the four to its fully-owned but separately managed Besttone Holdings (Shanghai: 600640) unit, in what looks like a bid to make these services more competitive with private sector rivals. Read Full Post…
Bottom line: Unicom is likely to choose all 3 of the BAT companies as equity and strategic partners under Beijing’s pilot program to invigorate big state-run companies, but none of the tie-ups will produce meaningful results.
Unicom eyes BAT partnerships
China Unicom (HKEx: 762; NYSE: CHU), the perennial laggard among China’s 3 major telcos, is reportedly looking for new life by tying up with the nation’s big 3 Internet companies, Tencent (HKEx: 700), Alibaba (NYSE: BABA) and Baidu (Nasdaq: BIDU). I might normally say “so what?” to this particular development, since it seems like Unicom and its 2 fellow state-run telcos are regularly announcing this kind of partnership, always with little or no meaningful impact on their business. Read Full Post…
The following press releases and news reports about China companies were carried on October 19. To view a full article or story, click on the link next to the headline.
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China’s Wanda Courts Hollywood With Film Subsidy (English article)
China Life (HKEx: 2628) Invests $2 Bln In Starwood Capital Hotel Portfolio (PRNewswire)
China Unicom (HKEx: 762) Says Profit in First 3 Quarters Down 80.6 Pct (HKEx announcement)
UCar to Raise 10 Bln Yuan in Bet on Car E-commerce (Chinese article)
Honda (Tokyo: 7267) planning new China car factory for 2019 start: sources
The following press releases and news reports about China companies were carried on October 11. To view a full article or story, click on the link next to the headline.
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ZTO Express Files Prospectus for NY IPO to Raise up to $150 Mln (Chinese article)
Shared Bike Service Ofo Raises $130 Mln, to Work With Xiaomi, Didi (Chinese article)
China Unicom (HKEx: 762) Says Studying Mixed Ownership Reform Program (HKEx announcement)
SMG’s BesTV Enters Strategic Partnership with NBA (Chinese article)
Hollysys (Nasdaq: HOLI) to Pay a Regular Annual Dividend for 2016 (PRNewswire)
