3G drives up phone contracts
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China Daily, June 20, 2011
The fast growth in China's third-generation (3G) cell phone network usage is driving up customer numbers at China Telecom Corp Ltd. It aims to achieve 200 million mobile subscribers by the end of 2014.
Wang Xiaochu, the company's general manager, said China is preparing for an explosive growth of 3G users. The 3G-penetration rate, which calculates 3G user numbers against the total number of mobile phone users, was 5.5 percent in China at the end of 2010 but quickly climbed to 7.5 percent by April.
By the end of May, China Telecom had 19.67 million 3G users, accounting for 19 percent of its total mobile phone subscribers. China had 67.57 million 3G users in total in April, according to the Ministry of Industry and Information Technology.
"The quick increase of 3G users has helped China Telecom to win an increasingly larger market share in China's telecom industry," said Wang at the China Telecom CDMA Industry Chain Summit Forum in Guangzhou at the weekend.
China Telecom had 11.4 percent of China's total mobile users by April, up from 9.1 percent at the beginning of 2010. China Mobile Ltd, the world's largest telecom carrier by user number, still topped the list by reaching 606.2 million mobile subscribers in April.
Wang said he expected China Telecom's users to rise by an annual 30 million over the next three years and, by 2014, the total number of China Telecom subscribers will be almost 200 million.
"Among the newly-added clients by 2014, more than 70 percent will be 3G users," Wang said.
China Telecom is the world's biggest telecom carrier in terms of using the code division multiple access (CDMA) wireless technology, with its user numbers surpassing 103 million in April.
The company forecasts 60 million CDMA unit sales this year. By mid-June, more than 25 million units had been shipped.
The monthly shipment of 3G mobile phones accounted for more than 50 percent of all CDMA handsets in April.
Wang expected sales of China Telecom's 3G handsets to reach 29 million units this year, rising by 190 percent over 2010. It is likely that China Telecom may sell 45 million 3G terminals in 2012, Wang said.
In the first quarter, the average price of China Telecom's 3G mobile phone was 1,378 yuan, giving it a strong competitive edge.
China Telecom signed mobile phone procurement contracts with worldwide phone makers to purchase 40 million CDMA handsets on Saturday. The contracts were worth 40 billion yuan.
Mobile phone manufacturers, including Motorola Mobility Inc, ZET Corp and Huawei Technologies Co, have all benefited from the carrier's recent contracts.
Steven Yang, head of the domestic terminal business department with Huawei, expected Huawei to sell 5 million smartphones in China in the first half of the year, with sales of about 7 million in the second half.
Li Jichao, head of the CDMA terminal department at ZTE, said the company will sell 12 million smartphones worldwide this year, up significantly from last year's 3 million units.
