We have incorporated the latest telecoms data from China’s Ministry
of Industry and Information Technology and Chinese operators in our
forecast scenarios, which have been extended to 2016. We have upgraded
our expectations for China’s fixed-line industry after the pace of the
decline in the number of subscribers showed signs of a slowdown. We now
forecast 286mn fixed-line subscribers in China by end- 2011, up from our
previous forecast of 273mn. While we have largely retained our forecast
for the number of mobile subscribers in China, we have revised our
expectations for the number of 3G subscribers. The transition from 2G to
3G subscriptions has accelerated and the latter formed the main
subscriber growth driver in Q311. We expect 111mn 3G subscribers in
China by end-2011 and we forecast this number to increase to 773mn by
2016, a penetration rate of 56.2%.
China Telecommunications Market Report Q1 2012
The acceleration in fixed-to-mobile migration could be attributed to mobile operators’ heavy emphasis on promoting 3G services, which are significantly more lucrative than conventional 2G services. China Unicom reported that its 3G ARPU in the first nine months of 2011 was three times higher than that of 2G. However, we believe that operators have yet to reap the rewards as network expansion and marketing costs weigh heavily on their profitability. Nevertheless, we believe that the aggressive tactics are necessary to secure market share in the fledgling market, before shifting their attention to improving their profit margins. At the end of September 2011 China Mobile had a 42.4% market share in the 3G segment in September, while China Unicom and China Telecom had 29.7% and 27.9% respectively. By comparison, China Mobile had a dominating 67.4% in the overall Chinese mobile market.
Taiwan’s National Communications Commission announced in September 2011 that it has approved Chunghwa Telecom’s submarine cable proposal, which would link Kinmen (an outlying island of Taiwan) and Xiamen (a city in China’s south eastern cost). China’s three mobile operators are all involved in the project and they would share 50% of the construction cost, which is expected to reached TWD200mn. The establishment of a direct communication link between China and Taiwan would boost the quality of services while reducing costs as data traffic, currently, is re-routed to a third-party country. This development bodes well for consumers, and businesses in particular, as companies are increasingly embracing high-bandwidth data services such as cloud computing and video conferencing.
On the macroeconomic front, the after-effects of China’s credit binge are starting to kick in, with a number of our core macroeconomic and financial market views playing out. With real GDP growth at its lowest level since 2009 in Q311 at 9.1%, we caution that the macroeconomic conditions are likely to deteriorate further as there is no easy cure for the credit hangover. Meanwhile, the Communist Party of China’s ability to govern could be seriously tested by the myriad economic, social and environmental challenges in future decades. The best case scenario for any eventual political transition would entail an elite-led liberalisation of the authoritarian system, while the worst case scenario would involve a violent change of regime.
China Telecommunications Market Report Q1 2012
The acceleration in fixed-to-mobile migration could be attributed to mobile operators’ heavy emphasis on promoting 3G services, which are significantly more lucrative than conventional 2G services. China Unicom reported that its 3G ARPU in the first nine months of 2011 was three times higher than that of 2G. However, we believe that operators have yet to reap the rewards as network expansion and marketing costs weigh heavily on their profitability. Nevertheless, we believe that the aggressive tactics are necessary to secure market share in the fledgling market, before shifting their attention to improving their profit margins. At the end of September 2011 China Mobile had a 42.4% market share in the 3G segment in September, while China Unicom and China Telecom had 29.7% and 27.9% respectively. By comparison, China Mobile had a dominating 67.4% in the overall Chinese mobile market.
Taiwan’s National Communications Commission announced in September 2011 that it has approved Chunghwa Telecom’s submarine cable proposal, which would link Kinmen (an outlying island of Taiwan) and Xiamen (a city in China’s south eastern cost). China’s three mobile operators are all involved in the project and they would share 50% of the construction cost, which is expected to reached TWD200mn. The establishment of a direct communication link between China and Taiwan would boost the quality of services while reducing costs as data traffic, currently, is re-routed to a third-party country. This development bodes well for consumers, and businesses in particular, as companies are increasingly embracing high-bandwidth data services such as cloud computing and video conferencing.
On the macroeconomic front, the after-effects of China’s credit binge are starting to kick in, with a number of our core macroeconomic and financial market views playing out. With real GDP growth at its lowest level since 2009 in Q311 at 9.1%, we caution that the macroeconomic conditions are likely to deteriorate further as there is no easy cure for the credit hangover. Meanwhile, the Communist Party of China’s ability to govern could be seriously tested by the myriad economic, social and environmental challenges in future decades. The best case scenario for any eventual political transition would entail an elite-led liberalisation of the authoritarian system, while the worst case scenario would involve a violent change of regime.
- Executive Summary
- SWOT Analysis
- China Wireline (Fixed-Line and Broadband) Market SWOT
- China Mobile Market SWOT
- China Political SWOT
- China Economic SWOT
- China Business Environment SWOT
- Risk Reward Ratings
- Asia Pacific
- Table: Asia Telecoms Risk Reward Ratings Q112
- China
- Industry Forecast Scenario
- Mobile
- Table: China Telecoms Secto
- ARPU
- Table: China Telecoms Secto
- Fixed Line
- Table: China Telecoms Secto
- Internet
- Table: China Telecoms Secto
- Market Data Analysis
- Mobile Market
- Table: China Mobile Market, September 2011
- Table: China Mobile Net Additions, September 2011
- ARP
- Table: China ARPU Levels (CNY)
- 3G
- Table: China 3G Mobile Market, September 2011
- 4G
- Mobile Contract Wins
- Table: Mobile Contract Wins 2009-2011
- Regional Mobile Markets
- East China
- Table: East China Regional Mobile Markets
- Guangdong
- Zhejiang
- Shanghai
- Beijing
- Central China
- Table: Central China Regional Mobile Markets
- Hubei
- West China
- Table: West China Regional Mobile Markets
- Sichuan
- Chongqing
- Mobile Operator Data
- Table: China Mobile Market Overview
- Table: China Mobile
- Table: China Unicom
- Table: China Telecom
- Mobile Content
- Regional Outlook
- Table: Selected NFC Developments, 2011
- Country Outlook
- Overview
- Table: China Mobile VAS Revenues (CNYbn)
- Mobile Broadband
- Mobile TV
- Value-Added Services Timeline
- Table: Selected VAS Services Launched, 2009-2011
- Handset Market Share
- Fixed Line
- Table: China Local Access Market, September 2011
- Regional Fixed-Line Markets
- East China
- Table: East China Regional Fixed-Line Markets
- Central China
- Table: Central China Regional Mobile Markets
- West China
- West China Regional Fixed-Line Markets
- Broadband
- China Telecom
- China Unicom
- Broadband Content
- Table: China’s Internet Applicatio
- Regulatory Environment
- Table: China Regulatory Bodies And Their Responsibilities
- Industry Developments
- Regulatory Developments
- Competitive Landscape
- Competitor Analysis Tables
- Table: Key Player
- Table: Selected Operator
- Company Monitor
- HTC
- Table: HTC: Q211 Profi
- Operator Profiles
- China Telecom
- China Mobile (Hong Kong)
- China Unicom
- Country Snapshot: China Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Glossary Of Terms
- Table: Glossary Of Terms
- BMI Methodology
- How We Generate Our Industry Forecasts
- Table: Key Indicators For Telecommunications Industry Forecasts
- Telecoms Business Environment Ratings
- Risk/Reward Ratings Methodology
- Ratings System
- Indicators
- Table: Ratings Indicators
- Weighting
- Table: Weighting Of Indicators
- Sources
