China Mobile: 4G Leapfrogging 3G Growth By a Margin
July 1, 2015
|InBlogs
- China Mobile is theworld’s largest mobile operator with more than 816 million mobile subscribersalmost bigger than all subscribers in USA+Japan+Korea+UK+Germany combined.
- This is the scale China Mobile possesses and is huge for all players in the ecosystem.
- However, China Mobile exactly18 months ago was struggling to push the huge 2G subscriber base to 3G TD-SCDMA整体的3 g潜艇渗透在年代为23%pite of 3G handsets becoming cheaper, 3G coverage getting better
- It took almost 60 months (or 5 years) for 3G subs penetration to reach 25% of the total subscriber basewhereas for rival China Unicom, WCDMA based operator took almost half the time to reach 25% penetration.
- This means China-Mobile’s own grown TD-SCDMA network can be seen as a debacle for the world’s largest operator and it definitely lost the plot to excite the user base to upgrade in spite of subsidies as well as cheaper 3G handsets
- However, since the launch of China’s first LTE network (based on TD-LTE cellular access technology) since some 16 months ago, things have turned around for China Mobile
- The 4G service launch can be seen as an inflection point for China Mobile to attract subscribers to a faster and efficient 4G network.
- It has taken just 16 months for 4G subscribers penetration to already cross the 20% penetration mark. In other words, it took more than57 months for China Mobile’s 3G subscribers to cross 170 million mark whereas in comparison it took just 16 months for 4G subscribers to reach the same milestone
- 3G+4G subscribers now approaching almost 50%of the total subscribers on China mobile network at the end of May 2015
- This also makesChina Mobile the largest 4G LTE operator in the worldon track to cross 250 million LTE subscriber mark this year
- The key reasons for this can be attributed to
- Smartphonesnow account9 out of tenmobile phones sold in China
- 的,更多的than8 out of 10 smartphones sold wereLTEcapablein Q1 2015
- Maturing smartphoneand internet savvyuser baselooking to upgrade their smartphones and experience
- Availability ofcheaper LTE smartphones(as low as 400yuan) within a year of launch has also helped immensely
- Push fromsupply chain with cheaper LTE related componentsalso driving theASP downfor LTE devices in China
- Additionally, proliferation ofcost-competitive open market LTE smartphone sales through online channelsalso helped drive 4G adoption
- Therise and maturing of OTT apps and services(communications, multimedia) has been another factor for consumer uptake of 4G devices and services faster than in the 3G TD-SCDMA era
- Aggressive promotions and roll-out of 4G network coveragefromChina Mobileanother factor to drive this trend. The operator has learnt from its mistakes from the TD-SCDMA era.
- We see this to become a commonplace phenomenon in other markets such as India, Indonesia, Malaysia and others where 4G uptake will be higher and faster than what it has been for 3G
- Thus we recommend the entire supply chain, OEMs and even operators tobe preparedto roll-out components, devices and networks faster and in greater scale than previously anticipated
