China Mobile: Slow TD-SCDMA Sales

Posted by Sam Churchill on

China Mobile says less than 3 percent of its new mobile customers are using their new 3G network, suggesting that their TD-SCDMA network is suffering from a lack of compatible devices.

China Mobile, the world’s largest mobile phone operator, reports subscribers grew from 457.3 million to 488.1 million during the first five months of 2009. According to a PC World report, which cites a recent China Mobile filing with the US Securities and Exchange Commission (SEC), the operator had 746,000 subscribers on its 3G network by the end of May, representing just 2.4 percent of total net additions since the launch of the new TD-SCDMA network on 7 January. China Mobile is listed in Hong Kong and the US, where its shares trade are listed on the New York Stock Exchange, making the company subject to regulation by the SEC.

China Mobile admitted in the filing that it has “encountered and may continue to encounter challenges in the deployment of our 3G services, which could have a material adverse effect on our financial condition and results of operations as well as our revenues and profitability.”

China Mobile is also going all out to develop converged LTE solutions utilizing time division duplex (TDD) and frequency division duplex (FDD), reports Light Reading. That will enable China Mobile to limit the time it is dependent on TD-SCDMA, help it counter the constraints of the TD-SCDMA sector’s limited ecosystem. China Mobile chairman and CEO Wang Jianzhou has previously stated that the carrier will look to launch TD-LTE (a TDD version of LTE) in 2010.

Slow take-up of its 3G services are deemed due to the relative immaturity of the TD-SCDMA standard compared to competing standards such as WCDMA, which is used by the majority of the world’s 3G mobile operators, including China Mobile’s closest domestic competitor, China Unicom moved its CDMA business to China Telecom in November of 2008.

China Unicom then merged with China Netcom, after the former sold its CDMA network to China Telecom. The newly merged company therefore has all the assets of China Netcom, plus Unicom’s nationwide GSM network with 125 million subscribers. Networks using other 3G standards (WCDMA and CDMA2000 EV/DO) have still not been launched in China, as these were delayed until TD-SCDMA was ready.

According to the SEC filing, China Mobile is counting on dual-mode handsets that support both TD-SCDMA and GSM to help spur more demand for its TD-SCDMA services by allowing users to upgrade to 3G services without having to change their mobile number. It is also planning to market laptops with TD-SCDMA data cards and home Internet access gateways to attract more 3G subscribers.

China Mobile selected ST-Ericsson’s company in China for TD-SCDMA gear. ST-Ericsson will support four of its customers to commercialize their mobile phones during 2009-2010. On January 7, 2009, China granted a nationwide TD-SCDMA 3G license to China Mobile.

ST-Ericsson, the 50/50 joint venture between Ericsson and STMicroelectronics, will develop a new low-cost platform to support affordable TD-SCDMA devices as well as high-end mobile phones, based on existing and new platforms such as the T7210, for broadband and multimedia services.

ST-Ericsson’s T7210 handset supports TD-SCDMA dual-band in 2010-2025MHz/1880-1920MHz frequencies, and has successfully completed handovers of voice and high-speed data services in order to operate optimally in Chinese dual-band network environments.

HTC will also bring its Android-powered Magic smartphone to China Mobile, HTC CEO Peter Chou told The Wall Street Journal.

China Mobile intends to sink some 58.8 billion yuan ($8.6 billion) this year alone into building out its TD-SCDMA-based 3G network to cover 238 cities across China with roughly 60,000 base stations.

The Chinese Ministry of Industry and Information Technology has awarded China Mobile, China Telecom and China Unicom licences for the country’s TD-SCDMA, CDMA 2000 and WCDMA 3G standards, respectively.

  • China Mobile, the world’s largest mobile phone operator with 415 million customers, will use TD-SCDMA in the 2010-2025MHz band for their nationwide network of voice and low-speed data, while the 1880-1920MHz band will be used for high-speed data services using TD-HSDPA/HSUPA/HSPA+.
  • China Unicom, the world’s third-biggest mobile provider, is developing a nationwide WCDMA (GSM) network.
  • China Telecom has taken over the CDMA 2000 network and also has the largest single WiFi wireless broadband network with over 30,000 hotspot locations covering hotels, restaurants and transportation facilities in over 250 major Chinese cities including Shanghai, Guangzhou, Shenzhen, Nanning, Hangzhou, Chengdu, Dalian, Kunming, Wuhan, Chongqing and Xi’an.

China had 627.3 million mobile-phone users at the end of October. India is now the second largest wireless market in the world. India’s mobile operators added 11.59 million subscribers in May, taking the country’s total to 415.25 million, according to the latest figures from Telecom Regulatory Authority of India (TRAI). The United States is the 3rd largest wireless market, according to the CTIA, with some 263 million mobile-phone users.

Posted by Sam Churchill on Monday, June 29th, 2009 at 8:15 am .

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