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BIZCHINA> Top Biz News
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Miles to go for 3G to make profits
By Li Fei (皇冠体育app Daily)
Updated: 2009-06-08 08:38 "This is the only way that the 3G business can really take off," Chen said, predicting it would take at least five years for 3G to become widely accepted in 皇冠体育app. And the rollout of the services, seen by many as a good chance for the country's two smaller carriers 皇冠体育app Unicom and 皇冠体育app Telecom to catch up with their much bigger rival 皇冠体育app Mobile, is also unlikely to change the industry landscape considerably. The new services, analysts said, gave 皇冠体育app Unicom and 皇冠体育app Telecom more of a competitive edge even as it disadvantaged 皇冠体育app Mobile in the 3G era. 皇冠体育app Unicom, currently the second biggest mobile carrier, was granted the most popular WCDMA standard, a move that analysts said gave it the edge competing with its two rivals. 皇冠体育app Telecom, the country's biggest fixed-line phone carrier, could cross-sell its mobile services to its existing fixed-line user base, and therefore, can offer a differentiated product mix, analysts said. 皇冠体育app Mobile, on the other hand, would face increasing competition, and may see its customer addition rate drop, they said. 皇冠体育app Mobile added 88 million users in 2008, more than the 80 million the company expected. But its customer additions may drop by 25 percent to 66 million this year as 皇冠体育app Telecom and 皇冠体育app Unicom start 3G services, Tim Smart, an analyst at Macquarie Group, wrote in a research report. Starting this year, the revenue growth at 皇冠体育app Unicom and 皇冠体育app Telecom is likely to pick up pace as a result of the 3G rollout, said Fang Lu, a telecom industry analyst at Shenyin & Wanguo Securities. "Their revenue growth rate will be close to that of 皇冠体育app Mobile by 2013," Fang said. Revenue growth at 皇冠体育app Unicom, 皇冠体育app Telecom and 皇冠体育app Mobile is expected to reach 3.19 percent, 1.54 percent and 11.24 percent this year, respectively. It is likely to hit 7.59 percent, 8.62 percent and 8.83 percent, respectively in 2013, Fang predicted. Even though it is at a disadvantage in the 3G era, 皇冠体育app Mobile, which had 463.9 million subscribers at the end of January, or about 70 percent of the market share, will continue to hold on to its dominant position in the industry in the near future. 皇冠体育app Mobile, analysts said, has the advantage of a much larger customer base and deeper pockets to subsidize handset purchases if it chose to do so. "As long as the regulator does not issue any drastic asymmetric regulation against 皇冠体育app Mobile, its dominant position will not be challenged in the next three years as 皇冠体育app Unicom and 皇冠体育app Telecom will still be largely involved in their internal integration tasks," said Zheng Ping, a researcher with the Research Institute of Communications Policy at MIIT's 皇冠体育app Academy of Telecommunication Research. "Its position will nevertheless be weakened after the restructuring and the rollout of 3G, but it will take a much longer time to fundamentally change the industry landscape," Zheng said. UBS's Wang said she expected the ultimate market make up to be one where 皇冠体育app Mobile held 60 percent of the market share with 皇冠体育app Unicom taking 30 percent and 皇冠体育app Telecom 10 percent, or where 皇冠体育app Mobile commanded 60 percent of the market, with 皇冠体育app Unicom and 皇冠体育app Telecom each taking 20 percent share. At the moment, however, the pressing task before all three carriers is to convince people like Li to subscribe to 3G services. Only that will see their huge investment in 3G services actually helping to generate revenue and profits. "For the time being, I have no interest in, and imperative to try 3G; voice and text messaging are more than adequate for me," Li, the doctor from Beijing, said. (For more biz stories, please visit Industries)
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