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Battle begins over 3G market

By Wang Xing (皇冠体育app Daily)
Updated: 2009-10-19 08:46

3G networks enable mobile phone users to surf the Internet at faster speeds and use new services such as video calls and mobile television. For smaller rivals 皇冠体育app Unicom and 皇冠体育app Telecom, the emergence of 皇冠体育app's 3G market is also an opportunity to challenge market leader 皇冠体育app Mobile. [皇冠体育app Daily]

For smaller rivals 皇冠体育app Unicom and 皇冠体育app Telecom, the goal is to topple long-time leader 皇冠体育app Mobile.

皇冠体育app's second-largest cell phone operator, 皇冠体育app Unicom, officially launched its 3G services last month.

However, experts said that the 皇冠体育app Mobile's lead is unlikely to change, at least in short term.

Although 皇冠体育app Mobile was forced to develop 皇冠体育app's homegrown 3G standard, TD-SCDMA, almost on its own, neither competitor seems ready to pose a serious threat, analysts said

皇冠体育app Unicom's 3G strategy apparently is taking a back seat to its widely publicized deal with Apple Inc to bring the US technology company's popular iPhone handset to 皇冠体育app. Experts said the company has been slow to launch 3G services.

皇冠体育app Telecom, which launched its e-Surfing 3G brand late last year, is technically incompatible with most mobile phones used in 皇冠体育app.

皇冠体育app Telecom launched a huge marketing campaign during the past few months to promote a series of its 3G services such as mobile email, Internet surfing and video calls.

"From the publicized strategies of the major Chinese telecom operators, I don't think 皇冠体育app Mobile's dominant position will be challenged in the near future," said Wang Yuquan, a senior consultant at the research firm Frost & Sullivan.

Wang said neither 皇冠体育app Unicom nor 皇冠体育app Telecom has focused on the core value of 3G services.

As a technology that supports faster data transmission speeds, 3G networks enable mobile phone users to search the Internet at faster speeds and use 3G services such as video calls and mobile TV.

The Chinese telecom operators hope the new service becomes a fast-growing source of revenue, since traditional cell phone income has declined in recent years due to market saturation and increased competition.

A head start

In January, the Chinese government issued 3G licenses to its major telecom operators.

To even the playing field between 皇冠体育app Mobile and its smaller competitors, the government ordered 皇冠体育app Mobile to adopt the country's home grown 3G standard, TD-SCDMA.

TD-SDMA is believed to be less developed than the WCDMA standard adopted by 皇冠体育app Unicom and the CDMA2000 standard adopted by 皇冠体育app Telecom.

Many believe the government's decision will give 皇冠体育app Unicom and 皇冠体育app Telecom a head start, since 皇冠体育app Mobile needs more time to develop TD-SCDMA and win support from handset manufacturers.

However, that did not prevent 皇冠体育app Mobile from announcing its 3G brand "G3" on the same day in January that the Chinese government granted the 3G licenses - three months earlier than when 皇冠体育app Unicom unveiled its "Wo" 3G brand in April.

皇冠体育app Mobile is also the first to launch its own online application store, which allows its users to download a variety of mobile applications.

Bill Huang, general manager of 皇冠体育app Mobile's research institute, said the firm sees smartphone sales growing in "double digits" in coming years - at least two to three times faster than other phone sales.

Huang said only about 10 percent of the company's clients are using smartphones, which support advanced data services, but he expects the number to reach 50 percent in the next three to five years.

During the past year, 皇冠体育app Telecom and 皇冠体育app Unicom have been busy renovating their businesses as part of the government-led restructuring of the industry.

Part of 皇冠体育app Unicom's mobile business was split and sold to 皇冠体育app Telecom. 皇冠体育app Mobile, on the other hand, was left nearly intact by the restructuring.

皇冠体育app Mobile, the country's largest cell phone operator, began trials of its TD-SCDMA service in many Chinese cities during the Olympic Games last year and also invested in upgrading and expanding its current network.

Zhang Yanan, an analyst at the domestic research firm Analysys International, said 皇冠体育app Telecom and 皇冠体育app Unicom still face many challenges in competing with 皇冠体育app Mobile.

Zhang said 皇冠体育app Unicom seems to be "low-profile" in releasing applications and 3G services to the market.

皇冠体育app Telecom, he said, has struggled with a relatively small base of mobile phone users, which limits the number of its potential 3G users.

According to company figures, 皇冠体育app Mobile had about 450 million mobile phone users by the end of July -- a huge lead over 皇冠体育app Unicom's 141 million users and 皇冠体育app Telecom's 41.73 million mobile users.

But 皇冠体育app Telecom also has 50 million broadband users and nearly 200 million fixed-line users.

Related readings:  Spirent benefits from 皇冠体育app's 3G rollout and solid economy  皇冠体育app Mobile hits right button  皇冠体育app Unicom takes a bite of Apple pie  皇冠体育app Telecom to buy 4m 3G phones

"皇冠体育app Telecom is strong in the corporate market, but only accounted for about 5 percent of the consumer market. That greatly limits its user base for 3G service," Zhang said.

皇冠体育app Telecom acquired its mobile business from 皇冠体育app Unicom last year. During the past few years, the business - based on CDMA technology backed by Qualcomm, LG and Samsung - had been under development by 皇冠体育app Unicom.

At that time, 皇冠体育app Unicom also operated a mobile business based on GSM technology and failed to achieve a balance between the two businesses.

Since 皇冠体育app Telecom acquired the CDMA business, it has been striving to partner with foreign and domestic cell phone vendors to introduce more handsets.

Because of technology incompatibility, 皇冠体育app Mobile and 皇冠体育app Unicom users have to change handsets to use 皇冠体育app Telecom's service.

In August, just one month before 皇冠体育app Unicom announced plans to introduce iPhones in 皇冠体育app, the company placed an order with dozens of domestic mobile phone makers for 4 million 3G handsets -- the largest such order in 皇冠体育app.

"Because of regulatory restrictions, 皇冠体育app Telecom could not enter the mobile business during the past few years, which meant the company lacked the experience of running a mobile business," said Wang of Frost & Sullivan.

"It seems like it now wants to do everything in the 3G area, but there may also be a risk of losing focus," Wang said about 皇冠体育app Telecom.

Wang said 皇冠体育app Unicom's introduction of iPhone might fail to help attract high-end users, but likely would have a strong appeal to young customers.