China could see over 580 million mobile subscribers by 2010 - report

April 12, 2005

The latest study, "The China Mobile Market" published by business information providers, visiongain, investigates the high growth of mobile and Internet users in China, which began in the second half of 1990s. Since then, the mobile market in China has become fiercer, with competition amongst mobile operators to control the entire value chain from contents and application through to terminals.

With a huge potential subscriber base, China's Internet and mobile markets still have a low and moderate penetration level respectively in comparison to other leading world markets. New regulation has created four mobile operators: China Mobile, China Unicom, China Telecom and China Netcom, with mobile communication services accelerating in the mainland and mobile user figures reaching 334 million in 2004.

"China's mobile subscribers will grow to 386 million subscribers by the end of 2005, rising to 580 million by the end of 2010", comments Nidhir Maudgalya, visiongain's Telecommunications analyst.

With a penetration rate of 25.7%, the mobile market in China is far from saturation levels. However, mobile operators in the mainland are faced with decreasing ARPU rates. Their approach to develop policies to address this issue, analysed in this report, is likely to result in consistent profit growth in China in future.

All possible aspects related to technology standards, in the event of launch of 3G services in the country, have been analysed including visiongain's predictions related to the much-anticipated third generation service. The report provides in depth analysis and predictions on the three possible standards likely to be deployed for 3G-service delivery in China.

Visiongain believes that if mobile operators and handset vendors play their cards right with respect to pricing, marketing and distribution strategies, especially in targeting the niche market areas and nascent consumer market, China could see over 580 million mobile subscribers by 2010, with a significant proportion using 3G enabled handsets.

The study establishes the potential China has to offer as a handset manufacturing hub and the significance of mobile data services in the consumer and business markets. The role of foreign and domestic handset vendors in China, highlights of key strategies, which they could employ, to better compete with each other, is also included.

Critical issues such as take off of 3G services, performance of GSM1x networks and international participation will bear significant impact on the performance of mobile companies operating in China.

www.visiongain.com