There's A Race On For 3G Subscribers In China

The increasingly tight competition for 3G subscribers in China a sign of how smartphones are shaking up this market.

App-centered modern smartphones drive data consumption and demand for faster network technologies like 3G and 4G.

Overall, Chinese mobile subscriptions reached 1.2 billion in July — that’s about 14% of global mobile subscriptions. Just over a third of China’s mobile subscribers are on 3G.

China’s dominant carrier and the world’s largest, China Mobile, has a 43% share of the Chinese 3G subscriber market, and it’s adding 3G users at a faster rate than its two main rivals. But it lags its competitors in one respect: the percentage of its subscriber base on 3G.

3G subscribers accounted for only 20% of China Mobile’s total subscriptions in July. They accounted for 39% of China Unicom’s subscriptions, and 51% of China Telecom’s.

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China Mobile faces some obstacles in the 3G race. Its 3G network operates on a standard that is widely held to be inferior to the one used by China Unicom and China Telecom.

Also, a disproportionately large percentage of China Mobile’s customers may be unable or unwilling to pay for 3G service. Over the past decade the company has aggressively expanded into poor, rural areas. In recent years, as many as half of new China Mobile subscriptions came from these areas.

China Mobile is responsible for the majority of overall mobile subscriptions among the big three Chinese carriers, at 63%. Its 745 million subscribers means that it dwarfs its closest domestic competitor, China Unicom, by a margin of 479 million subscribers.

China Mobile will be under the magnifying glass in the coming weeks and months as mobile analysts await news of an expected iPhone distribution deal with Apple. Despite the fact that China Mobile does not support iPhones on 3G or offer them at its retail outlets, 6% of China Mobile subscribers use iPhones.

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