Now that all the major telecommunications firms have released
their June Chinese 3G subscriber numbers, investors are afforded a
peak into the state of the world's largest mobile phone market.
[caption id="attachment_60224" align="alignright" width="300"
caption="Chinese 3G continues to grow, but is CHL being left
behind?"]
[/caption]
Although the prospects for rest of the world are looking
increasingly dim, because of an increase in Chinese 3G
subscriptions, the telecom sector appears to be a place where
investors can ride out the rest of the storm.
For the month of June, Chinese telecoms added an impressive
11.82 million new subscribers
. In terms of gross sums, this puts the total number of Chinese
mobile phone users at 1.05 billion, a 0.9% increase
month-over-month, and the fourth month in a row where the country
has had more than a billion mobile subscribers.
More importantly, there has been a dramatic increase in Chinese
3G subscriptions. As of June, there were 176 million Chinese 3G
subscriptions, a 118% increase year-over-year. This is an important
indicator of profitability for the three major Chinese telecom
outfits of China Mobile (
CHL
,
quote
), China Telecom (
CHA
,
quote
), and China Unicom (
CHU
,
quote
), as 3G services are particularly lucrative.
Delving into the numbers of individual firms produces even more
interesting insights. The largest mobile operator, China Mobile,
actually lost share in the Chinese 3G segment. Incredibly, China
Unicom, which has only a fraction of the subscriber base that China
Mobile has, signed up the most subscribers of any of the big three
firms. China Unicom locked in 17.5 million new 3G subscribers,
while China Mobile and China Telecom signed up 15.87 and 14.67
million new 3G users, respectively.
While Businessweek notes that China Unicom's substantial
increase may be
a product of enhanced advertising and promotions
during this time period, others are
extrapolating another hypothesis
from these numbers.
Brian White of Topeka Capital thinks that China Unicom and China
Telecom's proportionally better numbers than China Mobile's
reflects the fact that the two former carriers have the iPhone,
whereas China Mobile does not. With Apple (
AAPL
,
quote
) releasing their quarterly numbers this afternoon, investors will
be able to see if iPhone growth continues to surge in Mainland
China, or if mobile phone users are
waiting for the increased Chinese functionality of the iPhone
5
.
