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China Mobile's Flexes 3G Muscles With Huge Jump In Subscriber Additions
China Mobile ( CHL ) announced its operational data for January 2013, adding a staggering 7.05 million net 3G subscribers. This puts it well ahead of competitors China Unicom ( CHU ) with 3.67 million and China Telecom ( CHA ) at 3.01 million. This is the second month in a row where China Mobile has blown away its competition. Net additions of 2G users has continued to remain negative for all the carriers with China Unicom losing 64,000 2G users, China Telecom losing 450,000 and China Mobile losing 2.67 million. We feel going forward this will continue as existing 2G subscribers upgrade to 3G and new subscribers preferring the 3G.
China Telecom and China Unicom Plateaued 3G User Addition
While we were expecting net additions of 2G users to decline and eventually turn negative, it is a matter of concern that net 3G additions for China Unicom and China Telecom have plateaued. The inconclusive talks between the head honchos of China Mobile and Apple ( AAPL ) CEO Tim Cook regarding the iPhone was considered a huge boon for China Unicom and China Telecom. At present these two carriers have exclusive access to iPhone users in China.
We expected China Unicom and China Telecom to benefit from this at the expense of China Mobile. However, the January numbers show that China Mobile has not been affected meaningfully in lacking the iPhone given its strong 3G subscriber additions. We will be watching February subscriber numbers closely to determine if the jump in 3G additions for China Mobile is an anomaly, and if not, it indicates declining prowess of Apple, China Unicom and China Telecom in the 3G market.