China Mobile and China Telecom are gearing up for the next level of 4G network roll outs in the country. Bharti Airtel, Reliance Jio Infocomm, Vodafone and Idea Cellular can learn from their Chinese counterparts.
Internet+ strategy drafted by the China government is one of the growth drivers for the 4G LTE boom. The aim is to promote the integration of mobile Internet, Big Data, Cloud Computing and Internet of Things (IoT) with modern manufacture to achieve industrial upgrading and updating. Similarly, India has formulated Digital India concept.
There is a huge difference between the Capex of Indian and Chinese mobile service providers.
The Capex (capital expenditure) of China Mobile in the first half of 2015 was RMB 69.7 billion or $10.88 billion, representing 23.3 percent of revenue from telecom services.
China Telecom has made an investment of RMB 36.68 million $5.73 billion towards Capex in the first half of 2015. China Telecom Capex for 4G alone was RMB 17.8 billion or $2.8 billion. In addition, the company has invested RMB 12.4 billion or $1.94 billion in Broadband and Internet.
For comparison, Reliance Jio Infocomm, the Mukesh Ambani-promoted 4G telecom subsidiary of RIL, has invested $15 billion till now. Bharti Airtel will be spending around $9 billion or Rs 60,000 crore in the next three years to focus on quality networks and services. Idea Cellular, Vodafone India, BSNL, Reliance Communications and Tata Docomo are yet to make any announcements related to fresh Capex plans.
China Mobile 4G network strategies
China Mobile added 10.56 million customers in the first half of 2015 and its total subscriber base stands at 810 million.
China Mobile has added 99.6 million 4G customers in the first half and total LTE user base stands at 190 million, accounting for 23 percent of its total customers. Its 4G international roaming services are available in 82 countries and regions.
The telecom network operator is focusing on the migration of customers from 2G and 3G networks to 4G networks. Indian telecom Bharti Airtel is not looking at a migration of its 3G subscribers to 4G, though it is offering competitive 4G rates as compared with 3G.
“We accelerated the construction of internet infrastructure to increase the internet access speed, and the mobile phone on-net hits rate reached 84.8 percent,” said China Mobile Chairman Xi Guohua in an analyst meeting after announcing the first half earnings.
China Mobile has made investment in infrastructure network capabilities, focusing on the accumulation and construction of infrastructure resources including transmission networks, public Internet and IDC.
China Mobile’s mobile data traffic increased 154 percent in H1. China Mobile’s 4G mobile data traffic increased to 62 percent of the total data traffic.
Data business revenue of China Mobile rose 24.3 percent to RMB 151.5 billion or $23.6 billion – fuelled by 4G deployments. Revenue from wireless data traffic grew 40.1 percent to RMB 100.9 billion or $15.76 billion.
Data business of China Mobile contributes 50.6 percent of telecom service revenue. China Mobile’s total revenue in H1 was RMB 340.7 million (+4.9 percent) or $53.22 billion and out of this, telecom service revenue was RMB 299.5 billion (+0.5 percent) to $46.8 billion.
The number of China Mobile 4G base stations reached 940,000 in the first half of 2015. The company sold 140 million 4G handsets through all distribution channels. Reliance Jio Infocomm is following a similar device strategy.
China Mobile has launched the VoLTE-supported smartphones A1 and N1 featuring five modes and eleven frequencies priced at around RMB 1,000. It has set up China Mobile Innovation Industry Fund to promote industrial innovation.
China Telecom 4G
China Telecom says tower sharing effectively alleviates prime sites shortage, driving fast 4G network roll outs.
The mobile service provider has set up 320,000 4G stations in H1. China Telecom is targeting to set up 510,000 4G base stations in 2015.
China Telecom has added 18.18 million 3G / 4G subscribers in the first half. The number of 3G / 4G subscriber base of China Telecom reached 137 million. Its total subscriber base grew by 8.72 million to 194 million.
China Telecom’s 4G ARPU reached RMB 86 against mobile ARPU of RMB 55.1. The company’s 3G/ 4G handset subscriber’s average monthly data traffic rose 76.7 percent to 212 KTB.
China Telecom aims to construct the largest 8+2+X Cloud resources deployment in China with over 100,000 cabinets in operation. It will be making investment in Cloud computing and Big Data service capabilities.
Comparing with Indian telecoms, China has moved ahead in 4G network expansion. Both China Mobile and China Telecom are not focusing on 3G and consider 4G as the lifeline.
Baburajan K
editor@telecomlead.com
