Following signs earlier this year that they were resisting a call to end to domestic roaming fees, China’s big 3 wireless carriers are finally reversing course and bowing to pressure from the telecoms regulator to follow a practice already common in much of the world. But leading telco China Mobile (HKEx: 941; NYSE: CHL) is taking its time making the transition, saying it will gradually phase out such fees over the next 2 years. Smaller rival China Telecom (HKEx: 728; NYSE: CHA) appears to be moving more quickly, while the perpetually befuddled China Unicom (HKEx: 762; NYSE: CHU) has yet to state its policy on the issue. Read Full Post…
Bottom line: China Mobile’s strong profit growth shows the company has executed well on its 4G strategy, including strong promotion of data services that have rapidly become its single largest revenue source.
China Mobile notches strong Q2 profit growth
After a bumpy period over the last 2 years as it rolled out its new 4G network, leading wireless carrier China Mobile (HKEx: 941; NYSE: CHL) is finally reaping strong results from its efforts with some of the best profit growth I’ve seen in a long time. The company has just reported its interim results, which show that its profit jumped an impressive 9.2 percent in the second quarter, as it took advantage of its early entry to 4G to consolidate its place as the nation’s leading telco. Read Full Post…
Bottom line: Qualcomm’s new licensing deal with Oppo extends a recent upbeat trend for the company in China after a yearlong retrenchment, and will be followed by more similar deals through the rest of this year.
Qualcomm in licensing deal with Oppo
Following a difficult year in China that saw it fined a record amount for anti-competitive behavior, global telecoms chip leader Qualcomm (Nasdaq: QCOM) appears to be slowing regaining its footing in the world’s largest smartphone market. That’s my interpretation of the latest headline, which has the company announcing a new chip licensing deal with Oppo, one of the market’s fastest growing smartphone makers. Word of this latest deal almost certainly came from Qualcomm itself, which is eager to show its days of trouble in China are in the past. Read Full Post…
Bottom line: Huawei’s eroding profit margins and slowing smartphone sales growth reflect stresses being felt both at home and abroad in an overheated industry showing rapid signs of global saturation.
Huawei announces H1 results
The latest financial results from Huawei are showing how smartphones are at once becoming a growth engine but also a drag on the telecoms giant. The company’s fast-growing smartphone business was one of the main engines behind a 40 percent surge in sales during the first half of this year, as Huawei consolidated its position as the world’s third largest brand behind only Samsung (Seoul: 005930) and Apple(Nasdaq: AAPL). But at the same time, fierce competition in the sector also sharply eroded Huawei’s profit margins. Read Full Post…
Bottom line: The appearance of JD.com as China’s first Internet company in the Fortune 500 and exclusion of the nation’s 3 biggest players underscores major shortcomings of the list due to its reliance on revenue as the basis for its rankings.
JD.com lands in Fortune 500
Everyone is buzzing these last few days about the latest edition of the Fortune 500, including the rising presence of China on the list of the world’s largest companies by revenue. But as a China tech watcher, the fact that most caught my attention was the absence of China’s top 3 Internet companies from the list, namely Tencent(HKEx: 700), Alibaba (NYSE: BABA) and Baidu (Nasdaq: BIDU). Adding to the puzzle was the appearance of Alibaba’s much smaller e-commerce rival JD.com (Nasdaq: JD), which became the first Chinese Internet company to make the Fortune 500 list. Read Full Post…
Bottom line: China Telecom’s cancellation of roaming fees and focus on the Internet of Things signal it wants to become a leader and aggressively roll out new services under its new chairman Yang Jie.
China Telecom to end roaming fees
Just days after receiving a vote of confidence by a major global investor, China’s smallest mobile carrier China Telecom(HKEx: 728; NYSE: CHL) is showing new signs of life that make it look a potential company to watch among the nation’s stodgy big 3 teclos. Those signs are coming in one of the first major speeches from China Telecom’s new chief, who says the telco will become China’s first to eliminate domestic roaming fees, a move that was long overdue but has been strongly resisted by the sector. At the same time, Yang Jie is saying China Telecom will place strong emphasis on Internet of Things services, which many believe are the wave of the future. Read Full Post…
Bottom line: Ericsson’s new tie-up with Inspur looks like a savvy move to gain a foothold in the nation’s fast-growing market to supply infrastructure to power Internet-related products and services.
Ericsson ties up with Inspur
Chinese IT services firm Inspur has just scored a major new partnership, with word that it’s forming a new tie-up to offer cloud and other Internet-based services with global telecoms equipment leader Ericsson. (Stockholm: ERICb). The new tie-up adds to a growing stable of similar alliances between Inspur and big-name foreign partners, following previous tie-ups with IBM (NYSE: IBM) and Cisco (Nasdaq: CSCO).
We should begin by pointing out that this kind of tie-up isn’t that uncommon for big foreign high-tech names, since Beijing often prefers that such companies form joint ventures for doing business in the vast Chinese market. That drive for tie-ups has accelerated over the last year, following Beijing’s roll-out of a new national security law that requires foreign high-tech product makers to work with Chinese partners when selling to the government or big state-owned companies. Read Full Post…
Bottom line: GIC’s investment in China Telecom represents a vote of confidence in the company over the next 2 years, as it makes strong gains in 4G and data services and could become more aggressive under new leadership.
GIC bets on China Telecom
China’s smallest wireless carrier China Telecom(HKEx: 728; NYSE: CHA) has just received a vote of confidence from one of the world’s better-known global investors, with the new disclosure that Singaporean sovereign wealth fund GIC has purchased 5 percent of the telco’s Hong Kong-listed shares. That decision comes amid mixed signals coming from China Telecom, which has just received new leadership after its former chairman was booted out for corruption. On a more positive note, China Telecom has been posting strong growth in its year-old 4G business, though the foundation for that growth was largely laid by yet another previous leader who left the company about a year ago. Read Full Post…
Bottom line: Huawei’s aggressive H2 targets for its Honor sub-brand hint that sales for its core Huawei smartphones may be stumbling, while rumors of a wave of executive departures at Smartisan also hint at dire financial conditions at the company.
Huawei calls on Honor to boost smartphone sales
New distress signals are coming from China’s overheated smartphone sector in the form of headlines involving leader Huawei and smaller niche player Smartisan. Before I detail the headlines, I should note that some may disagree with my interpretation, since neither news item directly confirms any trouble. But that said, nobody ever wants to admit to bad news, and in both cases the headlines appear to confirm earlier signs of stress at each company. Read Full Post…
Bottom line: Telefonica is likely to finalize its divorce with Unicom in the next 2 years, following the latest halving of its holdings in its Chinese partner to 1 percent as part of a sell-down of non-core assets.
Telefonica dumps more Unicom shares
For some reason that’s not completely clear to me, Spanish telco Telefonica (Madrid: TELF) doesn’t want to admit that its decade-long marriage with China Unicom (HKEx: 763; NYSE: CHU) was a dud and is headed for divorce. That’s my latest assessment, following reports that the Spanish carrier has further sold down its stake in its Chinese partner, leaving it with a miniscule 1 percent of Unicom’s shares. This particular sale was probably driven mostly by a need for cash. But I really don’t understand why Telefonica didn’t just completely dump the rest of its shares and finally end this marriage that never produced anything useful for either side. Read Full Post…
Bottom line: Huawei’s new lawsuits against Samsung in China and T-Mobile in the US are designed to show the company is now a major global player, and could also be preemptive to deflect attention from upcoming bad news.
Huawei files new suits against Samsung, T-Mobile
China’s latest smartphones superstar Huawei is suddenly getting quite aggressive in the courtroom, with word the company has filed new lawsuits against global leader Samsung (Seoul: 005930) and US wireless carrier T-Mobile (Nasdsaq: TMUS). Those reports are coming as new data show that Huawei boosted its position as China’s leading smartphone brand with 17.3 percent of the market in the second quarter. (English article) Huawei’s sales surge continues an ongoing trend, though the sudden courtroom aggression is relatively new for the company, which was more used to getting sued in the past than suing other companies over patent violations. Read Full Post…
