China Mobile Tie-Ups: Apple Near, Cable Far 中国移动可能很快与苹果合作 推出固网宽带业务尚需时日
Just a day after I wrote about the latest mixed signals coming from China Mobile (HKEx: 941; NYSE: CHL), we’re getting still more mixed messages from China’s largest wireless telco, including an exciting one that indicates a highly anticipated new tie-up with Apple (Nasdaq: AAPL) could come soon. While the Apple tie-up would be highly welcome, another unrelated development appears to indicate that a deal that would have seen China Mobile link up with China’s new national cable TV operator may fail to materialize.
Unlike the mixed signals that I wrote about yesterday that involved strategic decisions by China Mobile itself (previous post), these latest 2 developments both involve issues that are largely out of the company’s control.
In the first of those, and perhaps the most exciting, media are reporting that US telecoms chip giant Qualcomm (Nasdaq: QCOM) is preparing to launch a high-performance smartphone chip that can operate on the 3G wireless standard used by China Mobile, called TD-SCDMA. (English article) The reports cite a Qualcomm official saying the company will release its TD-SCDMA chips as soon as September.
That’s a huge development for China Mobile, which has seen its 3G market share erode steadily in the last 2 years, partly due to a lack of high-performance smartphones that can operate on its TD-SCDMA network. These new chips will pave the way for the introduction of a new generation of high-performance TD-SCDMA smartphones, including a TD-SCDMA edition of Apple’s popular iPhone.
China Mobile is the only one of China’s 3 major telcos that doesn’t offer an iPhone for its network, but disclosed more than a year ago that it was talking with Apple about developing such a phone. Both companies have remained largely silent on the issue since then, until media reported in June that the main obstacle in the talks was Qualcomm, which needed to develop a suitable chip before Apple could make its TD-SCDMA iPhone. (previous post)
So this new disclosure that Qualcomm will launch a TD-SCDMA chip soon means we could finally see a China Mobile iPhone as soon as the end of this year, providing a huge lift for the company’s struggling 3G network in 2013.
While the iPhone development is certainly good news, the other development looks less promising as Chinese media report the Finance Ministry is preparing to provide billions of yuan in funding for the country’s newly formed national cable TV operator. (Chinese article) That news appears to indicate that Beijing won’t allow China Mobile to form its own tie-up with the new cable operator, since such a tie-up probably would have involved a multibillion-yuan investment by China Mobile, making a big cash infusion from Beijing unnecessary.
China Mobile had reportedly been seeking the tie-up to give it access to the national fixed-line network that the new cable company will own and operate. (previous post) Such access would have allowed China Mobile to offer fixed-line broadband service, letting it compete in the lucrative space with dominant providers China Unicom (NYSE: CHU; HKEx: 762) and China Telecom (HKEx: 728; NYSE: CHA). So for now, at least, it looks like China Mobile will have to be satisfied with a new Apple iPhone, but may have to wait a bit longer to enter the fixed-line broadband business.
Bottom line: New developments indicate China Mobile may be able to offer an iPhone for its 3G network by year-end, while its hopes to enter the fixed-line broadband business may have to wait.
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