Tag Archives: China Telecom

China Telecom latest Business & Financial news from Doug Young, the Expert on Chinese High Tech Market, (former Journalist and Chief editor at Reuters)

News Digest: March 9, 2012 报摘： 2012年3月9日

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The following press releases and media reports about Chinese companies were carried on March 9. To view a full article or story, click on the link next to the headline.

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◙ China Telecom (HKEx: 728) Gets More Than 200,000 Advance Orders for iPhones (Chinese article)

◙ Suntech (NYSE: STP) Reports Q4 and Full Year 2011 Results (PRNewswire)

◙ China’s Developers to Face More Downgrades on Refinancing Risks, S&P Says (English article)

◙ E-House (NYSE: EJ) Reports Q4 and Full Year 2011 Results and Declares Cash Dividend (PRNewswire)

◙ Yaodian100 Bankrupt, Seeks Acquirer – Source (English article)

◙ Latest calendar for Q4 earnings reports (Earnings calendar)

China Mobile Eyes New Nat’l Cable Network 中国移动有望携手中国广播电视网络公司

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After writing far more negative than positive views about China Mobile (HKEx: 941; NYSE: CHL) I’m happy to say there’s finally a piece of news that I really like in the form of talk that the country’s cash-rich but uninspired dominant mobile carrier may soon take a stake in a national cable TV company now being assembled from a patchwork of regional operators. (English article) According to the reports, which cite a number of unnamed sources, China Mobile has already reached an agreement to partner with the new company, China Radio and Television Network, and the 2 sides are now in discussions about a potential equity investment by China Mobile. This kind of partnership looks like a great idea for both sides, as the new cable company will have a huge need for cash — something that China Mobile has plenty of — once the long-delayed consolidation of China’s cable TV networks into this single new company is complete. At the same time, the big piece missing in China Mobile’s portfolio of products is a good wire-based broadband service, something that rivals China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) both have from the wired-line phone networks they inherited years ago from China’s former fixed-line phone monopoly. A big cash infusion from China Mobile could help China Radio and Television Network quickly upgrade its numerous regional cable networks, now mostly based on older analog technology, to digital capabilities for broadband and other services like high-definition television and video on demand. China’s regulators would also be likely to welcome this tie-up, as the entry of a strong new player to the broadband market would provide a real alternative to offerings from Unicom and China Telecom, which are now being investigated by the National Development and Reform Commission, China’s state planner, for monopolistic practices in the area. Investors have long complained that China Mobile — which controls two-thirds of the world’s biggest mobile market — has too much cash and should pay a higher dividend, even though the company has failed to raise its dividend pay-out ratio for years. I have always been skeptical of China Mobile’s overseas acquisition strategy, mostly because it has no experience operating outside its highly protected home market. But this kind of equity tie-up would make much more sense, as it would come in China Mobile’s home market and also be highly complementary to its existing business. Of course such a tie-up isn’t completely risk-free, as the new cable company is an untested entity that still has yet to be formally launched. But if things proceed smoothly, I could see this partnership developing rapidly and perhaps even contributing to China Mobile’s stagnant top and bottom lines as soon as the second half of next year.

Bottom line: A new tie-up between China Mobile and China’s new national cable TV operator looks like a smart move, potentially providing China Mobile with a strong cable and digital TV offering.

Related postings 相关文章:

◙ Govt to Nat’l Cable Firm: Be Profitable 政府对国家广电公司的安排：商业化

◙ Cable Consolidation Moves Closer With New Umbrella Company 中国广播电视网络公司有望近期挂牌 有线网络整合步伐加快

◙ Telecoms Investigation Signals Profit Erosion 电信联通遭反垄断调查或侵蚀利润

China Telecom iPhone Debut Looks Strong 中国电信iPhone初次发售，势头强劲

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China Telecom’s (HKEx: 728; NYSE: CHA) newly launched iPhone 4S has been hogging the headlines these last few days, with everyone scrambling to figure out if the debut of the popular smartphones by China’s third largest telco will be a success. The slew of media reports accompanying China Telecom’s iPhone launch on Friday, when it began taking orders for the 4S, seem to point to a modestly successful beginning. The company has offered a number of plans, each of which is priced about 100 yuan less than comparable ones offered by rival China Unicom (HKEx: 762; NYSE: CHU), the only other Chinese carrier with an Apple (Nasdaq: AAPL) tie-up which began selling the 4S in January. (English article) As to actual demand, media are looking at a number of angles, including online sales, store orders and comments from China Telecom itself to judge demand, as the iPhones themselves won’t become available until this Friday. The company itself is saying first-day sales exceeded its own expectations, though it isn’t giving any figures except to say orders in Beijing exceeded 10,000 units. (Chinese article) Meantime, another article is quoting China Telecom saying first-day online orders were strong, but there was no unusual activity at a China Telecom store also taking orders. On the whole, this looks like a relatively strong launch for China Telecom, which shouldn’t come as a surprise as many iPhone lovers are probably excited to finally have an alternative to Unicom, which had a monopoly on official iPhone sales in China since Apple launched the popular smartphones in 2007. I would expect China Telecom iPhones to see brisk sales when they officially become available on Friday, as consumers test the China Telecom service against Unicom’s. Word of mouth will be critical going forward, as I could easily see many iPhone users migrating to one service or the other in the months and years ahead depending on which telco gets the better reputation for iPhone service. Based on my limited knowledge, I wouldn’t be surprised to see China Telecom emerge as the early leader in the comparisons, in what would obviously be a major setback for an already-struggling Unicom. Meantime, China Mobile (HKEx: 941; NYSE: CHL), China’s only telco with no iPhone deal, is coming out with its own iPhone statistics, with Chairman Wang Jianzhou saying it has 15 million iPhone users. (Chinese article) Of course everyone knows that all of those users are unofficial, since China Mobile has no agreement with Apple, and all can only use their iPhones on China Mobile’s slower 2G network, since no iPhone is available to run on the homegrown technology in its 3G network. China Mobile at one point was talking to Apple about developing a 3G iPhone for its network, but those talks seem to have died a few months ago, meaning the company won’t have its own iPhone deal until 4G which is still at least 1 to 2 years off.

Bottom line: China Telecom is likely to emerge the victor in a looming iPhone war with Unicom by offering both better prices and service.

Related postings 相关文章:

◙ Price War Brewing for iPhone in China iPhone价格战料在中国打响

◙ New Developments, Including iPhone Deal, Heat Up 3G, 4G 中国电信iPhone销售和日益升温的3G、4G最新进展

◙ China Mobile: Improvement Ahead Under New Leaders 新领导有望助中国移动复苏

News Digest: March 3-5, 2012 报摘： 2012年3月3-5日

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The following press releases and media reports about Chinese companies were carried on March 3-5. To view a full article or story, click on the link next to the headline.

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◙ China Mobile (HKEx: 941) Announces Investigation of Suspect Financial Issues (HKEx announcement)

◙ China Telecom (HKEx: 728) Unveils CDMA iPhone 4S Packages (English article)

◙ Alibaba Group Profit At $339 Mln in 2011, Up Seven-Fold (Chinese article)

◙ Masa Maso to Cut Ad Spend 50% in 2012 (English article)

◙ AB-InBev (Brussels: ABI) on Shortlist for China Brewery Deal: Sources (English article)

◙ Latest calendar for Q4 earnings reports (Earnings calendar)

Price War Brewing for iPhone in China iPhone价格战料在中国打响

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I’ll end my postings for this first day of March on a lighter note, looking at an entertaining marketing and price war that looks set to break out between China’s second and third biggest telcos, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA), as the latter prepares to start selling the iPhone 4S later this month, breaking Unicom’s monopoly on iPhone sales in China since Apple (Nasdaq: AAPL) started selling the popular smartphones in 2007. In a highly anticipated announcement, China Telecom, the smallest of China’s 3 major telcos, said last month it would start taking orders for the iPhone 4S on March 2, and start selling the model for use on its network on March 9. (previous post) That development broke Unicom’s 3-year monopoly on iPhone sales in China, just a couple of months after Unicom itself started selling the 4S. Unicom has been rather lazy during the last 3 years during its monopoly period, failing to aggressively market the iPhone even as sales of the smartphones were one of its few bright spots as it suffered with internal management and operational issues. Now that the honeymoon period is finally finished, Chinese media are reporting that Unicom’s Guangdong unit is preparing a “stealth” attack to try to draw more iPhone buyers to its service even as China Telecom gets set to offer its own aggressive packages. (Chinese article) According to the report from a local publication in southern Guangdong province, Unicom’s Guangdong subsidiary is preparing to offer new incentives in the form of extra memory to new iPhone subscribers who are referred by Unicom’s current iPhone customers. I would expect to see similar moves from Unicom subsidiaries in other provinces in the next few weeks, as they attempt to stop China Telecom from stealing both new and existing iPhone customers. China Telecom is likely to fight back with its own aggressive new packages and other incentives, meaning the next few months could be a very good time for anyone considering an iPhone 4S to sign up for service. On a more serious note, this kind of war could undermine both the top and bottom lines for Unicom and China Telecom. It could also seriously hamper efforts by China Mobile (HKEx: 941; NYSE: CHL), the country’s leading mobile carrier, to bring some momentum to its own laggard 3G network, which suffers from a technological disadvantage as it is based on a homegrown Chinese technology standard with numerous problems. In summary, look for a colorful and also bruising price and marketing war between Unicom and China Telecom in the months ahead, playing to the advantage of 3G cellphone subscribers but bringing a new round of potentially destructive competition to the the telcos.

Bottom line: A new price and marketing war will break out as China Telecom prepares to end Unicom’s monopoly on the iPhone in China, resulting in profit erosion for both.

Related postings 相关文章:

◙ New Developments, Including iPhone Deal, Heat Up 3G, 4G 中国电信iPhone销售和日益升温的3G、4G最新进展

◙ China Telecom 3G Drive Set For Boost With iPhone 4S 中国电信3G推出电信版iPhone 4S

◙ China Telcos In New Drives at Home, Abroad 中国三大电信运营商海内外发力

Unicom Trials 4G, ZTE Dusts Off Old Numbers 中国联通试验4G技术 中兴通讯旧账重提

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A couple of items from the telecoms space have caught my attention this overcast Monday in Shanghai, one containing the first news I’ve seen on 4G plans of China Unicom (HKEx: 762; NYSE: CHU), China’s second biggest telco, and the other a silly announcement from telecoms equipment giant ZTE (HKEx: 763; Shenzhen: 000063) that seems designed to divert attention from its rapidly shrinking profits. Let’s look first at Unicom, which finally appears to be thinking about the future as it puts a year of management turmoil behind. A report in the English-language Shanghai Daily cites a Unicom official at a press conference with Shanghai’s mayor saying the company will spend $1.3 billion to upgrade its systems in the city over the next few years. (English article) The list of projects contains many familiar items, such as improving broadband speeds and adding wi-fi hotspots. But the one that caught my attention was that some of the money will go to trialing 4G technology, and that Shanghai has been chosen as one of the first batch of cities where trials will take place. In my view this announcement looks quite significant, because up until now only China Mobile (HKEx: 941; NYSE: CHL), the nation’s largest telco, has moved aggressively to develop 4G, with advanced large-scale trials already taking place in a half dozen major cities. For technological reasons, Unicom and smaller rival China Telecom (HKEx: 728; NYSE: CHA) should require far less time to develop their 4G networks, meaning that if Unicom really starts trialing technology this year it could easily commercialize its 4G network around the same time as China Mobile, perhaps as early as late 2013. If the company can get organized and focus on building its business, which it may finally be doing, it could easily find itself in a strong position when the regulator awards 4G licenses. Moving on quickly to ZTE, the company issued a press release that I can only call silly late last week boasting that it achieved the world’s fastest revenue growth of 33 percent in the first three quarters of last year, according to a new report by market research firm Frost and Sullivan. (company announcement) While obviously it’s nice to be cited as a leader in such a report, the truth is that the first 3 quarters of last year are now nearly half a year in the past, meaning that much may have changed since then. But more importantly, it says nothing about ZTE’s profit, which is shrinking as quickly as revenue is growing as the company pursues a risky strategy of rapidly building up its cellphone manufacturing business by selling low-cost models for little or no profit to quickly build market share. (previous post). I’m not saying that ZTE shouldn’t be proud of its rapid revenue growth, which is coming mostly from its cellphone expansion. But if it’s smart, it will keep a careful eye on its bottom line or risk watching its profit continue to erode and possibly even disappear, wiping out any positive effects of fast-growing revenue.

Bottom line: Unicom’s launch of 4G trials means it could quickly catch up to China Mobile, while ZTE needs to pay equal focus to both its top and bottom lines as it builds up its cellphone business.

Related postings 相关文章:

◙ New Developments, Including iPhone Deal, Heat Up 3G, 4G 中国电信iPhone销售和日益升温的3G、4G最新进展

◙ ZTE Faces More Profit Erosion With Latest Low-Cost Moves 中兴通讯以低价机抢占市场恐损及获利

◙ Baidu, ZTE Earnings: More of the Same 百度和中兴财报：看上去没变化

New Developments, Including iPhone Deal, Heat Up 3G, 4G 中国电信iPhone销售和日益升温的3G、4G最新进展

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There’s a sudden mini-flood of news coming out of the telco space, with new signs that laggards China Mobile (HKEx: 941; NYSE: CHL) and China Unicom (HKEx: 768; NYSE: CHU) are becoming a bit more aggressive in the important 3G and 4G spaces. But as if to counter those signs, China Telecom (HKEx: 728; NYSE: CHA), the smallest of the country’s 3 telcos which also emerged as its most aggressive player last year, has just announced a long-awaited deal with Apple (Nasdaq: AAPL) that will see it start offering popular iPhones on the company’s 3G network early next month. Let’s start with the latest monthly 3G subscriber numbers, which show that Unicom is finally getting serious about that important part of its business, after losing share last year despite its strong technological advantages. The latest figures show Unicom had just over 32 million subscribers at the end of January, boosting its share of the market to 32 percent from 31 percent just a couple of months earlier. (company announcement) That gain is important, as it reverses a trend that saw Unicom’s share either stagnating or actually dropping lasts year as it suffered from management turmoil and shortages of handsets for its 3G network. It seems to have solved the handset problem for now, meaning we could see more market share gains in 2012, though lingering management issues could continue to hamper the company. Meantime, local media are reporting the telecoms regulator has official declared the commencement of second stage trials for TD-LTE, the 4G standard being developed by China Mobile. (English article) This announcement looks important since it affirms the regulator, after some initial hesitation early last year, is now fully supporting China Mobile’s plans to roll out a commercial 4G network as soon as next year, even though China Mobile itself has recently run into delays in its own trials for the technology. (previous post) Perhaps sensing that its 2 rivals were stealing some of its momentum, China Telecom has just come out with its own announcement, which has been rumored for months, that it will start to take orders for the popular iPhone 4S for use on its network starting on March 2, and start offering service for the handsets a week later. (company announcement) While highly anticipated, this deal is still big news for both China Telecom and the China market overall, as it formally ends a monopoly on iPhone sales in China held by Unicom since the launch of the popular Apple smartphones several years ago. China Telecom looks set to aggressively market the iPhone for its 3G network, which will hit profits in the short-term but could help it regain some of the momentum in the space it has recently lost to both Unicom and, to a lesser extent, to China Mobile.

Bottom line: China Unicom’s aggressive 3G push is yielding results with new share gains, but China Telecom could soon fight back with its newly announced iPhone deal.

Related postings 相关文章:

◙ China Mobile Bets on Call Centers, Sees 4G Delay 中移动4G网络建设延期 押注新建呼叫中心

◙ Unicom, China Telecom in iPhone 4S 中国电信有望领先推出iPhone 4S Race

◙ TD-LTE Hits First Delay, More to Come? TD-LTE技术首次延期 未来还会更多？

Spreadtrum, Samsung in Latest China 3G Model 展讯与三星再度联手开发中国标准3G智能手机

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After surviving a short seller attack last year, cellphone chip maker Spreadtrum (Nasdaq: SPRD) has taken the latest step in its drive to become a specialist in smartphone chips for use with China’s homegrown 3G standard, TD-SCDMA, by co-developing a second model with global giant Samsung (Seoul: 005930). (company announcement) Samsung’s roll-out of the Galaxy Note GT-I9228, using a Spreadtrum TD-SCDMA chip, is the Korean company’s second such model since last September, and signals the companies are forming a strong partnership for phones based on the 3G standard being used by China Mobile (HKEx: 941; NYSE: CHL). Now, of course, the big question will be whether China Mobile will start to promote TD-SCDMA service more aggressively, following a disappointing 2011 that saw it lose steady share in the 3G market to rivals China Unicom (HKEx: 728; NYSE: CHU) and especially China Telecom (HKEx: 728; NYSE: CHA). Spreadtrum shares have gone on a roller coaster ride over the last year, partly due to the inherent risk of investing so much in a technology with no track record and one that could ultimately see only lukewarm sales. Its share plunged in July after a short seller attack questioning an inventory buildup as the company broadened its product line as part of its TD-SCDMA bet. It ultimately survived that attack and its shares more than doubled from their lows at that time. But since November its shares have again lost about half of their value, due at least in part to disappointment about China Mobile’s lackluster promotion of 3G. Of course, part of the problem for China Mobile has been a lack of exciting smartphone models to run on its 3G network, so the introduction of 2 Samsung TD-SCDMA models should help address that problem. China Mobile has also sent out its own recent signals indicating it will make a stronger push in 3G this year under new management, though we have yet to see much real results of that. (previous post) If you’re a Spreadtrum investor, you’re most likely going to be closely watching China Mobile’s 3G subscriber numbers closely this year, as the chip maker’s stock price is likely to move in step with how quickly the network develops.

Bottom line: Spreadtrum’s latest tie-up with Samsung affirms its commitment to TD-SCDMA 3G standard, putting it at the mercy of China Mobile’s promotion of the untested technology.

Related postings 相关文章:

◙ China Mobile 3G: Where Are the Subscribers? 中国移动3G：订户在哪里？

◙ Spreadtrum, Mediatek in Cheap Smartphone Plays

◙ Spreadtrum Takes Smart Gamble on China 3G

News Digest: February 1, 2012 报摘： 2012年2月1日

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The following press releases and media reports about Chinese companies were carried on February 1. To view a full article or story, click on the link next to the headline.

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◙ Citron Continues Qihoo 360 (NYSE: QIHU) Attack, Qihoo Says Won’t Engage Verbal War (Chinese article)

◙ New Internet Map Rules to Take Effect, Google (Nasdaq: GOOG) Still Awaiting Approval (Chinese article)

◙ Lawmakers Press Obama on China Auto Parts (English article)

◙ China Telecom (HKEx: 728) Reportedly to Establish Cloud Computing Subsidiary (English article)

◙ 55tuan Says IPO Moving Ahead on Schedule, No Plans to Change Underwriter (Chinese article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

China Telecom 3G Drive Set For Boost With iPhone 4S 中国电信3G推出电信版iPhone 4S

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It’s not exactly news at this point, but Chinese media are reporting that China Telecom (HKEx: 728; NYSE: CHA), the most aggressive of China’s 3 mobile carriers in the 3G space, has finally reached a deal to begin selling Apple’s (Nasdaq: AAPL) iPhone 4S on its network, with sales likely to begin sometime in the first quarter, possibly as soon as February. (English article; Chinese article) Talks for this deal have been going on for months and reported frequently in the media, and the debut would be at least a month behind the official iPhone 4S launch in China by one of the nation’s other carriers, China Unicom (HKEx: 762; NYSE: CHU) earlier this month. Still, the latest news was apparently enough to spook investors, with Unicom stock shedding 5 percent in Monday in Hong Kong trade and falling even more in overnight trade in New York. Apple’s iPhones are extremely popular in China, and security concerns over long lines at one Beijing Apple store actually led it to cancel its plans to sell the phone there earlier this month, resulting in some mild skirmishes. (previous post) That fact, combined with China Telecom’s generally aggressive approach to 3G, clearly has investors excited that China’s smallest mobile carrier will be able to further boost its momentum in the 3G space to take even more market share from Unicom and China Mobile (HKEx: 941; NYSE: CHL), the nation’s largest mobile carrier. China Telecom saw its share of China’s 3G market zoom to 28 percent by the end of 2011 from just 19 percent when the year began, as it took advantage of inferior technology at China Mobile and management missteps at Unicom to steal share from both of its rivals. The gains have brought China Telecom to within spitting distance of Unicom, whose 3G market share now stands at about 30 percent. If the iPhone deal finally does happen, which looks likely, and a launch occurs in February or March, I wouldn’t be at all surprised to see  China Telecom’s 3G share pass Unicom’s by the middle of the year, making China Telecom the company to watch in 2012.

Bottom line: China Telecom’s imminent launch of the iPhone 4S on its 3G network could help to propel it past Unicom to become China’s second biggest 3G carrier by the middle of this year.

Related postings 相关文章:

◙ Google, Apple OS Rivalry Intensifies 苹果与谷歌在华智能手机战白热化

◙ China Telcos In New Drives at Home, Abroad 中国三大电信运营商海内外发力

◙ 2011: China Unicom’s Lost Year 中国联通失落的一年

News Digest: January 31, 2012

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The following press releases and media reports about Chinese companies were carried on January 31. To view a full article or story, click on the link next to the headline.

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◙ China Telecom (HKEx: 728), Apple (Nasdaq: AAPL) Reach iPhone 4S Deal – Source (English article)

◙ Yingli (NYSE: YGE) To Supply IBC With Up to 200 MW of PV Modules in 2012 (PRNewswire)

◙ Groupon.cn Staff Put on Extended Leave, Vendors Prepare to Sue (Chinese article)

◙ Apple (Nasdaq: AAPL) Appeals iPad Trademark Lawsuit (English article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)