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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)
The following press releases and media reports about Chinese companies were carried on October 29. To view a full article or story, click on the link next to the headline.
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Mobile Restaurant Queuing App ‘Delicious No Wait‘ Wins $100 Mln Series C (English article)
Bottom line: New signals that China’s 3 telcos are reducing their spending could presage a rumored consolidation of the trio into 2, with China Telecom and Unicom the most likely to be merged.
China telcos rope in spending
The latest sign of a potential shake-up in China’s stodgy telecoms sector came late last week, when global networking equipment giant Ericsson (Nasdaq: ERIC) attributed reorganization and weak spending by the nation’s big 3 carriers as a major factor behind its disappointing quarterly results. Despite expectation that China’s big 3 carriers would spend heavily on 4G this year, actual amounts so far have been relatively modest from the trio of China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA).
The unexpected spending slowdown could be the latest sign that Beijing is planning an industry overhaul, following reports that first emerged last month of a possible consolidation of the 3 current mobile carriers into just 2. Such a move would reflect Beijing’s disappointment at the failure of China’s state-run carriers to become global innovators over the last decade, even after receiving monopoly rights over a market that has become the world’s largest for mobile and broadband services. Read Full Post…
Bottom line: Huawei’s ongoing surge should help to consolidate its position as China’s leading domestic smartphone brand, while a newly formed cell tower operator will relieve China’s 3 telcos of the burden of owning and operating such assets.
New cell tower operator takes shape
The telecoms space is buzzing on both the operator and consumer products sides, with surging smartphone maker Huawei and a new cell tower operator called China Tower both rising in the latest headlines. The higher profile of these 2 telecoms headlines has Huawei continuing its rise to become the world’s third largest smartphone brand, stealing the title from the fading Xiaomi. Meantime, all 3 of China’s big state-run telcos have come out with one of their simultaneous announcements saying they have formally transferred their cell tower assets to China Tower.
This pair of stories is quite different, but the bigger picture is one of trying to improve by becoming more efficient and diverse. In the case of Huawei the company is trying to leverage its long experience in making telecoms equipment to diversify into the consumer-oriented smartphone space. In the second case, China’s telecoms regulator is trying to improve efficiency among the nation’s 3 stodgy telcos by doing something that carriers in the west did on their own long ago. Read Full Post…
Bottom line: A new plan allowing customers of China’s 3 telcos to roll over unused data is being forced upon them by Beijing, and once again underscores the regulators’ frustration at their inability to innovate.
Telcos launch data roll-over policy
In the latest signal of just how uncreative China’s big 3 telcos are, the trio have all just simultaneously announced a major new move to boost data usage on their networks by lowering costs for consumers. It will come as no surprise that none of the 3 carriers are taking this step voluntarily, and instead are being forced into the move by the telecoms regulator. But that’s quite common for the uninspired trio of China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 763; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA).
Instead, it’s more interesting to note that this new move may represent the latest signal of Beijing’s growing frustration with a trio of companies that have become global laggards despite having a state-granted monopoly over the world’s largest telecoms market. That frustration could see Beijing soon decide to end the state-run monopoly, in an overhaul that would allow privately funded players into the market and perhaps even see a merger for 2 of the current big 3 telcos. Read Full Post…
Bottom line: The MIIT is quite possibly weighing a merger between China Telecom and Unicom, but any final decision might take at least a year due to the regulator’s cautious and slow-moving nature.
Marriage on tap for China Telecom, Unicom?
A new research note is raising the intriguing possibility that a merger could be coming for the smaller of China’s 3 big telcos, saying China Unicom (HKEx: 763; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) may soon be forced into marriage. The reasons for such a marriage are certainly compelling, and a recent leadership shuffle among the nation’s 3 big telcos could point to such a move.
Some might argue that such a marriage would be anti-competitive, reducing China’s mobile space from 3 carriers to just 2. But the fact of the matter is that China’s telecoms regulator has become quite frustrated with this trio, who constantly fight among each other for market share but do very little to innovate despite controlling the world’s largest mobile market. Rather than focus its efforts on reforming this laggard bunch of state-run behemoths, the regulator has taken a number of other recent steps to bring more innovative, private investment into the sector. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 25. To view a full article or story, click on the link next to the headline.
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China Telecom (HKEx: 728), Unicom (HKEx: 762) May Merge – Deutsche Bank (Chinese article)
Didi Kuaidi in Strategic Partnership with LinkedIn (NYSE: LNKD) (Chinese article)
Toshiba in White Goods Deal with China’s Skyworth (HKEx: 751) (English article)
Huishang Bank Turns to HK for Share Sale After China Rout (English article)
JD.com (Nasdaq: JD) Boosts Asia Reach With HK Office, Logistics Tie-Up (GlobeNewswire)
Bottom line: Apple is likely to log strong orders for its new iPhone 6S models, aided by its own strong reputation and aggressive promotions by China’s telcos for their new 4G service.
New iPhones on order in China
What a different 3 years makes. In that brief period China has transformed from ugly stepchild to a new Cinderella for gadget giant Apple (Nasdaq: AAPL), whose newly announced iPhone 6S models will make one of their first global stops in the world’s largest smartphone market. That’s the word trickling out from China-based sources, which were leaking the information as Apple unveiled its latest iPhone models at a globally-watched event in California.
While most eyes were fixated on that launch for the new series of iPhones, China watchers were more focused on when the models will come to a market that is now Apple’s largest outside the US, and even briefly passed the US early this year. Apple’s China fans weren’t disappointed, with reports that the nation’s big 3 telcos would begin taking orders for the new iPhones just a day after the US launch event. Read Full Post…
Update: Since writing this post, China Telecom and Unicom have both announced that they will swap chairmen. Wang Xiaochu will resign from China Telecom and become head of Unicom, and Chang Xiaobing will resign from Unicom and become head of China Telecom. (Unicom announcement, China Telecom announcement)
Bottom line: A rumored shake-up in the top ranks of China’s big 3 telcos is long overdue, but will only be effective if Beijing installs experienced, marketing savvy managers rather than the usual government bureaucrats.
Leadership shuffle coming at big 3 telcos?
I was largely dismissive of the first reports to emerge last week of a brewing shake-up for the leadership at China’s big 3 telcos, saying the basis for the speculation didn’t seem too solid. But the chatter continued to gain momentum at the end of last week, leading me to change my view and predict that perhaps much-needed change is on the way and could be announced soon.
The buzz began when media first reported that the telecoms regulator had called a meeting last Friday of top leaders of China’s big 3 state-run telcos, China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 763; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA). (previous post) Now media are reporting that the Ministry of Industry and Information Technology (MIIT) has called another meeting for Monday, and some are citing unnamed sources saying that the main topic is a big leadership shuffle. Read Full Post…
Bottom line: China Mobile’s return to profit growth is slightly encouraging but may be short-lived, while the MIIT isn’t likely to make any major new moves when it meets with China’s big 3 telcos on Friday.
Growth returns to China Mobile’s profit
After seeing its profits contract for the last few quarters, leading mobile carrier China Mobile (HKEx: 941; NYSE: CHL) finally wowed investors with an unexpected return to profit growth in its latest reporting quarter. But the euphoria was short-lived for China Mobile’s stock, which rose sharply after the report came out, only to give back all the gains by the end of the trading day. That would seem to show that investors are more worried about China Mobile’s top line revenue, which contracted during the quarter despite the profit growth.
At the same time, change could be coming soon for China Mobile and its 2 big state-run peers, China Telecom (HKEx: 728; NYSE: CHA) and China Unicom (HKEx: 762; NYSE: CHU), which have all been called to a meeting with the telecoms regulator on Friday. There are plenty of things the Ministry of Industry of Information Technology (MIIT) may want to discuss with these 3 slow-moving and bureaucratic telcos, but at least one media is speculating the trio could be getting set for some top management changes. Read Full Post…
Bottom line: After a slow start, China’s VNO program is showing signs of starting to gain momentum and could start to pose a meaningful challenge to the country’s big 3 mobile carriers by the end of next year.
VNOs move slowly but steadily
China telecoms regulator has just released some new data on the country’s virtual network operator (VNO) program a year after the first service launched, aimed at providing some competition for the country’s big 3 state-run telcos. While some observers are saying they’re disappointed at the data that shows China had 8.2 million VNO subscribers at the end of last month, I would actually take a contrarian view and say I find the figures somewhat encouraging.
Frankly speaking, I wasn’t at all confident that the VNO program would attract many subscribers at all. That’s because the program relied on cooperation from China’s big 3 telcos, which were required to sell capacity on their networks to these virtual operators, who would then sell service under their own brand names. The big and obvious problem lies in conflict of interest, since the big state-run telcos would hardly want to support these private companies that could quickly become major new competitors. Read Full Post…
Bottom line: Internet-based financial services should continue to boom over the next few years, while a rapid decline in microblogging could start to ease now that Weibo has consolidated its position as market leader.
Weibo consolidates microblogging market
China’s Internet data tracker has just released a slew of figures for the first half of the year, painting a rosy picture for companies like Alibaba (NYSE: BABA) and others that are moving aggressively into online financial services. At the other end of the spectrum, microblogging continued its rapid decline, as marginal players retreated and industry leader Weibo (Nasdaq: WB) consolidated its position.
On a broader level, I was surprised to see the growth rate in overall Internet users slow sharply in the first half of this year, even as the number of people accessing the web over their mobile phones continued to post strong growth. I also took the time to tally up the subscriber totals for China’s big 3 telcos in the first half of the year, which shows that the dominant China Mobile (HKEx: 941; NYSE: CHL) gained share on its 2 smaller rivals as it aggressively promoted its year-old 4G service. Read Full Post…
