After a low-key awarding of licenses last last year, the first batch of new virtual network operator (VNO) mobile carriers are quietly coming into the market this month in a move aimed at shaking up the industry dominated by 3 big state-run telcos. In one of the most anticipated launches, e-commerce giant JD.com has just announced its first mobile packages that show how it plans to compete with the trio of China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA). Read Full Post…
China Telecom (HKEx: 728; NYSE: CHA) is quickly becoming a company to watch, with new signals indicating it will soon receive a 4G license for its FDD-LTE technology as it searches for private partners to co-develop new services. These 2 news bits actually come from separate sources, but they collectively show that China Telecom could be poised to gain some market share over its larger and more bureaucratic rivals China Mobile (HKEx: 941; NYSE: CHL) and China Unicom (HKEx: 762; NYSE: CHU). Regular readers will know that I’m relatively bullish on China Mobile and China Telecom, though I’m far less enthusiastic about the schizophrenic Unicom. Read Full Post…
Leading wireless telco China Mobile (HKEx: 941; NYSE: CHL) has kicked off the first-quarter earnings season with some numbers that look quite scary, reflecting a sharp slowdown as its home market shows growing signs of saturation. Adding to the problem is the rapid growth of “over the top” (OTT) apps like Tencent’s (HKEx: 700) popular WeChat, which are stealing business from China Mobile’s traditional text messaging service. I commented last month that a recent sell-off in China Mobile shares could represent a good buying opportunity, but clearly these latest results show the company is going through a period of painful readjustment that is likely to last for the rest of this year. Read Full Post…
Rising e-commerce giant JD.com has been all over the blogosphere this past week, trumpeting some major adjustments in its core e-commerce unit as it also prepares to become one of the first companies to challenge China’s 3 major telcos under a new plan to open up that sector. Of course all of this comes against the backdrop of JD.com’s own upcoming New York IPO, which could raise up to $1.5 billion.
If I was being cynical, I might say that much of this buzz is aimed at keeping JD in the headlines as it prepares to list, especially since last week saw early signs that the red-hot New York market for Chinese IPOs may be starting to cool. But in this case, I do think that much of the buzz coming from JD seems genuine and isn’t just hype, as the company tries to position itself to pose a major challenge to e-commerce leader Alibaba. Read Full Post…
We’re getting a glimpse of where future priorities may lie for smartphone makers ZTE (HKEx: 763; Shenzhen: 000063) and TCL Communications (HKEx: 2618; Shenzhen: 000100), with the former hinting at a move into wearable devices and the latter placing big bets on China’s homegrown 4G technology called TD-LTE. ZTE isn’t exactly known for setting new market trends, but I would certainly like its decision to test its luck in wearable devices like wrist watches and glasses sooner rather than later. Meantime, TCL’s TD-LTE gambit looks like a 50-50 bet to me, as this notoriously boom-bust company tries to find a sustainable formula for success. Read Full Post…
I don’t usually offer direct investment advice in this space, but today I can’t resist opining that perhaps investors are being a bit hasty in dumping shares of China Mobile (HKEx: 941; NYSE: CHL) after the nation’s dominant wireless carrier reported its first annual profit decline in more than a decade. The decline shouldn’t come as a huge surprise, since China Mobile reported an 8.8 percent profit decline in the third quarter. Obviously falling profits are never something investors want to see. But in this case it’s also worth noting that China Mobile has responded to the challenge with a number of new initiatives that show it is finally waking up to a new reality where it faces growing competition from the private sector. Read Full Post…
A new report about a sudden exodus of middle- and top-level executives from China’s big 3 telcos is forcing me to rethink my earlier assertion about the relationship between those carriers and a group of new competitors called virtual network operators (VNOs). Earlier reports about the defection of a top executive from one of the big telcos to a new VNO had prompted me to declare the big 3 state-run carriers were trying to sabotage the new VNO scheme to quash any new competition. But now this new report reveals that similar defections at all levels of management are becoming widespread, indicating perhaps that market economics really are at work here. Read Full Post…
A new flurry of reports are saying that 4G service launches are coming soon from the nation’s 2 smaller telcos, China Telecom (HKEx: 762; NYSE: CHA) and Unicom (HKEx: 762; NYSE: CHU), as both seek to stop leading telco China Mobile (HKEx: 941; NYSE: CHL) from gaining any advantage from its earlier roll-out of similar service. The move initially came as a slight surprise to me, as I really didn’t expect either company to aggressively promote 4G until the second half of this year for technological and cost reasons I’ll explain soon. But this sudden acceleration in their plans actually looks like a smart strategic move to prevent China Mobile from gaining new momentum, even if such a tack could create both technical and financial challenges for both smaller carriers. Read Full Post…
A welcome development looks set to shake up China’s fixed-line broadband sector this year, with word that leading wireless carrier China Mobile (HKEx: 941; NYSE: CHL) is offering aggressive pricing after receiving a license to offer fixed-line service late last year. Of course I’m speaking from the consumer’s perspective, since China’s 1.3 billion consumers and millions of businesses have had little or no choice for the last decade when choosing a fixed-line broadband supplier. The development looks less positive for the existing duopoly of China Telecom (HKEx: 728; NYSE: CHA) and China Unicom (HKEx: 762; NYSE: CHU, which may actually have to lower prices and improve their products to continue attracting new customers and keep existing ones from defecting. Read Full Post…
I have to admit I was quite disappointed to read that China’s regulator has set an extremely modest target for a new group of virtual network operators (VNOs) that will finally break the telecoms services monopoly held by China’s big 3 state-run telcos. I wasn’t expecting huge things from this new group of operators, who will lease network capacity from the trio of existing telcos and then sell telecoms services under their own brands. But the Ministry of Industry and Information Technology’s goal of just 50 million VNO mobile service subscribers by the end of next year looks ridiculously low to me and hints of worries that this new pilot program could be plagued with problems. (English article) Read Full Post…
Chinese media are buzzing with anticipation as dominant mobile carrier China Mobile (HKEx: 941; NYSE: CHL) prepares to finally offer the latest iPhones for its network next week, after becoming the last of the country’s 3 telcos to sign a deal with Apple (Nasdaq: AAPL). The move will almost certainly provide a nice boost for China Mobile’s newly launched 4G service, and I expect we could see up to 2-3 million iPhones sold over the next 2 weeks in the run-up to the gift-giving Lunar New Year late this month. But the real beneficiary of the deal will be Apple itself, which could see its iPhone sales boom as China’s 2 other telcos offer their own attractive new iPhone promotions. Read Full Post…
