China Mobile plans 3G market cooperation

Company to invest further in distribution

China Mobile Ltd, the world's biggest mobile carrier by subscriber, plans to step up cooperation with mobile phone manufacturers and marketing partners, in the hope of improving performance in the domestic third generation (3G) telecommunications market.

The carrier also said on Thursday it will begin procuring more than 200,000 TD-LTE 4G terminals, including data cards and mobile phones, in the fourth quarter this year. On Sept 19, China Mobile had firstly invited public bidding for 34,700 TD-LTE terminals, as it said those devices would be put into network service tests.

China Mobile leads its domestic rivals in terms of total number of mobile subscribers. By August, the operator had 693 million mobile users, almost twice the combined client number of China Unicom (Hong Kong) Ltd and China Telecom Corp Ltd, the other two telecom operators in China.

However, when it comes to the 3G telecom service market, the competition is more of an evenly-matched three-horse race. China Mobile had 72.1 million 3G users as of August, while China Unicom and China Telecom had 63.7 million and 56.4 million clients, respectively, in the same period.

Analysts blamed the lackluster 3G market performance of China Mobile on the inferior 3G technology it had adopted. Chinese authorities granted a homegrown TD-SCDMA 3G license to China Mobile in 2009, while the other two carriers received approval to deploy more popular WCDMA and CDMA 3G networks.

Li Yue, general manager of China Mobile, said the company would like to develop in-depth cooperation with mobile phone manufacturers and partners on the distribution side, a move that may help the operator to keep up with 3G market competition.

"We hope mobile phone makers will launch more TD handsets with high quality and innovative technologies. China Mobile will also expand products and services distribution channels, to allow customers to buy TD devices from both our outlets and partners' sales networks," Li said. He made the remarks at China Mobile Terminal Industry Chain Summit in Beijing on Thursday.

Li said China Mobile has almost realized its goal to launch TD version devices "at the same time, at the same quality and at the same price" as rivals. He predicted the company will sell more than 100 million TD version terminals next year, of which more than 80 percent will be smart terminals.

China Mobile is set to sell 60 million TD devices this year, up from 9.4 million in 2010, he added.

Tang Jianfeng, assistant general manager of China Mobile Device Co Ltd, said it will increase terminal subsidies and invest further in distribution channels in order to boost sales.

China Mobile on Thursday signed strategic cooperation agreements with several national consumer electronics chain stores, including Suning Appliance Co Ltd and Gome. Jin Ming, president of Suning, said he expected to sell TD handsets in 1,800 Suning stores across the country by the first half of next year.

"We hope to help sell 5 million TD terminals in the following 12 months," Jin said.

By having a closer relationship with mobile phone vendors and third party marketing partners, China Mobile may be able to maintain its current position in the domestic 3G market. "However, given the obvious disadvantages in terms of 3G network speed and quality, China Mobile will not gain a real upper hand until it receives a 4G license," said Wang Ying, analyst at Beijing-based research firm Analysys International.