Chinese operators converge on low-end 3G handsets

Jane Wang/Ovum
26 Jul 2010

With 3G competition continuing to grow among Chinese mobile operators, all three have adjusted their handset strategies to increase their subsidy levels - particularly for mid-range and low-end 3G mobile phones.

This will grow the market, but will impose a financial burden on the operators. Handset competition will also maintain pressure on vendors’ margins, and customers will be the main beneficiaries.

In May this year, China Mobile’s CEO Wang Jianzhou announced that China Mobile will increase its handset subsidy in 2010 to grow its 3G subscriber base.

Total subsidies will reach 15 billion yen ($171.2 million), most of which will be for 3G handsets. This subsidy level is significantly higher than in previous years.

Meanwhile, China Telecom has begun to implement a new handset subsidy policy in some provinces for its CDMA handsets, and China Unicom, which had always avoided implementing 3G handset subsidies, recently announced that it will follow suit.

Despite their different technology and segment strategies, the three big operators are all focusing on mid-range and low-end 3G handsets to enlarge their subscriber bases.

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