Nov. 19, 2009 (Chinavestor) China Unicom (NYSE:CHU), the second largest Chinese mobile carrier by subscriber numbers, reported operation statistics for the month of October as follows:
- New mobile subscribers: 801,000
- Total mobile subscribers: 143,600,000
- 3G subscribers: 1,021,000
But as the following chart puts these numbers into perspective, the less then a million new subscribers a month is not that impressive. Dynamics have been working against China Unicom (NYSE:CHU) in the second half of 2009 as the Company continues to lose market share to rivals China Telecom (NYSE:CHA) and China Mobile (NYSE:CHL).
Part of the problem for China Unicom (NYSE:CHU) is her U.S. standard based 3G network. While it serves the U.S. well, mobile devices designed for American customers are way too expensive for ordinary Chinese customers. Take the iPhone for example which sells for $800 in China and Hong Kong, definitely beyond the reach for most Chinese. Outlook for CHU's mobile segment is not bright either. The Wall Street Journal reported last week that a 3G phone for China Mobile (NYSE:CHL) is going to hit the markets in December. Read "WSJ Wrong on China Smartphones" article for details. Dell's Mini3 mobile phone is a full featured 3G phone run on Google's Android op. system, an excellent combination for a price sensitive market like China. If that phone for China Mobile (NYSE:CHL) is going to be hit, is a big question. But if it will, China Unicom (NYSE:CHU) is going to loose its shine even more.
Looking at the fixed line segment for China Unicom (NYSE:CHU), the picture isn't bright either. The segment is loosing customers at an accelerating tempo. China Unicom (NYSE:CHU) lost more fixed line customers in October than in the first five months of 2009 combined! While it's well understood that the fixed line segment is going to deteriorate, as evidenced with larger China Telecom (NYSE:CHA), the rate is certainly surprise.
China Telecom (NYSE:CHA) and China Unicom (NYSE:CHU) dominate the broadband segment but according to the latest statistics, CHU is losing market share, again. The big dip in October, only 539,000 new subscribers vs. 2009 average of 800,000/month, is very disappointing.
Operational statistics are very disappointing for China Unicom (NYSE:CHU) at this point. But bigger rival China Mobile (NYSE:CHL) is going to report mobile numbers soon, giving investors better visibility of the Chinese mobile sector.
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