Feb. 23, 2010 (Chinavestor) All three major Chinese telecom carriers reported operational statistics recently. What's happening is in line with our expectation: China Mobile (NYSE:CHL) continued to dominate the sector while smaller rivals, especially China Unicom (NYSE:CHU), continue to lose market share. China Telecom (NYSE:CHA) has a sound 3G business that is superior to China Unicom's thanks to a large selection of affordable GSM based handsets. Total number of mobile subscribers in China reached 735.78 million, up 9.83 million from last month. China Mobile added over 50% of all subscribers, solidifying its leading position. China Mobile (NYSE:CHL) added three times as much mobile subscribers in January than China Unicom (NYSE:CHU).
We have kept a thorough month to month breakdown of subscriber base growth for China Unicom. As the following chart demonstrates, cellular subscriber base for China Unicom (NYSE:CHU) has been leveling out at around 800K a month, a lackluster performance compared to China Mobile (NYSE:CHL) or China Telecom (NYSE:CHA).
As the latest operational statistics broke out the markets punished China Unicom (NYSE:CHU) the most - not surprisingly. Here is a detailed comparative price chart for CHU, CHL and CHA.
Looking forward 3G mobile growth will be key. These premium service subscribers will help improve operating margins for telecoms, projecting which telecom is going to be able to recover high network development costs. It is hard to get a true picture of the dynamics of the 3G sector at this point. China Telecom (NYSE:CHA) launched first her 3G system based on the European GSM standard. China Unicom followed with the North-American CDMA based network. Finally, China Mobile (NYSE:CHL) commenced a commercial launch of her home growth TD-SCDMA standard 3G network later in 2009.
China Telecom (NYSE:CHA) has Nokia's most successful and affordable line of smartphones. China Unicom (NYSE:CHU) has the iPhone but is selling close to $1000 in China, way too much for the average user. China Mobile (NYSE:CHL) has Dell's Mini and HTC's smartphones, both more affordable than Nokia's comparable models. My assumption is that China Mobile (NYSE:CHL) is going to win again over the long haul, thanks to her low cost network (home grown) and affordable line of smartphones. If this assumption is right will come to test soon when Chinese major carrier will report 2009 Q4 and later 2010 Q1 numbers. This is when analysts will be able to gain more visibility into China's telecom markets. For now, let's just be content with gut feeling.
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