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In-Stat/MDR Forecasts 118 Million 3G Wireless Subscribers in China by 2008
Posted: 15-Jun-2004 [Source: In-Stat]

[In-Stat says crucial year ahead for 3G in China.]

Scottdale, AZ -- 2004 will be a crucial year for Third Generation (3G) cellular in China, reports In-Stat/MDR. With over 260 million mobile subscribers and more than 4 million new subscribers added every month in 2003, China is the largest cellular market in the world and a potential hotbed of 3G activities. With so many players involved from Chinese governments, equipment providers, handset manufacturers and content providers, many of them are very focused on making 3G happen.

However, according to the high-tech market research firm, for Chinese wireless operators, the expectation and scale of the promise of 3G has to be tempered accordingly. According to Tina Xu, an In-Stat/MDR analyst based in China, "Operators would prefer to pace infrastructure rollout with the resolution of technical issues, along with the availability of attractive and affordable handsets and relevant content, regulatory requirements." Yet, operators may have little choice in dictating the best time for service availability. According to Xu, "As in most regions of the world where cellular subscriber rates are rapidly increasing, the implementation of 3G in China is critical in order to accommodate a transformation of users' expectations from voice-centric communications to a more complex mixture of voice, wireless data and multimedia services." The availability of Third Generation networks such as CDMA2000, W-CDMA, and TD-SCDMA will give operators improved network efficiency, higher capacity, and the ability to begin offering high-speed wireless data services.

In-Stat/MDR has also found that:

The number of mobile subscribers in China will grow from 268.69 million in 2003 to 497.86 million by 2008, growing at a compound annual growth rate (CAGR) of 11.7%, reaching a penetration rate of 37.6%. Commercial 3G deployments will begin in 2005, and 3G subscribers will grow to 118.13 million by 2008.

Through 2008, China Mobile will still hold the leading position in the mobile market in terms of its large subscriber base and operation experience. China Unicom will maintain its position as the second largest carrier during this time, and 2003 and 2004 will see it improve its market share in line with the expansion of its CDMA network. However, with the entrance of new carriers in 2004/2005, both China Mobile and China Unicom will see an erosion of their market share due to increased competition.

Over the past decade, the China mobile market has gradually entered the digital age, and by the end of 2003, China boasted the world's largest GSM network. Through 2008, GSM will continue to dominate the subscriber base. Operators are also hopeful that a positive user experience with 2.5G will translate into rapid adoption of 3G services. However, many of the outstanding features of 3G technologies are not in demand by most subscribers for the time being and it will take at least 2 to 3 years for 3G subscribers to exhibit high growth after 3G services are launched.

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