China Mobile moves into next generation of communications

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China Mobile Communications Corp, the parent company of China's biggest telecom carrier, China Mobile, announced it will offer commercial fourth-generation telecom services in 340 Chinese cities next year.

Xi Guohua, chairman of China Mobile, said on Wednesday that the company will build 500,000 4G base stations across China in 2017, constituting the world's largest 4G network. The company currently has about 200,000 4G base stations.

Xi spoke during the China Mobile Global Partner Conference in Guangzhou.

China Mobile will offer 4G services in 16 cities, including Beijing and Shanghai, by the end of the year, Xi said. In Beijing, the company's 4G network already covers the area inside the Third Ring Road.

Customers don't need to change their phone numbers, but just get a new SIM card for their 4G handsets. The new mobile network achieves data download speeds of up to 80 megabits per second, four times faster than 3G networks.

Xi predicted that the total number of TD-LTE mobile phone models will exceed 200 and entry-level 4G smartphones will hit the market in 2017.

China Mobile is targeting sales of 190 million to 220 million mobile terminals running on its wireless networks by 2017, Xi said. Of those, about 100 million handsets should be 4G smartphones, he added.

Analysts said China Mobile's move is decisive and ambitious, and shows a strong desire to win back customers that it lost in the 3G market competition.

Bryan Wang, principal analyst at Forrester Market Advisory (Beijing) Co, said China Mobile's target of 100 million 4G smartphone sales next year is "somewhat surprising", since the carrier's total user base was about 760 million as of October.

China United Netcom and China Telecom Corp managed to increase their 3G user base to 100 million each over three years, "but China Mobile wants to achieve a similar goal in one year," Wang said.

The bold target, in terms of both network deployment and smartphone sales, will impose a heavy burden on China Mobile's budget, Wang said.

"China Mobile is very likely to make record high capital expenditures in 2017, even though the company already invested huge sums in 4G projects this year," he added.

The introduction of Apple Inc's iPhone handsets could be even more costly. Since China Mobile will offer generous incentives for high-end 4G flagship smartphones such as the iPhone 5S, the company may spend tens of billions of yuan in device subsidies next year, Wang said.

According to China Mobile's financial statements, its capital spending in 2013 will be up 49 percent to 190.2 billion yuan ($30.5 billion). More than half of the company's network expenditure, 42 billion yuan, is flowing into the 4G sector.

Gao Nianshu, general manager of China Mobile Communications Corp's market operations department, said China Mobile expects to invest 27 billion yuan in handset subsidies in 2013. The figure will continue to increase in the coming years.

Zeng Jianqiu, a professor at Beijing University of Posts & Telecommunications, said China Mobile's 4G strategy dovetails with China's broadband construction target. The country intends to be fully connected to the Internet by 2017.

About the broadcaster:

Nelly Min is an editor at China Daily with more than 10 years of experience as a newspaper editor and photographer. She has worked at major newspapers in the U.S., including the Los Angeles Times and the Detroit Free Press. She is also fluent in Korean.