Unicom Eyes Taiwan to Boost 3G - Analyst&nbsp
2010-08-06 18:08:34   来源：企业网D1Net   评论：0 点击：

Second-largest Chinese carrier China Unicom (CHU) appears to follow in the footsteps of its larger peer China Mobile (CHL) as the company is seeking the support of Taiwanese partners to boost its 3G business. China Mobile recently forged a deal with Taiwanese carrier Far EasTone to jointly develop and test a high-speed mobile broadband network.
 
According to a Taiwan-based media, China Unicom has reportedly visited the largest Taiwanese telecom carrier Chunghwa Telecom (CHT) and the country’s leading wireless retailer Senao International for future collaboration opportunities. Speculation suggests that Senao may open a retail distribution unit in Mainland China with China Unicom having a stake in the entity.
 
Chunghwa Telecom is experiencing significant subscriber growth for its mobile Internet services, thanks to the growing demand for 3G mobile broadband and smartphones in Taiwan. The operator will launch HSPA+ standard based 3G services in 2010 which will deliver peak downlink speeds of 21 megabits per second (Mbps). As such, the partnership with Chunghwa Telecom will enable China Unicom to leverage the Taiwanese carrier’s 3G leadership and expertise.
 
 Moreover, China Unicom is planning to strengthen its partnership with Taiwanese handset giant HTC Corp. The carrier is optimistic about forming a three-way collaboration in which HTC will supply customized smartphones while Chunghwa Telecom and Senao would be responsible for value-added services and marketing, respectively.   
 
China Unicom made significant progress in expanding its WCDMA standard based 3G services which the carrier launched across 285 Chinese cities in October 2009. The company spent RMB36.4 billion (US$5.3 billion) in 2009 to develop its 3G business and covered 335 Chinese cities with 3G user base reaching 2.74 million.
 
The carrier targets spending RMB23 billion (US$3.4 billion) on 3G network in 2010 and capturing one-third of the Chinese 3G market by year-end. 3G remains a compelling opportunity and represents the single biggest driver of the company’s long-term growth.
 
However, China Unicom contends with a highly competitive domestic wireless market. The company remains significantly challenged by the aggressive nationwide 3G service roll-outs of its peers China Mobile and China Telecom (CHA).
 
China Unicom’s 3G business suffered a slowdown recently, attributable to the carrier’s high-priced 3G service plans and expensive handsets. The company needs to boost its 3G application content and promotional spending to remain competitive as its rivals promote 3G services at lower tariffs and higher subsidies.
 
While we remain bullish on China Unicom’s future growth prospects in 3G wireless, the associated expenditures for nationwide network deployments are likely to impact short-term profitability, tighten free cash flow and impact margins.