China Mobile poised for big gains from 4G push into rural areas
Telecoms giant's planned redeployment of 4G services in mainland countryside could raise billions of yuan in extra revenue, say analysts
A plan by China Mobile to redeploy some of its spectrum to roll out fourth-generation network services in rural parts of the mainland could provide it with as much as 66 billion yuan (HK$83.4 billion) in fresh revenue over the next three years.
The "spectrum refarming" initiative, which China Mobile had previously declined to acknowledge, was discussed by executive vice-president Li Zhengmao at an event in Shanghai last week.
The world's largest wireless network operator plans to reuse its 900-megahertz spectrum for basic 2G services in order to deploy high-speed 4G services.
Bernstein Research said in a report that the mainland's rural areas struggled with poor fixed-line connections and slow 2G data services. By providing 4G in those areas, China Mobile would be able to develop a vast new market for mobile broadband services from its 400 million rural subscribers.
Both China Unicom and China Telecom provide limited 3G services in rural areas, while China Mobile has not invested in either 3G or 4G network coverage there.
China Mobile had 801.448 million subscribers on its 2G, 3G and 4G networks at the end of last month, pushing the mainland's overall mobile subscriber base to 1.282 billion.
There was "a good chance" that rural subscribers would adopt 4G as a substitute for fixed-line broadband connection, Bernstein senior analyst Chris Lane said yesterday, leading to plenty of service upgrades and higher monthly average revenue per user.