China’s mobile phone user base was up to 608.38 million by the end of July, a 19.63 percent rise over the same period in 2007, said China’s Ministry of Information Industry (MII). Mobile subscribers made up 46 percent of the population, with over 290 million users in eastern China. The first seven months of 2008 saw total net subscribership rise more than 61 million, an increase averaging 8.7 million monthly, the highest growth yet, it said. In July, Chinese mobile subscribers sent 57.76 billion text messages, averaging 3.08 messages per day, MII said.
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Telefonica will pay about $1.6 billion to increase its stake in China Netcom to 5.74 percent and expand in China’s wireless market, the Spanish company said. After Netcom’s planned merger with China Unicom, Telefonica, with 5.5 percent, will be the combined company’s largest private investor, Telefonica said. It will buy 2.071 percent of Netcom before the merger and 3.03 percent in connection with the combination, it said.
Open-source supporter LiMo Foundation is in “advanced discussions” with several “well-known” Web developers and search engine providers, Executive Director Morgan Gillis said in an interview. The mobile operating system industry will more toward unification, he forecast. Meanwhile, analysts said they expect rapid growth of Linux phones worldwide.
Satellite TV set-top boxes are now a mainstream consumer electronics device, Research & Markets said in a new report. Global shipments of digital satellite TV set-top boxes in 2007 totaled 72.2 million units, R & M said. Set-top boxes capable of receiving free satellite TV are popular in Western Europe, the Middle East, Southeast Asia and China, it said.
China’s four largest telecom companies posted first-half revenue totaling $45.3 billion. Profit totaled $9.5 billion. Business outside voice grew fastest for each. China Mobile topped the list with $24.6 billion in revenue, followed by China Telecom’s $11.2 billion, China Netcom’s $5.1 billion and China Unicom’s $4.4 billion. Their wireline businesses continued to decline. But operating profit and gross margins rose from a year earlier.
China’s new anti-monopoly law is a work in progress with many questions to be answered by rules implementing it, Gregory Louvel, a lawyer in Beijing, said in an interview. The law, which took effect Aug. 1, created an Anti-Monopoly Commission in the State Administration of Industry and Commerce to address abuses of market dominance. The ministry is involved in merger notifications and review, Louvel said, with the National Development and Reform Commission assigned to prevent price abuses. The overlap will complicate approvals, he said. It’s also unclear how the law will apply to joint ventures, since it vaguely defines “control,” “decisive influence” and other terms, said Louvel. He doesn’t expect China to stop a potential takeover of Yahoo by Microsoft, even if such a deal would restrict competition in that country. But China “very well” may use regulatory review to extract from foreign companies commitments such as investing more in Chinese high tech, said Louvel.
China Telecom’s first half net profit fell 8.2 percent to $1.85 billion, compared with the year-ago period, due to decline in its core fixed-line voice business, the company said. Another reason is May’s earthquake and other natural disasters that added $200 million to network operation costs, it said. Voice service revenue fell 11.8 percent to $7.4 billion. Revenue for Internet and data services rose 27.3 percent to $3.6 billion. Non-voice service consistently has driven company revenue growth, CEO Xiaochu Wang said in a statement. Total access lines fell 2.5 percent to 215 million. The company’s overall “severe imbalance” will improve as China continues its telecom restructuring, Wang said. Profit will face short-term pressure as wireline subscribership continues to shrink, he said. The restructuring calls for China Telecom to enter the mobile business by taking over a network from China Unicom. Shareholder approval of that purchase is pending.
China Mobile reported a 51 percent rise in Q2 profit, compared with the year-ago quarter, due mainly to “strong economic growth, rising consumer purchasing power and the subscriber growth in rural areas,” the company said. It added 45.25 million subscribers during the quarter, for a total of 415 million. On a half-yearly basis, net profit rose 44.7 percent to $8 billion, while sales were up 17.9 percent to $28.7 billion. The company will “actively search for quality overseas telecom assets as investment opportunities,” CEO Jianzhou Wang said in a conference call. Pali Research said expects positive cash flow for the rest of the year, it said. China Mobile plans to expand commercial trials of its TD-SCDMA-based 3G service to 38 cities in mainland China by June 2009, said Wang. The company is in Phase 2 of its 3G deployment, he said. The carrier will start buying equipment for Phase 2 in October, he said. Yet the company remains cautious about its outlook because Beijing’s restructuring of China’s telecom sector has changed the competitive landscape, the company said. Goldman Sachs believes the market underestimates China Mobile’s “3G responsibility and potential asymmetrical regulation risks,” it said.
Microsoft could be the first target of Chinese prosecutors under an antitrust law that took effect Aug. 1, Chinese technology companies said. Business officials and lawyers fear the law may affect international mergers. American businesses are pressing Beijing to clarify the Anti- monopoly Law of China’s import for mergers and intellectual property rights. Microsoft, which knows of no competition law investigation, “fully supports China’s efforts to establish an environment conducive to promoting fair competition,” a company spokesman said. Management believes the company is obeying Chinese law, he said.
China Unicom’s July net adds of 539,000 were 931,000 below Pali Research’s estimate and down 63 percent from a year earlier, mainly because of subscriber losses in the CDMA business, Pali said. July and August subscriber growth could be hurt by a reduction in marketing to ensure stable network performance for the Beijing Olympics, it said. China Unicom said subscribers increased 11.9 percent to 171.3 million at the end of July.