CDMA phones

China (mainland) – Service upgrades and network expansions from China Telecommunications Corp. (China Telecom) are in full swing ensuing the company' acquisition of CDMA network from China United Communications Corp. (China Unicom).

The company is set to launch the first phase of its network upgrade by constructing additional CDMA stations in low-coverage areas such as in counties and townships, and bundling fixed and wireless services for seamless communication via fixed mobile convergence (FMC) for better indoor coverage.

Succeeding plans involve release of CDMA-based mobile phones integrated with 3G technology in March 2009, with an investment of $11.7 billion. China Telecom forecasts 100 million CDMA subscribers by 2011, expanding its total market share to 15 percent or 670 million customers.

Over the next three years, China Telecom targets to increase its wireless Internet services for mobile phones. It will also release mobile phone numbers with the 189 prefix for the CDMA network in November, after having run commercial trials in 1,300 areas on the mainland.

Key network concerns identified

Compared to China Mobile’s homegrown TD-SCDMA technology, the CDMA network is cheaper and has a stronger market base for its multiple-play bundled services such as voice, broadband, IPTV and fixed mobile service platforms. However, CDMA has yet to fully address challenges and issues, such as poor network coverage, low average revenue per user (ARPU) and limited handset range.

About 43 million CDMA users in mainland China have been registered as of H1 2008. This accounts for 7 percent of the total 601 million mobile customers, according to a study by telecoms analyst Ovum. Areas of concern were identified in the fields of product development, customer service transformation, customer segmentation and market positioning.

CDMA operation changes hands

China Telecom officially took over China Unicom’s CDMA network in October 2008 for $16.1 billion, as part of the mainland China’s telecom industry restructuring plan. A breakdown of the purchase includes $6.4 billion for China Unicom’s existing subscriber base and $9.65 billion for its infrastructures.

The telecom industry restructuring aims to increase competitiveness among network providers by consolidating or merging fixed line operators with mobile service companies. China Mobile, China Netcom and China Telecom are the remaining active telecom operators on the mainland.