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4G Driving Strong Mobile Telecom Growth in China 

Joey Wong 


Joey Wong


Demand for speedy 4G technology is set to boost revenues for the China telecommunications industry, according to a recent Grassroots Research survey. China Mobile's head start in 4G should help the company regain market share.
By Joey Wong, GrassrootsSM Research Analyst

Since China Mobile's December 2013 launch of 4G mobile services, the company has led the way in signing up new mobile subscribers to its TD-LTE¹ network. However, competition started to intensify in the third quarter of 2014, when China Unicom and China Telecom were granted FDD-LTE² licenses in 16 trial cities.

To better understand Chinese consumers' data usage and ARPU³ trends on smartphones, as well as preferences among the three telecom operators, GrassrootsSM Research conducted a consumer survey with more than 1,000 mobile phone users in China.

The survey results revealed that among existing 2G subscribers surveyed, 45 per cent intended to upgrade to 4G in the next 12 months. With existing 4G subscribers, 88 per cent cited an increase in their monthly mobile phone bill after upgrading to 4G (see chart), which implies that there is the potential for an ARPU increase when more subscribers upgrade to 4G. Meanwhile, among the three telecom operators, China Mobile is generally perceived as the best in terms of voice and data network quality.

"The GrassrootsSM Research survey results support our positive view on 4G driving strong data revenue growth for the China telecommunications industry," commented Kathy Chen, Senior Research Analyst in Hong Kong. "Although data unit pricing will fall, we expect strong data volume growth to drive revenue growth. We expect China Mobile's head start in 4G and its aggressive network rollout will help the company regain some high-end market share in the near term."

Potential for ARPU Increase When
Chinese Mobile Phone Subscribers Upgrade to 4G

Survey of 4G users: After upgrading to a 4G plan,
how much has your monthly telecom spending changed?

Potential for ARPU Increase When Chinese Mobile Phone Subscribers Upgrade to 4G

Source: GrassrootsSM Research as at 30 October 2014.RMB = Chinese renminbi.

1. Time-division long-term evolution
2. Frequency division duplexing long-term evolution
3. Average revenue per user

The material contains the current opinions of the author, which are subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Forecasts and estimates have certain inherent limitations, and are not intended to be relied upon as advice or interpreted as a recommendation.

Allianz Global Investors Distributors LLC, 1633 Broadway, New York, NY 10019-7585,, 1-800-926-4456.


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