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.
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
Survey of 4G users: After upgrading to a 4G plan,
Chinese Mobile Phone Subscribers Upgrade to 4G
how much has your monthly telecom spending changed?
Source: GrassrootsSM Research as at 30 October 2014.RMB = Chinese renminbi.