Race to Develop 3G Is Now Based on New Models, Not Network Coverage

Nokia Unveils 11 Handset Models as China Telecom, China Mobile and China Unicom Fight for the Lead

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David Tang, Nokia's VP of sales in China at the June 24 launch event in Beijing
David Tang, Nokia's VP of sales in China at the June 24 launch event in Beijing

BEIJING (AdAgeChina.com) -- After 3G licenses were issued to three Chinese telecom companies in January 2009, the race started to build up network coverage in the world's largest mobile phone market.

All three have made significant progress. China Unicom launched commercial 3G trials in 44 new cities on June 28, raising its total coverage to 100 cities. China Telecom and China Mobile intend to broaden their 3G network coverage to 500 cities and 238 cities respectively before the end of this year.

Now another race is underway to sign up customers, an effort that has paired operators with local and foreign handset makers.

Last week, China's largest mobile handset marketer, Nokia, introduced three new phones, the Nokia E72, the Nokia 5530 XpressMusic and the Nokia 3710 fold, and showcased eight of its latest models for the first time in China.
Ten of Nokia's 11 new phones offer 3G
Ten of Nokia's 11 new phones offer 3G
Of these 11 phones, 10 have 3G capability and one retails for less than 1,000 RMB ($147). Nokia has focused its mobile services in five areas -- media, messaging, music, games and social location--as well as 3G applications like video calls and video streaming.

"Our mission of 'connecting people' has reached a new level, enabled by the incredible new power of mobility and internet convergence," said David Tang, Nokia's VP of sales in China at the June 24 launch event.

"We want to help Chinese consumers to make the most of every moment, through highly personalized and contextually relevant solutions...This will happen not only in Beijing and Shanghai but for people everywhere in China, including those in rural markets."

Some 180 million people use Nokia phones in China, giving the Finnish company about a 30% share of the market. But in the 3G arena, Nokia's lead depends partly on what happens at the operator level. Most of Nokia's 3G handsets will only work on the WCDMA network built by China Unicom, which has joined the Open Handset Alliance.
But China Mobile controls about 70% of the country's mobile phone market, so most of Nokia's current customers will have to change service providers -- and their mobile phone number -- to use the new devices.

China Telecom, which operates 3G services based on CDMA 2000 1X EV-DO technology, introduced 20 models of 3G-compatible handsets last month.

The phones are made by two Korean companies, Samsung and LG, and local manufacturers like ZTE Corporation, China Wireless Technologies subsidiary Yulong Coolpad, Hisense, Huawei, Beijing Tianyu Communications Equipment and Dopod. Coolpad also launched China's first mobile application store late last month.

In terms of total handset shipments, ZTE became the largest Chinese handset maker, with 7.2 million units shipped during the first quarter of 2009. Rival Huawei shipped 6.6 million handset units during the same period, making it the No. 2 player.

China Mobile has cooperated with local handset makers to develop a homegrown Android-based TD-SCDMA smart phone named OPhone but so far few of its models work well with its 3G platform. As a result, China Mobile's existing lead in mobile services has not led to a booming 3G business.

By the end of June, less than 3% of new China Mobile subscribers were signing up for its 3G service. The rest chose standard 2G service plans. By the end of May, China Mobile had 746,000 subscribers for its 3G network, out of 488 million total subscribers.

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