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Telecom behemoths spend 80b yuan on 3G rollout

By Wang Xing (China Daily)
Updated: 2009-07-23 07:57

Chinese telecom operators have invested 80 billion yuan ($11.71 billion) in the first half of this year to build a third-generation (3G) services network, according to figures from the Ministry of Industry and Information Technology (MIIT).

But mobile users in the country have been slow to accept the new service, Chinese media said.

Zhu Jun, deputy director of the telecom development department under the MIIT, said yesterday that construction of the 3G network has been smooth in the world's largest mobile market.

He said China Telecom and China Unicom have launched their 3G services in 342 and 100 Chinese cities respectively, while China Mobile will also expand its 3G services from the current 38 cities to 238 cities by the end of this year.

Special Coverage: World Telecommunication Day Bringing 3G Closer to Life Related readings:  Stiff competition, capex may take sheen off 3G  Miles to go for 3G to make profits  China telecom market may reshuffle as consumers show low loyalty toward 3G operators  Mobile users top 670m after 3G services start  3G ready but users lag behind

However, Shanghai Securities News reported that China Mobile and China Telecom might fall far short of their 3G subscriber targets for 2009 as Chinese consumers did not show great interest in the new service.

The newspaper said China Mobile had set a target of 10 million 3G subscribers for 2009 at the beginning of the year, but slashed the target to 3 million due to poor results from initial tests with netbooks. China Telecom had attracted only 100,000 3G subscribers to date, far short of the 20 million it had originally targeted for 2009.

Wang Yuquan, senior consultant from research firm Frost & Sullivan, said most of the high-end users in China were still those that mostly used voice services and did not have a great interest in 3G services.

"Chinese operators have the habit of launching new services before they are well-prepared," he said. "That significantly hurt the user experience for the 3G services."

According to figures from MIIT, mobile phone users in China increased by 53.95 million in the first half of this year, while fixed line users reduced by 10.44 million. Telecom revenue increased only 2.3 percent to 41.7 billion yuan in the period.