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Making way for Apple's iPhone, China Mobile to spend $6.7B building out 4G network

post #1 of 14
Thread Starter 
China Mobile will spend 41.7 billion yuan ($6.7 billion U.S.) to develop 4G technology this year in anticipation of the arrival of the world's most popular smartphone ? Apple's iPhone ? on the world's most populous wireless carrier.

iMacs
Apple's next iPhone may becoming to the world's most populous wireless carrier.


China Mobile revealed on Thursday that it will spend 190.2 billion yuan ($30.1 billion) on its networks this year, with nearly a quarter of that going into its TD-LTE 4G technology, according to Reuters.

The next version of Apple's iPhone, according to some industry observers, is expected to support China Mobile's TD-LTE 4G, even though that technology is less widespread in use than FDD-LTE.

For China Mobile, the investment will boost speeds on a network that, while hosting 715 million subscribers, lags far behind its competition in connectivity. Only 13 percent of China Mobile subscribers are on 3G, while that figure is 33 percent for China Unicom and 44 percent for China Telecom. China Mobile's 3G speeds are also quite slow, with many users relying on the carrier's widespread Wi-Fi hotspot network for bigger downloads.

Despite China Mobile's popularity, the carrier has not yet landed Apple's industry-leading smartphone. More than 10 million of its customers already have iPhones operating on its network, even though the device is not compatible with China Mobile's 3G standard. The inability to offer customers an iPhone on contract, though, is seen as a reason for the carrier's slowing profit growth.

China Mobile's 4G network, the company announced at this year's Mobile World Congress in Barcelona, will consist of 200,000 base stations. The network will cover more than 100 Chinese cities and more than 500 million potential users, roughly 37.2 percent of China's population.

With more than twice as many subscribers as the United States has citizens, China Mobile represents a massive opportunity for Apple. The iPhone maker has increased its focus on China in recent years, as the world's most populous country recently surpassed the United States to become the world's largest smartphone market. Apple CEO Tim Cook has taken multiple trips to China, most recently meeting with China Mobile in order to find a way to bring the iPhone to its network.
post #2 of 14

I thought Samsung already had the Chinese market sewed up. Why do they need to build out their 4G network if Android already dominates?

post #3 of 14
Quote:
Originally Posted by lkrupp View Post

I thought Samsung already had the Chinese market sewed up. Why do they need to build out their 4G network if Android already dominates?

Citation please.

post #4 of 14
Quote:
With more than twice as many subscribers as the United States has citizens, China Mobile represents a massive opportunity for Apple.

 

That, Sir, is a brilliant piece of writing! (No sarcasm intended) 1biggrin.gif

post #5 of 14
Quote:
Originally Posted by bleh1234 View Post

Citation please.

 

If you read it on the Internet it must be true. Don't you know that? Go to any Android site and they will tell you that Apple has lost China and that Samsung owns the country¡

post #6 of 14
Hmm… it was known they were finally going to start building out their TD-LTE but I assumed that any low-cost iPhone for China Mobile in 2013 would just ignore '4G' the first year since so few are using '3G' as it is and it would save money.

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #7 of 14
This news is bound to make AAPL drop steeply, along with the news South Korea is in peril of war. /s
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
Google Motto "You're not the customer. You're the product."
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From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
Google Motto "You're not the customer. You're the product."
Reply
post #8 of 14

Spending all that money?

 

Looks like desperation on China Mobile's part to me.

 

(that's the new word-of-the-day isn't it? "desperation"?)

 

Well, from the Reuter's original piece maybe a more accurate term would be "concern" about that slowing profit growth. and the rather direct "hoping to tap pent-up demand for Apple smartphones" is pretty straightforward, no qualifier such as "possibly" in sight. So a China Mobile spokesperson said that?

 

"HONG KONG, March 14 (Reuters) - China Mobile Ltd said it plans to spend 41.7 billion yuan ($6.7 billion) developing 4G technology this year, hoping to tap pent-up demand for Apple Inc smartphones as it gets an iPhone model that will finally run on its network.

The world's largest mobile carrier - with more than twice as many subscribers as there are people in the United States - already has more than 10 million of its customers owning an iPhone even though the gadget doesn't properly work with the Chinese firm's homegrown TD-SCDMA 3G technology, which is not compatible with global technologies.

That inferior technology, and the failure to offer customers an iPhone contract - which its main rivals do - has been a key reason for China Mobile's slowing profit growth."


Edited by jfc1138 - 3/14/13 at 9:50am
post #9 of 14
Quote:
Originally Posted by lkrupp View Post

I thought Samsung already had the Chinese market sewed up. Why do they need to build out their 4G network if Android already dominates?


This seems to be sarcasm that the others failed to detect, although I'm curious why Android would negate the need for 4G support.

 

 

 

Quote:
Originally Posted by SolipsismX View Post

Hmm… it was known they were finally going to start building out their TD-LTE but I assumed that any low-cost iPhone for China Mobile in 2013 would just ignore '4G' the first year since so few are using '3G' as it is and it would save money.

Not many of their subscribers use 3G?

post #10 of 14

In China, the Chinese brands names like Lenovo, Huawei and ZTE controls over 70% of the market. They are all offering high-end smartphones utilizing 4G speeds Samsung is actually fading in China, just like LG and HTC.
 

post #11 of 14
Quote:
Originally Posted by peter236 View Post

In China, the Chinese brands names like Lenovo, Huawei and ZTE controls over 70% of the market. They are all offering high-end smartphones utilizing 4G speeds Samsung is actually fading in China, just like LG and HTC.
 

 And I must say, the Lenovo K900 is a sick looking phone.  1080p screen, dual-core Intel processor with hyper-threading, , 13 MP Camera, and all aluminum body...  

 

The Chinese brands in general are stepping up their game, it may not even matter to China mobile whether or not they get the iPhone...

post #12 of 14
Here is an idea! Apple has the cash outside of US. Instead of bringing that money back to US or pay those special dividends or buy Netflix (as that idiot on CNBC keeps mentioning), invest that money in China mobile and pay for that network upgrade - it would be much better use of that $10billion in cash. So now you have access to that 750 million customer and Apple can kick some serious Samsung butt. It is a win-win-win situation!
post #13 of 14
Quote:
Originally Posted by radster360 View Post

Here is an idea! Apple has the cash outside of US. Instead of bringing that money back to US or pay those special dividends or buy Netflix (as that idiot on CNBC keeps mentioning), invest that money in China mobile and pay for that network upgrade - it would be much better use of that $10billion in cash. So now you have access to that 750 million customer and Apple can kick some serious Samsung butt. It is a win-win-win situation!

 

There's some pretty strict rules when it comes to foreign investors investing in mainland Chinese companies...  Besides, in general, there's plenty of capital to go around within China, and I don't think China mobile is strapped for cash either...

post #14 of 14
Quote:
Originally Posted by Mikeb85 View Post

 

There's some pretty strict rules when it comes to foreign investors investing in mainland Chinese companies...  Besides, in general, there's plenty of capital to go around within China, and I don't think China mobile is strapped for cash either...

 

I am not questioning China Mobile needing the capital nor concern about capital within China. The point was about all the the Wall Street wanting Apple to give heir money back and the point here was making a better use of the money instead.

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