China Mobile Market Share Hits 70% As Growth Rate Continues on Upward Trend
China’s two mobile operators both reported first quarter results this week, which show an increasing divergence between the performances of the two businesses. China Mobile saw its monthly growth rate increase to over 2% in both February and March, taking the quarterly figure to 6.2% for Q1 08 - the best rate registered on an organic basis since Q2 02. In absolute terms this growth yielded net additions of 22.8m in absolute terms (excluding Hong Kong).
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China: Monthly Customer Growth by Operator, 03/07 - 03/08
Meanwhile, China Unicom has not seen a monthly growth rate above 1% since June last year. Whilst the 0.98% registered in March represented the third successive improvement in the rate, this was coming from a record low of just 0.86% growth in December, after discounting the one-off gain relating to the acquisition of Unicom Guizhou.
Nevertheless, quarterly growth for Q1 08 ended up at 2.80%, which was at least an improvement on the 2.72% recorded on an organic basis in Q4 07.
The result of the divergent performances of the two operators was further increased market share for China Mobile, which achieved a market share of 70% for the first time in six years (the combined market share of CMHK and CMCC fell from 70.5% to 69.5% between Q1 02 and Q2 02). In terms of net additions, China Mobile claimed a share of over 83% in the first three months of the year - the highest share recorded since Q4 98.
One thing the two operators have in common is a declining ARPU, although the drop has been more severe at Unicom. China Mobile’s ARPU fell by 3.5% between Q1 07 and Q1 08, ending at RMB82 per month, despite 14% higher usage which raised AMPU to a record 481 minutes per month - more than double that seen five years ago. At Unicom, GSM ARPU fell by 5.3% year on year to RMB44 per month - barely half the spend seen at its larger rival - as usage was up just 2.2%.
CDMA ARPU fared even worse, off by 9% to RMB53, as here usage actually fell year on year by 7.4%. Overall, minutes of usage at Unicom stood at 240 per month in Q1 08, half the number seen at China Mobile, which explains the difference in ARPU: Unicom customers do not have a cheaper service than China Mobile customers they simply use the service less. In fact, in the GSM sector, China Mobile’s effective prices fell below those at Unicom for the first time ever in Q1 08, which almost certainly explains the further improvements in its growth rate.
Posted to the site on 30th April 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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