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Growth back on track as China Telecom records first gain

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Having seen monthly gains averaging 8.9m in the first six months of 2008, the Chinese market did not manage to post a figure above 7.9m in the second six months of the year. This was because of the impact of Unicom's sale of its CDMA network in July September, Unicom saw monthly declines in its CDMA base, presumably because its imminent sale reduced the need to attract new customers in October, China Telecom acquired the network and cleaned up the base, with a net loss of 13.3m and in November and December there were further losses to the CDMA base, presumably due to further rationalisation.

However, this clean-up process now seems at an end, with China Telecom gaining 1.02m customers in January to finish the month on 28.93m. China Mobile recorded a gain of 6.64m, its lowest figure since December 2007, and China Unicom added just 0.84m (compared to 1.43m in January 2008), but Telecom's performance meant that the total market gained just under 8.50m, the best performance since June 2008 and above the 8.44m recorded in January 2008.

In real terms, China Mobile remains the largest mobile operator in the country and the world with a base of 461.02m. This is equivalent to market share of 73.9%, up from 69.5% a year earlier. Unicom had 134.20m, and market share of 21.5%, down 9.0pp - mainly due to the sale of its CDMA network. Meanwhile, China Telecom had 4.6% of the market, slightly below the 4.7% it claimed at the end of October, its first month of operation.

The total market finished January with 624.16m customers. Barring any dramatic slowdown, it seems highly likely that the market will surpass 650m by the end of Q2 09, and it is possible that 700m will be reached by the end of the year. GSM dominates the market, with 95.4% of the total at the end of January, or 595.23m in real terms.

China: Monthly Net Additions

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