Strong Subscriber Growth in China As 600 Million Mark Beckons
The number of Chinese mobile customers looks set to pass 600m before the end of the third quarter, having reached 583.96m at the end of June. There were 8.64m net additions in June, meaning that every month of 2008 so far has seen raw growth in excess of 8m; in fact, the average monthly increase is only just short of 9m.
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Monthly Customer Growth, 2006 – 2008
The total gain in the first half of 2008 was a massive 53.52m, a figure which is larger than the total customer base of France.
China Mobile is the country’s dominant operator with 413.19m customers at the end of June. This equates to a market share of 70.8%, up 2.5pp year on year. China Unicom, meanwhile, finished the month with 170.77m customers and market share of 29.2%, a 2.1pp annual decline. (The discrepancy is accounted for by China United Telecom, which was merged into Unicom in December 2007.) While China Mobile only uses GSM technology, over a quarter of Unicom’s customer base uses CDMA, although the proportion fell by 1.0pp year on year to 25.3%. In total, there were 43.17m CDMA customers at the end of June compared to 540.79m GSM. This gave CDMA 7.4% of the total market at the end of June, down from 8.2% a year earlier. CDMA growth does appear to be slowing: June net additions totalled just 16k, and the first half of 2008 has seen a gain of just 0.41m, compared to 3.33m in the latter half of 2007.
Given the fact that CDMA tends to be dominated by contract rather than prepaid, Unicom has a far higher proportion of contract customers than its rival. At the end of June, 61.9% of Unicom’s customers had contracts, and this proportion is fairly stable with a year-on-year decline of just 0.1pp. China Mobile, meanwhile, is prepaid-dominated, with just 17.5% of its customers on contracts at the end of June. Moreover, the contract proportion declined from 20.1% a year earlier.
What is perhaps most impressive about the Chinese market is that proportionate monthly customer growth has not dipped below 1.5% so far this year. In fact, each month of 2008 so far has outpaced its 2007 counterpart in terms of proportionate growth. And with penetration at just 43.9% at the end of June, the best may be yet to come.
Posted to the site on 24th July 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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