The number of active subscriptions to mobile and PHS services in China  exceeded half a billion at the end of 2Q06 according to research released by Informa Telecoms & Media’s World Cellular Information Service  (WCIS). This means that the market has more than doubled in size since the end of 2002 and now accounts for almost half of all subscriptions in the Asia-Pacific region. Of the more than half billion active accounts, 410mn are cellular subscriptions (split approximately 2/3 to 1/3 between China Mobile and China Unicom) and 91mn are limited mobility PHS subscriptions (split approximately 2/3 to 1/3 between fixed-line operators China Telecom and China Netcom). The two fixed-line operators are both hoping to offer full mobility services from 2007 or 2008 once 3G licences are issued in China . Meanwhile, growth in the Chinese cellular market is stabilising. Informa’s China Analyst Tingting Liu comments “although subscriptions are forecast to exceed the 600mn mark in early 2008 before the opening of the Olympic Games, growth thereafter is forecast to slow.”
GSM is the dominant technology, while Unicom’s CDMA operation is struggling to maintain market share (growing at a rate of fewer than 1mn subscriptions per quarter in the year to end-June 2006, this compares with a growth rate for GSM averaging more than 15mn per quarter). CDMA growth was slower than the rate of PHS growth, which averaged more than 3mn per quarter over the year.

PHS growth is slowing, however, under competition from China Mobile, which has cut its tariffs by up to 50% in some areas to bring them in line with PHS tariffs. China Telecom and China Netcom have also scaled back their investment in PHS in anticipation of the need to channel large funds into 3G network development.
www.informa.com