Qualcomm Inc (QCOM)

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China Mobile Posts Record Signups on Holiday Sales (Update2)
Feb. 20 (Bloomberg) -- China Mobile (H.K.) Ltd., the world's biggest mobile-phone company by users, added a record number of customers last month, as holiday-season sales helped it take a bigger share of new subscribers than China Unicom Ltd.

China Mobile added 2.5 million users in January, boosted by ``short-term'' subscribers who signed up during the Lunar New Year holiday, the Hong Kong-based company said. City workers who visit families in rural provinces often purchase pre-paid cards to save on payment for long-distance calls.

``China Mobile's strong numbers took me by surprise,'' said Kelvin Ho, an analyst at Nomura International (H.K.) Ltd, who said he was expecting 2.2 million additions. ``The company is apparently gaining share of new users from Unicom, which has slowed marketing and promotions.''

China Mobile and Unicom have cut prices to compete for customers in China's $30 billion cellular market, the world's largest by users. One in five people has a cell-phone account in China, compared with two in three in Japan, and operators' combined new subscriptions are rising at a rate of 2 every second.

Unicom said it signed up 2.1 million users last month. Excluding nine newly acquired provincial networks, the company added 1.86 million, the smallest increase in four months.

Excluding the new networks, China Unicom took 43 percent of the new signups between the two companies last month, falling from an average 47 percent for all of 2003.

Network Loss

Shares of China Mobile were unchanged at HK$27.10 by the midday trading break in Hong Kong. Unicom's stock fell 0.5 percent to HK$9.95.

China Mobile had 144.1 million users at the end of January in the 21 provinces it serves. All China Mobile customers use its global system for mobile communications service, based on the nation's dominant wireless standard.

Unicom provides service that uses code division multiple access technology, developed by Qualcomm Inc., in addition to services based on GSM. Its CDMA network posted a pretax loss of 570 million yuan ($69 million) in the first nine months of last year, offsetting profit from its GSM operations.

The company is trying to end losses at the two-year CDMA service by reducing use of handset subsidies.

Last month, Unicom signed up 1.1 million customers to its CDMA service, for a total of 20 million. Its GSM network attracted 982,000 subscriptions, for a total of 73.6 million.

January's numbers included for the first time users in nine provincial networks Unicom acquired from its state-owned parent in November. The purchase gave Unicom nationwide coverage except for the southern province of Guizhou.

China is the world's largest wireless market with 269 million subscriptions at the end of last year, according to the Ministry of Information Industry.


To contact the reporter on this story:
Kenneth Wong in Hong Kong at [e-mail]

To contact the editor for this story:
Charles Bickers in Tokyo at [e-mail]
Last Updated: February 20, 2004 00:28 EST

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