China Mobile has revealed that less than 3 percent of new mobile customers acquired this year are using its new 3G network, suggesting that the TD-SCDMA network is suffering from a lack of compatible devices. According to a PC World report, which cites a recent China Mobile filing with the US Securities and Exchange Commission (SEC), the operator had 746,000 subscribers on its 3G network by the end of May, representing just 2.4 percent of total net additions at the operator since the launch of the new network on 7 January. The total number of China Mobile subscribers grew from 457.3 million to 488.1 million during the first five months of 2009, an increase of 6.7 percent, or 30.8 million subscribers. China Mobile is the world's largest operator in terms of subscribers. China Mobile admitted in the filing that it has "encountered and may continue to encounter challenges in the deployment of our 3G services, which could have a material adverse effect on our financial condition and results of operations as well as our revenues and profitability."

 

Slow take-up of its 3G services are deemed due to the relative immaturity of the TD-SCDMA standard compared to competing standards such as WCDMA, which is used by the majority of the world's 3G mobile operators, including China Mobile's closest domestic competitor, China Unicom. According to the SEC filing, China Mobile is counting on dual-mode handsets that support both TD-SCDMA and GSM to help spur more demand for its TD-SCDMA services by allowing users to upgrade to 3G services without having to change their mobile number. It is also planning to market laptops with TD-SCDMA data cards and home Internet access gateways to attract more 3G subscribers. The company is listed in Hong Kong and the US, where its shares trade as ADRs (American depository receipts) listed on the New York Stock Exchange, making the company subject to regulation by the SEC.

 

Lisa