Bloomberg | January 19, 2011 | Edmond Lococo
Yolkie Sun’s addiction to Facebook Inc. cost China Mobile Communications Corp. a longtime customer.
Sun, who used China Mobile for 11 years, switched to China United Network Communications Group Co., parent of China Unicom, to access the social networking site. Her smartphone accesses the website through a virtual private network that can take three times longer to run on China Mobile.
“I can’t live without Facebook,” Sun, 23, said. “Lots of people use Unicom for the 3G because the Internet is very fast. China Mobile’s 3G is not as good.”
Defections such as Sun’s may cause the world’s largest mobile-phone company by users to lose market share even as the nation doubles its 3G subscribers this year. The Beijing-based company plans to more than triple its Wi-Fi hotspots this year so subscribers have another way to connect to the Internet, said Kelvin Ho, a Shanghai-based analyst at Yuanta Securities Co.
China Mobile may increase its number of hotspots to 1.1 million by year’s end from the 300,000 it had in June, he said. Its capital expenditures of 111 billion yuan ($16.8 billion) this year may be 13 percent above previous projections, he said.
‘Worried’ About Unicom
“They are more aggressive than before in terms of Wi-Fi rollout and coverage,” Ho said. “China Mobile is worried its higher-spending customers will turn to Unicom.”
China Mobile, the world’s largest phone carrier by market value, has the nation’s largest 3G user base with 18.8 million as of Nov. 30, compared with China Unicom’s 12.8 million, according to subscriber data. China Unicom is the only carrier offering Apple Inc.’s iPhone with a contract.
China Mobile’s 3G market share may drop to 40 percent this year from 44 percent last year, and China Unicom’s may rise to 33 percent from 31 percent, Donald Lu, a Beijing-based analyst for Goldman Sachs Group Inc., said in a Jan. 6 report.
China Mobile Chairman Wang Jianzhou said building out the Wi-Fi network is “the fastest way” to meet rising Web demand by phone users. The company started the expansion last year and will speed it up this year, he said.
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