The Chinese wireless market is heating up. Recently issued 3G government licenses and plans for massive infrastructure construction over the next three years have created an appealing ecosystem for investment.
However, the sheer size of the endeavor and increased phone subsidies by Chinese carriers are significantly cutting into short-term profits. China Telecom, China’s largest fixed-line carrier, yesterday reported a 96 percent decline in profits this year.
China Telecom, however, isn’t backing down. Concurrent with its disappointing earnings, the company announced plans to invest $6.88 billion to expand its network.
In a briefing yesterday reported by Bloomberg Press, China Telecom Chairman Wang Xiaochu said the investments may help China Telecom offer wireless services to more than 300 cities by July 2009.
The research firm CCID analyzed the vendors helping to roll out China’s 3G network. ZTE led the pack with a 29.3 percent share of the market contracts, followed closely by Huawei at 21.9 percent.
Alcatel-Lucent, which the CCID report showed taking 6.8 percent of the market, was recently picked by China Unicom to deploy 3G W-CDMA networks in 14 Chinese provinces. The contract was secured through Alcatel-Lucent Shanghai Bell.