T-Mobile is the last major carrier in the U.S. not to have the iPhone — a consequence of the device’s radio chipsets being different from those that work on T-Mobile’s 3G network. The operator seems resigned to this fact, but things could be different if it looks east to China, and takes guidance from that country’s largest wireless carrier, China Mobile.
Like T-Mobile, China Mobile has not been able to offer the iPhone on its network. There have been plenty of hints that Apple would be making a new device that would work on the same mobile data standard that China Mobile uses — a Chinese variant of CDMA called TD-SCDMA — but so far, no dice.
It turns out, however, that China Mobile has been heavily promoting and selling the iPhone 4 anyway. Its solution? Beefing up its WiFi network and selling it as a non-cellular service.
China Mobile has now signed up nearly five million iPhone 4 users in the last four months, according to this report in Bloomberg. Adding those to subscribers using the older iPhone, China Mobile now has around 9.5 million users of the device, and has more 3G subscribers overall than its rival China Unicom — 43.2 million versus 30.2 million. Unicom remains the only official iPhone carrier in China but does not disclose how many iPhone subscribers it has on its network.
The carrier sells the iPhone as a WiFi-only service, and offers users gift cards worth up to $441 (2,800 yuan), usable for either voice or data services, when they buy a device through a designated retail partner and pre-pay for 2,400 yuan worth of WiFi usage. (That, by the way, is a promotion it extends to other devices, too, including a Samsung Galaxy device, a Nokia (NYSE: NOK) Symbian handset, and devices from ZTE and Huawei.)
China Mobile has plans to add a further one million WiFi hotspots around the country over the next three years, writes Bloomberg.
The catch for China Mobile at the moment, it seems, is that they make far less money out of traffic on their WiFi network than they do on their cellular network. That could be one reason why T-Mobile, which itself has an extensive WiFi network in the U.S., has chosen not to go this route to promote data packages for the device. T-Mobile has said that it has more than one million people using unlocked iPhones on its network, although they are not able to access cellular data on the T-Mobile network.
On the other hand, by at least signing up iPhone users to its services, China Mobile could be laying the groundwork for those iPhone loyalists to migrate to compatible iPhones in the future: China Mobile has said that it is working with Apple (NSDQ: AAPL) to ensure that the company’s LTE iteration of the iPhone will work on China Mobile’s next-generation 4G network.
China presents a huge opportunity for mobile companies. According to October figures from the Ministry of Industry and Information Technology, the country had 952.31 million mobile connections, compared to just 288.43 million landlines; the mobile number is growing while the number of fixed lines is in sharp decline.
Within that, we are starting to see a growing number of China’s consumers turning to 3G as their main way of accessing the internet. In October, the number of 3G users passed the 100 million mark for the first time, at 102 million 3G subscribers. Of that, 43.16 million people are using China Mobile’s 3G standard. That means mobile data is slowly catching up to the number of fixed broadband connections, which currently stand at almost 150 million.