GigaOM » China Telecom

Liberty buys Virgin, creating largest broadband company outside China

David Meyer — Wed, 06 Feb 2013 10:08:19 +0000

The cable giant Liberty Global has bought UK-based Virgin Media in a cash-and-stock deal worth $23.3 billion, creating what they claim is “the world’s leading broadband communications company” with 25 million customers across 14 countries.

That “world’s leading” tag is debatable, as China Telecom claims more than 90 million broadband subscribers, but this is nonetheless a big deal, taking the combined operation way past the likes of Comcast (18.7 million subscribers). The operation will focus on “the strongest and most strategic markets in Europe”, delivering the triple-play hit of broadband, telephony and digital TV while also pushing mobility and B2B products.

Liberty Global CEO Mike Fries said in a statement:

“Adding Virgin Media to our large and growing European operations is a natural extension of the value creation strategy we’ve been successfully using for over seven years.

“Virgin Media will add significant scale and a first-class management team in Europe’s largest and most dynamic media and communications market [the UK]. After the deal, roughly 80 percent of Liberty Global’s revenue will come from just five attractive and strong countries — the UK, Germany, Belgium, Switzerland and the Netherlands.”

Europe is such a strong focus for the combined company that Liberty Global will “redomicile” from Delaware to the UK, although its headquarters will stay put. The company will continue to be Nasdaq-listed, although it may list on a European stock exchange as well. Virgin will hang onto its brand.

The implications of this deal could be wide-ranging. It will certainly bolster Virgin’s chances in the UK pay TV market against Rupert Murdoch and BSkyB.

Virgin also has a very good hybrid cable/fibre broadband network in the UK that was created out of the merger of NTL and Telewest half a dozen years ago. John Malone’s Liberty, previously a major shareholder in Telewest, had itself tried and failed to execute such a merger, so today’s deal is the culmination of a long-term ambition.

At the same time, it also seems to be about taking advantage of Virgin Media’s tax losses and low interest rates, according to sources referred to by the Financial Times.

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China could get iPhone 5 by the end of November

Erica Ogg — Fri, 09 Nov 2012 17:54:17 +0000

Apple CEO Tim Cook said at the company’s most recent earnings call that the iPhone 5 would arrive in China before the end of this year. But on Friday, China Telecom’s chairman gave a little more information to the Wall Street Journal, and the device might even be ready for sale in the country by the end of this month.

China Telecom Chairman Wang Xiaochu said “the phone should be by early December if not sooner,” according to the WSJ. The uncertainty is due to the device winning regulatory approval in China. When it will pass inspection is still up in the air. Chairman Chang Xiaobing, of competing carrier China Unicom, wasn’t as assured his carrier would be selling the device in 2012. He told the Journal, ”We hope to offer it this year, but what I say doesn’t matter.”

The iPhone 5 debuted in late September and is now available in 32 countries — the fastest and broadest roll out of an Apple product yet.

The earlier it arrives in China, the better for Apple. China is a hugely important market to Apple — huge throngs of buyers are likely to turn out, as they did for the iPhone 4S last January. Getting those China iPhone sales in before the close of the books of the current fiscal quarter is likely to offer a nice boost for overall iPhone sales for Apple to report to investors.

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Nokia’s 1 billion opportunity: A China Lumia launch

Kevin C. Tofel — Fri, 16 Mar 2012 14:47:03 +0000

Nokia is expected to launch its Lumia smartphone line in China on March 28, according to multiple reports. DigiTimes says that China Unicom, China Telecom and China Mobile will all sell Nokia Lumia handsets; combined, these three operators have nearly 1 billion subscribers. That’s a huge opportunity both for Nokia and for Microsoft, which developed the Windows Phone platform Nokia now uses on new smartphones.

DigiTimes says its information has come from industry sources, but its report follows a similar one from Tech In Asia. Nokia CEO, Stephen Elop, told a Chinese news agency that the first Lumia phone would be available on the 28th of this month. Elop didn’t provide any details of which model or models would be available at that time. However, the Lumia 800 and 719C were reviewed and approved for sale in China by the country’s telecom inspection unit, according to Tech In Asia.

Although there hasn’t been an official Lumia launch date provided, it shouldn’t surprise that Nokia will be pushing its product hard in China. As noted yesterday, China is expected to supplant the U.S. as the world leader in smartphone shipments by the end of this year. India and Brazil, too, are moving up the list as mobile broadband infrastructure matures. Given Nokia’s broad global distribution and worldwide brand recognition, I’d expect Lumia handsets to find their way to those countries soon as well.

Launching relatively low-cost but highly capable smartphones in populous countries could be a boon to Nokia, which has faced sales declines and increased competition from the iPhone and Android handsets. But it could bring even more benefit to Microsoft. The company has tried to start over with its mobile platform, launching the first Windows Phone devices in 2010, but hasn’t yet gained much of a foothold in the smartphone market.

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Apple gets China Telecom, but China Mobile still out of its grasp

Erica Ogg — Tue, 21 Feb 2012 14:28:54 +0000

Apple’s iPhone 4S will arrive very soon on China Telecom, China’s third-largest carrier. The phone will be available for sale starting March 9. It’s an important step for Apple, which has highly prioritized its business in China, but the number of customers it will reach on that network will pale in comparison to the roughly 650 million Apple could reach by striking a deal with China Mobile.

The China Telecom deal has been in the works for a while. Last month it was reported that only the final steps for the phone to be certified to run on the network remained, and that the deal would be finished by the end of February. By offering the iPhone 4S — of which Apple has sold 37 million units in just three months — to China Telecom’s 15 million customers, Apple stands to add to its already impressive tally for number of iPhone 4Ses sold.

But more importantly, by adding yet another carrier, Apple is moving closer to more fully addressing its second-most important market in the world. It already has China Unicom, where one out of every five of the carrier’s subscribers have chosen the iPhone, according to Morgan Stanley’s Katy Huberty.

The big “get,” however, is China Mobile, which has a 70 percent share of mobile customers in China. The two sides have been talking, but there are still some technical hurdles. Considering how important China is to Apple, it seems like Cupertino would find a way to iron those out eventually.

Apple CEO Tim Cook has been very clear about his commitment to the country and has said he’s “never seen a country with as many people rising into the middle class aspiring to buy products that Apple makes. It’s an area of enormous opportunity.”

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Report: China Telecom Will Finally Get The iPhone 4S In February

Ingrid Lunden — Wed, 01 Feb 2012 17:13:24 +0000

Another piece in Apple’s worldwide expansion looks like it might at long last be coming into view: the leading CDMA operator in China, China Telecom, says that it will start to sell the iPhone 4S by the end of this month or early March.

The report, from the English-language China Daily, says that China Telecom released a statement this week that said it was beginning “preparatory work” to launch the iPhone 4S — the first time that China Telecom would offer one of Apple’s smartphones.

China Telecom has been talking of an iPhone launch for some time now, touting Apple’s work on a CDMA-based device even before the company launched its first non-UMTS handset with Verizon last year. It seems that the big holdup has been getting the right operating licenses for the device. There are three, and they have apparently now all been secured.

If China Telecom does indeed get the device in the next month, it will make it the third CDMA operator to carry the iPhone, after Verizon Wireless (NYSE: VZ) and Sprint (NYSE: S) in the U.S.

Pricing details for the device have not been disclosed but given how iPhone-crazy the Chinese public appear to be, this will probably kick-off a price war for the device — although the carriers’ offerings will likely still come at a premium compared to the cheap knock-offs that one can buy in the country.

The race for 3G subscribers is actually quite close in China: At the moment, the only carrier with the official right to sell the iPhone on its network is China Unicom, the second-largest operator after China Mobile; China Telecom ranks third. Among those, China Unicom is the fastest-growing, thanks in part to the success of the iPhone. Among the three of them, China Mobile still has the most 3G subscribers, with 51.2 million; China Unicom has 40 million; China Telecom has 36.3 million.

The move to add China Telecom as a carrier partner will also make a big difference to Apple’s exposure in the country. China Daily, citing figures from Gartner, notes that Apple (NSDQ: AAPL) currently is the fourth-largest smartphone vendor in the country, trailing behind Nokia (NYSE: NOK), Samsung and Huawei.

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China Telecom could offer the iPhone as early as February

Darrell Etherington — Tue, 31 Jan 2012 16:24:00 +0000

China Telecom is getting very near to launching Apple’s iPhone 4S on its network, the carrier said in a press release Tuesday obtained by China Daily. China Telecom subsidiary Beijing Telecom said a CDMA version of the iPhone 4S will likely be available to its customers by the end of February or the beginning of March.

Apple has been taking preparatory steps in advance of a launch with China Telecom, China’s third largest mobile network operator. Earlier in January, Apple secured regulatory approval to sell a device in China that operates using the CDMA2000 network standard, which is the technology China Telecom uses for its 3G network. At the time, the only step remaining for Apple was to get a license from China’s Telecommunications Equipment and Certification Center to begin selling the device, which it gained on Monday this week.

Earlier this week, Morgan Stanley’s Katy Huberty predicted Apple could grow its iPhone sales by as many as 57 million units in China over the next two years if it succeeds in securing partnerships with China Telecom and China Mobile. China Telecom will offer Apple a potential subscriber pool of roughly 15 million high-end subscribers according to Morgan Stanley’s numbers, approximately doubling its current reach through official partner China Unicom.

The deal hasn’t yet been confirmed by Beijing Telecom’s parent company beyond the report from China Daily, and no pricing details have been released, but the pieces are in place, and there’s little reason to suspect Apple wouldn’t want to expand its presence in China as quickly as possible. No doubt a partnership with China Mobile, which reaches 650 million subscribers and has around a 70-percent share of the Chinese mobile market, is also a priority, but technological factors likely precludes official iPhone support until Apple creates a version specifically for China Mobile’s network.

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China set to surpass 1 billion mobile connections

Kevin Fitchard — Thu, 19 Jan 2012 19:30:44 +0000

China is closing in on the 1 billion mobile connections mark, which it will likely surpass before the end of March, according to a new Wireless Intelligence report. China has always been a world power in wireless, but its importance is poised to grow further as its huge population is now embracing mobile data services.

China has long been the largest single market for subscriber growth, but that growth was mainly driven by low-end devices and voice services. Now that all threes of China’s major operators — China Mobile, China Unicom, and China Telecom – have launched 3G networks, smartphones and other mobile data devices are proliferating. 3G connections surpassed 200 million at the end of 2011, which is still only a fifth of China’s total subscribers, but 3G devices account for 80 percent of all new sales, according to the report.

Demand for smartphones is huge, as evidenced by the unruly crowds that formed at Apple’s stores last week for the launch of the iPhone 4S with China Unicom. In October, Apple said China had become its most important market outside of the U.S. for all its products. China Unicom is also diversifying into Android using Google’s platform to feed the growing demand for cheap smartphones. Wireless Intelligence said Unicom estimates it will sell 90 million low-cost smartphones this year in addition to 60 million high-end device like the iPhone.

To put those numbers in perspective, wireless trade organization CTIA reported that in June the U.S. had 322.9 million connections, which already exceeds the U.S. population. According to China’s last census, its population numbered 1.3 billion, which means it still has plenty of room to grow. If China’s huge rate of smartphone adoption continues, the U.S. will could wind up playing second fiddle to China on the wireless global stage.

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Apple poised to double potential iPhone market in China

Darrell Etherington — Tue, 10 Jan 2012 14:22:34 +0000

Apple is one step closer to nearly doubling its potential iPhone subscriber base in China, thanks to a new regulatory approval it secured in that country this week, according to Bloomberg. Apple now has official permission from the China Radio Management Office to offer a handset that operates on the CDMA2000 network standard, which is used by the third-largest Chinese carrier, China Telecom.

China Telecom would be the second iPhone carrier in China, joining the country’s second-largest network provider China Unicom. China Telecom would add a potential buying audience of 33.4 million mobile subscribers to China Unicom’s network of 36.5 million users. All that remains is that Apple secure a license from China’s Telecommunications Equipment and Certification Center prior to offering the device for sale.

Apple wouldn’t need to do much to offer the right hardware for the network; China Telecom uses a 3G CDMA2000 network, based on the same standard as Verizon’s mobile 3G network in the U.S. Adding the carrier officially would not only expand Apple’s reach, but also help it win back more legit channel sales from the gray market: Gartner analyst Sandy Shen told Bloomberg that as authorized sales outlets become more widely available, gray market sales dwindle.

Apple may soon face entirely different challenges in China, however, especially if it rapidly scales its potential iOS user base in the country. Recent reports indicate Apple is currently being sued by a group of Chinese writers over allegations that pirated books are being offered for sale on the App Store. The group has asked Apple to remove the books, but so far, the iPhone-maker has refused. The group plans to file another lawsuit on behalf of more authors soon, and says the problem has become rampant. The group is only seeking around $1.2 million USD in damages for this first suit, but in the long term, Apple could alienate content providers and invite continued legal trouble by ignoring the problem.

As China becomes more central to the future of Apple’s mobile market, the company will likely have to come up with new ways to address these and other unique challenges. We’ve seen that localization is key when it comes to making apps successful in Asian App Stores, so it would make sense that Apple may eventually want to set up more localized operations for dealing with Chinese App Store content as well, especially given the recent move to make the Chinese App Store open to payments using local currency.

It looks like we’ll soon see China’s iPhone use explode, above and beyond the impressive growth it’s already posting in that country. Don’t be surprised if Apple pumps up its local operations as well.

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Meet Europe's (And The U.S.'s?) Newest Mobile Operator: China Telecom

Ingrid Lunden — Wed, 04 Jan 2012 19:19:38 +0000

China presents one of the single biggest opportunities for mobile companies looking for more growth, and it’s no surprise that companies like Apple are doubling down on their investments there. But similarly, Chinese mobile players are looking at ways of exporting their products and playing on their brands abroad, and it’s not just device makers like Huawei and ZTE leading the charge. The latest: state operator China Telecom, which today announced a new consumer mobile service in the UK, its first outside the mainland.

China Telecom will be starting a new mobile service as an MVNO in partnership with Everything Everywhere, the joint venture between France Telecom’s Orange and Deutsche Telekom’s T-Mobile in the UK. That means that while China Telecom will operate the service, including all customer and billing management, it will be doing so on network infrastucture owned by the two UK operators.

According to the FT, this will be only the beginning: China Telecom’s subsidiary China Telecom Europe is understood to also be looking to launch similar services in France and Germany; and is also looking for a similar MVNO launch in the U.S., where it already has a deal for business customers with AT&T (NYSE: T) — although in wireless the two work on different networks.

For Everything Everywhere, the deal is another signal of how the JV is looking to beef up its wholesale offerings at a time when the UK retail market remains competitive: In October Everything Everywhere reported that it had 27.5 million customers, a decline of 1.4 percent on the year before but still representing a growth in revenues and the more lucrative contract subscriber base. The operator now has 24 MVNOs on its network.

The China Telecom MVNO, due to launch sometime in Q1 2012, will very much play on China Telecom’s brand recognition among Chinese living and visiting the UK, who will be the first target customers for the service. China Telecom is China’s biggest fixed-line operator, with just under 170 million subscribers, as of November 2011. In mobile it reported 123.4 million subscribers, making it the third largest behind China Mobile and China Unicom, but still among the very biggest in the world.

With that in mind, the idea of targeting only Chinese residents and visitors in the UK and the rest of Europe makes this a small-scale venture — almost too small for a company the likes of China Telecom. There are only an estimated two million Chinese living in Europe, with 600,000 of them in the UK. My guess: given the much larger scale that China Telecom normally works at, it’s likely that if this MNVO takes off, we might see a broader offering and marketing effort for the service.

It will be worth seeing how China Telecom faces up to the MVNO challenge. There are plenty out there already that are thriving, but they do so on a very low cost base because the margins can be very slim. Those MVNOs that have tried to enter the market with a costly splash — remember Disney (NYSE: DIS) and Helio? — have not fared as well.

China’s mobile market has thrived around new services related to mobile content, particularly since many use their phones rather than PCs to access the web. It will be worth watching how and if this comes into play, too — or whether this will simply be about cheap calls back home.

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The time is finally right for MVNOs in the U.S.

Colin Gibbs — Wed, 07 Dec 2011 22:00:39 +0000

The U.S. MVNO market is now largely a niche where a handful of companies provide phones and services on the cheap. But several notable new players are joining the space next year and will provide a different, more-specialized kind of service; network operators could benefit in a big way.

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