China's Mobile Data Gold Rush Begins

About a year ago, China issued 3G licenses to its three national carriers, causing bankers, technologists and communications equipment companies to drool over the potential hundreds of millions of Chinese who would rush to buy data plans, smartphones and applications. Today, iSuppli predicts that wireless data revenue in China will rise to $19.3 billion in 2009, up from $16.3 billion in 2008.

By 2013, iSuppli analyst Will Kong estimates, data revenue in the country will surge to $31.5 billion, which still puts it at less than half of the almost $45 billion network operators scored from selling wireless data in the U.S. in 2009, according to estimates from industry analyst Chetan Sharma. But China’s spending is still nascent and spread out among many more consumers, meaning it could eventually surpass the U.S. in data revenue.

But not anytime soon. Thanks to the adoption of faster broadband through a 3G network and better web-surfing devices such as the iPhone, Chinese carriers should see non-messaging service revenue (web surfing) reach $20 billion in 2013, up by a factor of three from $6.8 billion in 2008.

Kong said Chinese carriers in 2009 will spend about $6.3 billion on mobile infrastructure equipment, up 28 percent from 2008. Spending in 2010 will decline by 2.4 percent to $6.1 billion, which may be one reason Huawei is less optimistic about its sales growth for the coming year. During the next five years, carrier spending will continue to decline but will remain at a high level of more than $5.5 billion annually.

Image courtesy of Wikimedia Commons.