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Was China Mobile's multi-billion-dollar investment in 3G a failure?

By Liang Jun (People's Daily Online)    08:23, March 15, 2016
Was China Mobile's multi-billion-dollar investment in 3G a failure?
(File Photo)

News that China Mobile plans to shut down some of its TDS base stations with less than 100 megabytes of daily traffic has circulated online recently. Some media reported that hundreds of billions of yuan invested in the stations will now be for naught.

Responding to this claim, China Mobile said to thepaper.cn that these reports are not true and the company has no plans to shut down low-traffic stations.

TDS, China's IP-based, internationally recognized standard for 3G, is the third generation of wireless mobile communication. 

In 2008, China Unicom and China Telecom got WCDMA and CDMA licenses respectively — both global 3G standards. Around the same time, China Mobile got its TDS license, making a commitment to construct and promote its own 3G standard. 

China Mobile has said that the TDS network is the world's largest single network, with over 230 million users. By 2012, the number of its 3G base stations exceeded 400,000.

It is estimated that by the end of 2014, a total of 188 billion yuan had been invested in TDS network construction. That amount, along with investment in terminal subsidies and marketing, means that a conservative estimate of the total investment is around 200 billion yuan.

However, due to its inferior network signal and failure to support high-end phones such as the iPhone, China Mobile has lost many customers in the 3G era.

The balance shifted with the issuing of 4G licenses in 2013. Data released in January of this year shows the total number of China Mobile subscribers at 830 million, out of which 335.6 million are 4G users. China Mobile plans to expand its base stations to 1.4 million by the end of 2016.

But what is the next step for 3G? In January of this year, China Mobile's 3G subscribers stood at about 163 million — a decline for the 11th consecutive month. The trend of 3G customers switching to 4G is very evident. 

Previously, a China Mobile researcher suggested that the way forward is to suspend TDS construction and all large-scale investment. China Mobile needs to ensure the stability of its network and persuade more subscribers to upgrade to 4G.

Since TDS base stations are difficult to upgrade directly to TD-LTE, China Mobile's investment in 3G may be hard to recover. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Liang Jun,Bianji)

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