A major bid to gain market share in China's emerging 3G phone market has been launched by China Telecom. Bottom line is a 3G handset retailing for US$73 - at a time when some China Telecom 3G handsets sell for US$438.
China's 3G licences were issued in January this year. One of the successful licence-winners, China Telecom, found itself at a disadvantage as its competitors, China Unicom and China Mobile, were far more used to the mobile handset market. China Telecoms' strategy has unravelled over the last eight months to offering 3G handsets at extremely low prices.
China Telecom will now be selling 3G phones at a starting price of US$73 each; up until now a 3G-compatible handset from the company has retailed for up to US$438. Received opinion among telecoms analysts is that these low-cost handsets, geared towards a broad consumer base, represent the only way that China Telecom can build market share.
China Telecom has even ordered the phones on a broad base; 31 firms, and not all of them Chinese, will supply 4 million handsets. Samsung of Korea is one of the suppliers, along with more locally based ZTE Coolpad. Within the product ranges, there will be 63 models. While they will mainly be priced at around US$146, the cheapest will retail at US$73.
Other 3G operators have been busy placing their own orders, for example, China Mobile, which has placed an order for handsets with Taiwan's HTC to receive HTC to develop at least one Ophone model this year and six others in 2010. Again looking at comments by telecoms analysts, lack of 3G handsets has been a key hindrance to the exploitation of 3G by its current operators in China.
A blunt analysis of China Telecom's aspirations is that while this July saw the seventh month of continuous subscriber growth, with 2.45 million customers singing up in that month alone, the company target of 100 million subscribers by 2011 is over-optimistic.