Mobile industry driving growth in China

Recent figures from released by China's Ministry of Industry and Information Technology (MIIT) reported that mobile and data telecoms in China is still booming. The report said that revenues for the mobile sector were CNY 373 billion ($54.2 billion) in the first 10 months of 2008, up 15.7% on the same period in the previous year. Data revenues in the same period were CNY 66 billion ($9.6 billion), a year-on-year increase of 38%.

The total volume of telecoms business, including infrastructure investments, rose to  CNY1.85 trillion ($269 billion) in this period, a whopping 22.5% compared to 2007. Further infrastructure investments are expected next year as mobile operators roll out their nationwide 3G networks.

Overall telecoms service revenues in the period January-October 2008 were CNY 680 billion ($98.9 billion), a year-on-year increase of 8.1%. Pulling down the revenue figures are the results from the fixed-line and long-distance phone markets, which were actually down 7.9% and 6.1% respectively in the year. Together these two markets make up around 30% of the total telecoms market. Data communications is the fastest growing telecoms sector reflecting China's new leadership in the broadband market, but it currently only makes up 9.7% of total service revenues.

There is clear evidence of fixed mobile substitution in the MIIT report's details of new subscribers. While nearly 80 million new mobile lines were added in the first 10 months, over 14 million fixed lines were terminated. The process might even be accelerating, with 3.2 million new mobile users in October 2008 alone and a decline of 1.7 million fixed line users in the same month. Numbering 627 million, there are now almost double the number of mobile subscribers to the 351 million fixed line users in China.