China Mobile’s Profits Fueled By 4G Boom
China Mobile, the world’s largest wireless service provider, has been working feverishly over the last two years to roll out an ambitious new 4G network in China. Its efforts have paid handsome dividends, as its Q2 results attest. Profits jumped 9.1% to nearly $5.5 billion during this period, cementing China Mobile’s status as the dominant Chinese telco, over its rivals Unicom and China Telecom.
While all three of China’s state-owned telcos have begun to transition into 4G, China Mobile enjoyed a head start having been granted a 4G license by the Chinese government a full year before any of its competitors. That being said, Light Reading notes that China Mobile’s successes in light of the fact that it deploys the TDD variant of 4G, which is uncommon compared to the FDD variants that Unicom and China Telecom have opted for. China Mobile also saw increased revenue from its data services.
Over the first half of this year, its operating revenues have grown 7.1% to $55.8 billion and China Mobile has fended off domestic rivals to garner another 116 million 4G subscribers, bringing its total up to 428 million. This means that well over half of its 837 million subscribers, a staggering sum in its own right, are paying for 4G service. Beyond having customers switch to more lucrative 4G subscriptions, China Mobile snagged nearly 11 million new customers during the first half of 2016.
Nokia Agrees to Help China Telecom with LTE Infrastructure
The Finnish telco vendor Nokia has inked an agreement with state-owned telco China Telecom, one of the biggest in China, to help expand its LTE footprint by deploying 4G architecture in 19 provinces of China. The base stations it has agreed to install will help increase throughput and coverage while enhancing quality of experience.
China Telecom is embroiled in fierce competition against China Mobile, whose 4G plans have been met with immense success, to win 4G subscribers as more and more suburban and urban Chinese users begin demanding ubiquitous 4G connectivity. China Telecom currently has 207 million subscribers with just under half of them (90 million) paying for 4G.
The 19 provinces in which Nokia will be installing its Flexi Multiradio 10 base stations are Shanghai, Jiangsu, Zhejiang, Hunan, Shandong, Hubei, Guangxi, Fujian, Jiangxi, Shanxi, Hebei, Henan, Heilongjiang. Sichuan, Anhui, Liaoning, Guizhou, Xinjiang, and Inner Mongolia.
Beyond installation, Nokia has agreed to provide associated services including project management, network design, hardware and software maintenance services, and optimization.
By expanding its LTE infrastructure, China Telecom is not only anticipating exponential growth of 4G data traffic, which will account 90% of mobile data traffic by 2017, it is also paving the way for Voice over LTE service in 2017.
Foxconn Finalizes $3.81 Billion Acquisition of Sharp
The Taiwanese electronics manufacturer Foxconn has acquired Sharp Corp., shelling out $3.81 billion for a 66% stake in the company after receiving approval for the deal from China’s anti-monopoly regulatory agency, The Wall Street Journal reports. As part of the transition, Sharp CEO Kozo Takahashi will be replaced by Tai Jeng-wu, who is known as Foxconn CEO Terry Guo’s right hand man.
Sharp, a century-old Japanese electronics company, struggled with big losses earlier this year and has seen its popularity fade over recent years. Its shares rallied by 19% however, after investors learned that the takeover had been approved and that Sharp would be receiving a $3.81 billion cash infusion. Sharp has undergone two major bailouts in the last four years and came close to bankruptcy in 2012. Though its display panel business is robust, Sharp struggled to compete against South Korean and Chinese rivals in the consumer electronics business, which it was once well-known for.
Foxconn, on the other hand, sees a clear opportunity to expand its business with Apple. Sharp’s liquid crystal display division which produces some of the expensive displays that go into the iPhone. Foxconn, which is a major iPhone manufacturer and assembler, allowing it to sell yet another component to Apple. This may in turn help Apple drive down production costs to provide iPhones at lower rates in emerging markets such as India where Apple has been taking a beating from better-priced competitors. It also provides Foxconn with an opportunity to branch out into other consumer electronics under the Sharp brand.
Foxconn also acquires Sharp’s organic light emitting diode (OLED) unit, which provides clearer images and greater energy efficiency than LCDs. While South Korean manufacturers currently lead in OLED development, the Taiwanese manufacturer may have plans to compete to provide OLED displays to Apple for upcoming iPhones and iPads. Still, Foxconn has its work cut out for it, not only given Sharp’s $3 billion in liabilities but also the stark difference in corporate cultures.
China Mobile and Ericsson Conduct First 5G Drone Test
Scandinavian telco vendor Ericsson and China Mobile have collaborated to conduct the world’s first trial of a 5G drone prototype, which may set the stage for a low latency, distributed 5G network. The drone may be deployed in low latency situations, provided that the network operator can reliably support them, in order to provide emergency services, according Ericsson.
The trial occurred in Wuxi, in China’s Jiangsu province, where the drone flew through multiple handovers across multiple sites, in which commercial mobile phone users were active. China Mobile, which has worked with Ericsson since 2010, provided the cellular network that supported the entire mission.
“With commercial implementation expected from 2020, Ericsson’s 5G research is coming out of the labs and into live test networks,” said Chris Houghton, Head of Region Northeast Asia at Ericsson. We see tremendous opportunities in 5G, and we are mobilizing the ecosystem and collaborating with industry leaders such as China Mobile to help make 5G a reality.”
“China Mobile join hands with Ericsson on research and trials of 5G key technologies, leveraging China Mobile’s 5G joint innovation center as the platform,” said Huang Yuhong, Deputy Head of the China Mobile Research Institute. “Both companies target to explore the 5G possibilities in vertical industries and new use case scenarios, and together drive towards 5G commercial capability in 2020.”
One of the stated goals of the undertaking, according to Ericsson, is to optimize latency for mission critical use cases, using an aerial 5G-enabled drone to distribute part of the network to the cellular edge: “The drone trial is therefore an important step toward 5G networks in which part of a network can be distributed and dynamically deployed at the cellular edge in order to reduce end-to-end latency, and to serve a range of 5G use cases at the same time.”