The release of 3G licenses in China is spurring a wireless data boom, with national revenue from such services rising by 18.9 percent in 2009 and nearly doubling from 2008 to 2013, says iSuppli.

According to the research group, as the one-year anniversary of the issuance of 3G licenses in China approaches, wireless data revenue, including both messaging and non-messaging service, is set to rise to $19.3 billion in 2009, up from $16.3 billion in 2008.

By 2013, data revenue will surge to $31.5 billion, increasing at a Compound Annual Growth Rate (CAGR) of 14.1 percent from $16.3 billion in 2008.

iSuppli predicts that non-messaging revenue soon will exceed messaging revenue as carriers expand mainstream adoption of 3G services. Non messaging service revenue will reach $20 billion in 2013, up by a factor of three from $6.8 billion in 2008.

“The rapid growth of China’s data services is being enabled by the monumental spending of the nation’s wireless carriers on mobile infrastructure equipment,” said Will Kong, an analyst covering China research at iSuppli.

“The carriers this year will spend about $6.3 billion on mobile infrastructure equipment, up 28 percent from 2008. This will represent a near-term peak, with spending in 2010 declining by 2.4 percent to $6.1 billion. 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.”

Kong claims that, although China Mobile achieved strong financial performance this year, its subscriber growth rate will decline. This is because China Telecom and China Unicom will place greater competitive pressure on China Mobile, especially in non-messaging services, by leveraging their network and handset advantages.

In fact, China Mobile already has lost substantial market share in terms of new subscribers. The company’s share of wireless subscribers dropped to 58.2 percent in September, down from 78 percent in January.

iSuppli forecasts mobile subscribers at China Telecom and China Unicom will exceed 100 million and 200 million, respectively, in 2013. By leveraging their advantages in networks and handset products, China Telecom and China Unicom will place even more pressure on China Mobile.

iSuppli expects that China Mobile’s incremental market share will be stable at around 60 percent for the next few years.

China Telecom and China Unicom will continue to subsidize mobile phones in order to provide attractive consumer prices.

And both carriers will be supported by their parent companies, keeping them solvent. iSuppli also believes China Telecom and China Unicom will focus on long-term returns to gain more market share rather than on short-term profits.

Subscribe to our Newsletter

Comments

comments