China Mobile is looking to tap into the country’s rural areas, already with an estimated 400 million subscribers, to expand its mobile broadband revenue by as much as CNY66 billion ($10 billion) over the next three years.
The country’s largest mobile operator, with 800 million connections, plans to refarm its 900MHz spectrum to offer customers outside of the major cities 4G coverage, the South China Morning Post said today.
The operator has invested heavily in its 4G network since receiving its licence a year ago. It has rolled out 570,000 4G base stations and will have 700,000 by the end of the year. But the vast majority of those are in 300 major cities.
It announced last month it had 50 million 4G subscribers and expects to have 70 million by the end of the year and 150 million by the end of next year. China Mobile executive VP Li Zhengmao said last week at a Shanghai event that ARPU for 4G customers is 1.5 times its average level, so it’s keen to extend its 4G network nationwide.
But to move ahead with its rural push, China Mobile first needs approval from the regulator to refarm its 2G spectrum and an additional licence to operate on the FDD-LTE band. Its current TD-LTE licence is limited to cities.
The timing of China Mobile unveiling its rural plan comes just weeks after reports that the government is preparing to issue FDD-LTE network licences, which would cover the entire country, as early as this month. This not only would free up China Mobile to upgrade its rural coverage, but would allow China Unicom and China Telecom to move aggressively to build out their 4G networks and push to gain ground on the market leader.
The target to boost revenue by CNY66 billion assumes 50 per cent of China Mobile’s rural subscribers will move to high-speed mobile broadband plans over the next three years, according to a Bernstein Research report. The Post said if only 10 per cent migrate off 2G to 4G, China Mobile would see a CNY13.2 billion increase in revenue.