Number of Chinese operators could triple says Pyramid

Rating: Chinese telecom regulator given Green light to MVNOs

MVNOs' potential cumulative revenue (in $bn), China, 2013-2017, source: Pyramid

In a new research note put out by Pyramid Research entitled, ‘Chinese regulator opens up to MVNOs‘, the market watcher predicts that the number of operators in China could triple from three to nine nine by June 2013. That’s because the Chinese telecom regulator, the Ministry of Industry and Information Technology (MIIT) has finished a month-long consultation,. Each of the three infrastructure-based mobile network operators (MNOs) — China Mobile, China Telecom and China Unicom — will make their services accessible to at least two MVNOs, resulting in the threefold increase. Better still, Pyramid appears to have identified at least two of the potential MVNOs. The numbers involved are mind-blowing.

Pyramid estimates that MVNOs in China will capture nearly five per cent of total mobile subscriptions within five years of launch, – reaching 90 million subscriptions.

Pyramid Research analyst, Hansang He, commented,”This move will create sizable opportunities in the Chinese market for new players, with a cumulative revenue opportunity of between $9.5 billion and $13 billion between 2013 and 2017.”

That’s assuming that MVNOs are able to generate ARPU levels of between 45 per cent to 60 per cent of average market mobile ARPS.

The company is basing this estimates on data gathered from the neighbouring Hong Kong market and using it as a benchmark.

Pyramid has identified two national retail chains Suning and GOME as potential MVNOs. Both companies were declared by senior MIIT officials as qualified suitors on January 23rd 2013.

Pyramid says, the two companies fit as channel MVNOs given their existing network of thousands of outlets across the nation, most of which are already serving as hubs to sell MNO SIMs and handsets.

It will be interesting to see if any non-Chinese handset manufacturers benefit from this market opening up – given now that they could have nine chances to get their products ‘ranged’.

Pyramid doesn’t make any mention of it but GoMo News wonders if potential MVNOs will fight to piggyback off China Mobile and then China Unicom given that they operate GSM based networks rather than cdmaOne based networks?

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