Pls see attached the full PDF research report, below is a highlight:
◆ We believe 3G licensing will happen before the end of 2008: CT will get CDMA2000-EVDO, CU WCDMA, and CM TD-SCDMA, all at the same time.
• It has been two months since the restructuring and the current macro situation (promoting investment & consumption) supports the timing.
• China Mobile has made decent improvements in TD-SCDMA. The regulator may now hope that giving 3G licenses to the other operators could force CM to improve TD-SCDMA even faster, and push CM to get more IPR (intellectual property rights) in the global 4G standard of TDD-LTE.
• China Telecom and China Unicom need to leverage 3G to present meaningful competition to CM, especially in the high-end market.
◆ We believe only asymmetric interconnection tariff is possible. One-way MNP or forced roaming may spur China Mobile to fight back more violently, destroying the industry value before it can even be re-split.
• How can we re-split the industry value without first destroying it? The salami-slice strategy could be the answer: CM may restrain from fiercely fighting back for a small high-end market share loss as it still has huge incumbent profits to protect. However, if the market share loss is too substantial—as could be triggered by one-way MNP or forced-roaming—CM would be forced to cut its high-end margin immediately and significantly to a very defensive level, thus hurting all mobile players (high-end profit may account for 70% of CM’s total profit and 50% of the whole industry’s).
• Asymmetric interconnection tariff (CM user dials other mobile user: Rmb0.06/min; other mobile user dials CM user: Rmb0.04/min) is possible as the impact is calculable and rather limited for CM but substantial for CU-GSM and CT-CDMA due to their very low bases. For example, based on 2007 static numbers, asymmetric interconnection tariffs like this would have cost CM Rmb2.5bn in revenue (CM’s total revenue was around Rmb400bn) and would have saved Rmb1.7bn and Rmb0.7bn for CU-GSM and CU-CDMA respectively (total net profits were around Rmb6bn and Rmb0bn) (Chart 1).
• Limiting CM’s net adds market share could be another way to allow for a re-splitting of the industry value without triggering harsh competition to destroy it, but this approach
 telecom_20081114mn-3glicencingasymmetricalintercon (74.58 KB)
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发表于 2008-11-14 12:54
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