In October 2008, for the first time in its history, the Chinese market reported a monthly decline in customer numbers. This was not the latest sign of global economic meltdown, but rather a consequence of China Telecom¡'s acquisition of China Unicom¡'s CDMA network. At the point of acquisition, Unicom counted 41.73m CDMA subscribers while Telecom reported 29.08m, the discrepancy being the result of differing counting methodologies: Telecom disregarded customers who had not paid their most recent bill or who it was not confident would continue to pay in the future. Only 6.8% of the total CDMA customer base were prepaid customers at the end of September, so the vast majority of uncounted customers were on contracts.
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China: Monthly Net Additions, GSM and CDMA
Telecom reported a further loss of 0.68m CDMA customers in October, bringing the end-month total to 28.40m. This represents a 31.9% decline compared to the end-September figure reported by Unicom. The October decline was in line with the monthly losses sustained in July, August and September, which suggests that these were actual disconnections rather than an increase in the number of customers deemed uncreditworthy.
By contrast, the GSM base saw its tenth successive month of 8m+ net additions, an 8.41m boost taking the total to 573.85m. Market leader China Mobile accounted for the lion¡'s share of this gain with a monthly increase of 7.19m. Its end-October customer base stood at 441.91m, which represents market share of 73.4%, up 4.4pp year on year. Unicom saw a 1.22m gain in GSM subscribers in October, and its total base stood at 131.95m at the end of the month. In terms of market share, it lost 8.7pp annually to finish the month on 21.9%, with 6.5pp of this decline coming in October itself. Meanwhile, cellular newcomer China Telecom had 4.7% market share at the end of October.
The total Chinese customer base remained above 600m despite the inorganic loss effected by China Telecom¡'s recount. With a monthly decline of 4.92m, the number of mobile connections in China stood at 602.25m at the end of October.
Source: Cellular News.