China Netcom Lumbering into the Future

Posted on May 2, 2008
Filed Under China Business, Mobile |

USITO’s Chinatzone reports:

China Netcomï¼Œthe second largest fixed telecom operator in China, saw its local call user number fall 1.72 million in the first quarter of 2008 to 109 million, 5.64 million less than in the same period of 2007, due to the FMS (fixed-to-mobile substitution) trend.

In March alone, the user number dropped 505,700, a successive decrease of nine months.

It is predicted that the customer churn, which made the company lose 3.152 million fixed phone users last year, will continue in 2008.

Meanwhile, China Netcom had its broadband service user number grow 1.89 million to 21.66 million in the three months, growing 5.71 million. Besides, the company posted 20.217 billion yuan revenue in the period, up 0.85% year on year.

I think they mean that broadband subscribers grew 5% in three months.

For China Netcom, as with China Telecom, fixed-line subscriptions are dropping like a stone. Broadband is their only hope. There’s a lovely symmetry between the decline in fixed-line subscribers and increasing broadband subscribers, but revenue remains flat.

There’s not much point in speculating what all this means or doesn’t mean until China’s telecom industry is rearranged by the government sometime later this year.