Henan is located in the central part of China, about 500 kilometres south of Beijing. Although its population is the largest in China with 92.56 million
people at the end of April 2001, Henan's economy trails more developed coastal
areas. In 2000, Henan's GDP per capita was CNY 5,551, ranking No. 18 in China,
and considerably below the national average of CNY 7,078. The urban per capita
disposable income ranked even lower at No. 30 with only CNY 4,766.
Due to its relative poor economic status, the mobile penetration at the end
of 2001 was only 5.3%, much lower than the national average level of approximately
11%. National penetration levels currently stands at 13.7% as of July 2002.
Henan's mobile penetration currently stands at 6.06 million as at July 2002.
Fixed line subscribers at the end of 2001 reached 10.9 million, with the fixed
line penetration of 11.8%.
Subscriber Data
To close its TACS network, Henan Mobile's (HMCC) TACS subscribers were encouraged
to transfer to GSM services by being provided with a GSM number and incentives
of several hundred renminbi to subscribers. On 31 December 2001, the TACS network
was officially closed.
HMCC, part of China Mobile Hong Kong Ltd (CMHK) subsidiary dominates Henan's
mobile market with approximately 75% market share at the end of 2001, compared
to a national average of just 71.7% for China Mobile. By the end of 2001, HMCC
had a total of 3.69 million subscribers, 1.75 million of which were prepaid
users. Henan Unicom (HUCC) had 1.25 million subscribers at the end of 2001.
HMCC's market leadership in Henan is in part the result of HUCC's late entrance
into the market. HUCC entered in 1996, and its initial coverage area included
only major cities such as Zhengzhou and Luoyang. Broader, province wide coverage
was not established until 1998.
Recently, HUCC has aggressively promoted its new CDMA service with bundled
sales and handset subsidies. HUCC originally set a CDMA subscriber target of
300,000 by the end of 2002. Although subscriber growth has accelerated to approximately
10,000 per month in June and July, the company remains far short of its target
for the year 2002. According to EMC, total CDMA subscriber take up in Henan
currently stands at 29,000.
Mobile Data Service
SMS use has taken off in 2002. In H1 2002, HMCC's SMS volume hit approximately
100 million messages per month including both point to point SMS and Monternet
messages.
HMCC and HUCC established SMS interconnection on 1 May 2002 along with other
provinces.
Currently, HMCC cooperates with over 80 service providers for its Monternet
services. However, in keeping with the strategy pursued in other provinces,
HMCC has selected eight major service providers including Sina and Sohu, to
work most closely with including for joint promotions.
HMCC ran trials on its GPRS network in early 2002 before the official launch
of GPRS on 17 May 2002. However, GPRS services in Henan are still in their early
stages, and subscriber take up remains low. Unlike Beijing and many other major
cities, handset retailers in Henan's capital Zhengzhou are not offering packages
with GPRS handsets and services bundled together. The lack of such package bundling
services with a GPRS handset in Henan most likely reflects a strategic decision
by China Mobile that subsidising handsets to promote data services does not
provide a reasonable return on investment in a less developed province like
Henan.
Infrastructure
In 2001, HMCC's capital expenditure reached CNY 2.97 billion, 63% of its 2001
revenue, ranking No. 15 out of China's 31 provinces. In 2002, HMCC plans to
invest CNY 5.02 billion in capital expenditure, of which wireless channels is
to take CNY 1.7 billion, followed by transmission at CNY 1.1 billion, and mobile
switching at CNY 0.86 billion, building construction at CNY 0.38 billion, and
mobile data networks at CNY 0.34 billion. Mobile data capital expenditure is
focused primarily on HMCC's GPRS rollout. Nokia is HMCC's largest equipment
vendor
On the other hand, HUCC's capital expenditure in 2001 reached CNY 1.56 billion,
158% of its revenue. In 2002, HUCC plans to cut this figure to CNY 740 million,
CNY 210 million of which is focused on mobile. Nortel and Ericsson are major
suppliers of HUCC.
Extract from EMC's Asia Pacific Mobile Communications Report
EMC's Asia Pacific Mobile Communications Report will provide you with the information
you need to identify key trends, analyse market opportunities and understand
market players with: subscriber growth data and key indicator trends, new mobile
licences and regulatory updates by country, in-depth interviews with mobile
operators, key performance indicators, GPRS and mobile data developments, 3G
licensing updates and infrastructure deployment, country reports, ARPU and MOU
trends and SMS data and usage.
For more information please contact EMC at enquiries@emc-database.com
, call +44 1932 266900 or click on the link below:
http://www.emc-database.com/Website.nsf/index/repapmcr
