based on communication with third-party distributors, we feel that China Telecom, handset subsidies in a more affirmative, primarily for high-end mobile phones subsidies, the company's objectives include: to promote 3G services; penetrate the high end; with growing churn (in some districts in recent months churn has been from 3% to 3.6%). Up to 1 million users in the target, the treatment turned its consideration to the quality of the user.
the same period, China Mobile's antagonists are constrained along the low class of technology: fixed-line operators until May 2008 when the telecom manufacture restructuring to obtain mobile service copyrights; 2001 ~ 2008, China Unicom's GSM and CDMA all struggling dual-network actions.
> Related: UBS, said the three major telecom operators is the key to competitiveness earnings end user muddle of operators: one dominant pattern is changing operators operational data released in April jumped three Unicom Telecom 3G users Game of the network operator magnificent speed of 3G users to 100 million 3-year embarked on the three operators will pay an annual fare 1.425 billion yuan 3G frequencies
shown in Table 2, B contrive (the cost of handset subsidies accounted for 30% of proceeds) seems better than the A plan (the cost of handset subsidies accounted for 50% of revenue). However, if the in-depth learn, A program's net income is really many higher than the B intend. From this perspective, notwithstanding many operators have complained that they must pay the highest for the iPhone handset subsidy costs, but also acknowledge the contribution of iPhone users the highest net revenue per user.
the TDD-LTE 4G will become the mainstream technology, we believe that the time of issuance of licenses may 4G in 2013 Nianxia 6 months or the premier half of 2014, afterward than in other major markets, 2 to 3 years. Note that, China's 3G license issuance time is early 2009, afterward than in other countries a few years, mainly for self-developed TD-SCDMA technology grant plenty of time. Similarly, we believe that the Chinese administration will TDD-LTE value of proven global business license only after payment of 4G.
three operators face challenges of their relative companies
channel survey
Unicom. According to our industry surveys, third-party distributors are increasingly turned to China Unicom, which is charming deserving to the emulating factors: WCDMA handset sales in the fast-growing; total commitment to charming ARPU 10% of the commission; Unicom internal commission remittance process optimization, greatly reducing the commission to disburse wheel.
we maintain the stock
technology trends
We maintain our stock
- 1,000 yuan boost the number of models for smart phones or 3G services will perceive into the low-end hunk market
We believe that the ecosystem is a better alternative in today's telecommunications industry, the most important factor in the victory. And the other two 3G standards (EVDO and TD-SCDMA),
Cheap Supra Skytop For Sale, compared, WCDMA number of customers in the global telecommunications, user bottom, both leading piece and handset producers, including the support of the industry, including a greater number of participants,
Coach Wallets, each price range of mobile phones attempt many more alternatives.
- Review the success of China Mobile
- China Unicom is now embarked on the same path
end of this annual we expect that China's 3G services will reach the inflection point, then burst , while the phone is the main determinant of scenarios.
network communication capabilities further improved. Unicom's technology upgrade route is very clear - HSPA +, its 3G network currently provides 21Mbps high-speed file card services, the future is expected to upgrade to 42Mbps and 84Mbps, which is quasi-4G data transmit speed.
WCDMA mobile phone product line is more nationwide distribution outlets are switched
We believe that the cause why many investors still rotate to the theme of Unicom doubts almost performance, because they did not fully comprehend the special ecology of the Chinese mart. China Unicom in the global market namely not comparable, China Unicom namely the only WCDMA operators. In the quondam, China's market rivalry position is not balanced, the cardinal mobile service revenue and web profit of China Mobile's favor: in the mobile space, China Mobile accounted as extra than 70% of consumers share the revenue share of 80% and 90% of the net profit share .
According to our channel checks, estimated that China Mobile has 150 million to 2.0 million users, ARPU by 100 yuan, its absolute revenue contribution of 35% to 40%. Compared to high-end and low-end users, this part of the user contribution for network profits are the largest reason: likened to high-end user, single-user lower cost of bargains and marketing; bigger than the high-end users; and low-end users compared to the end user's ARPU higher, so the contribution of single-user revenues even more.
detonated 3G phone is the key to growth
from daytime an, China's mobile phone market is open, not too many operator intervention. Brand mobile phones and pearly shanty makes the handset prices are sharply down, thereby increasing penetration. China Mobile in 1999 to spin off from China Telecom, the company did not own sales channels. Therefore, from the outset, the company had relied heavily on third-party distributors. Third-party distribution channels signed up 80% to 90% of mobile phone users, and more than 90% of domestic sales of mobile phones. From this outlook, we believe that third-party distribution channels as an important factor in changing the rules of the game.
high-end smart phone with more This also explains why we believe that China Telecom should be more spirited on the handset subsidies to attract high-end users as part of the reason. We believe that, whether stay in the low-end users, companies can not accomplish good returns.
TDD-LTE 4G will convert the fashion technology
LTE future we consulted the Chinese people in the industry, the retinue is our view that:
- WCDMA is the 3G era winners
retrospect, we believe China Mobile's success is effectively because: it has adopted such a mainstream technology is GSM; China Mobile users penetration from the quick growth of close to naught to 60%. China Mobile in the telecommunications industry are all important appearances of act agreeable business: Internet, mobile phones, distribution and products. We believe that these factors likewise explain why China Mobile to grow into the world's largest telecommunications corporation.
good product tactics is the key, China Mobile has always been leading the domestic market, sales and marketing: the presentation of prepaid service shrieks; Global, M-Zone, the public card mark creating; high-quality client service.
- handset subsidies spent on high-end users a better
China Unicom: worth as a essence things holdings
China Telecom: CDMA version of waiting for iPhone
HTC, Motorola and Samsung in 2000 to 3,000 yuan a lot of high level China smart phone immediately or a little priceless for mediocre consumers. However, if the price of these phones in the afterward 6 to 12 months reduced by 20% to 30%, which can accessible penetrate into the domestic mid-market. This is important, because only high-performance mobile phones (high-speed CPU and high-capacity memory, high resolution and large screen) can mainly improve the image of high-bandwidth content (such as pictures and video) absences, which will highlight the high-speed network China Unicom advantage.
China Mobile, China Unicom and China is facing increasing competition from telecommunications, we believe China Mobile in the coming years will persist to face challenges.
- in the end the consumer is uncertain factors
Unicom to beyond improve the eco-system
more important is that, compared to iPhone users, China Unicom on the end user to achieve higher profit margins, because of the high cost of handset subsidies to bring enormous pressure on China Unicom's net profit. Finally, we believe that from this perspective, China Unicom's dependence on the iPhone or will be reduced.
to investors in Unicom handset perquisite for the iPhone will be a massive digit of user concerns, we had way to human in the industry . To assess the handset pension plan is legal alternatively invalid, we ought scrutinize two main factors: First, commitment to handset subsidies accounted for a percentage of ARPU; the second is a single user's total cost of handset subsidies.
high-end and low end user subsidy program
We believe that China Unicom is currently level on 4 main affair portfolio with leading positions: network,
Sina microblogging start deep cooperation with China Telecom, mobile phones, distribution and products.
We believe CDMA version of iPhone should be the next 6 to 12 months, a major catalyst for stock prices, the efficacy is expected to emerge as early as the end of 2011. 2011, China Telecom, the second and third 15 min will not have much newspaper to activate.
we expect, as the turning point of China's 3G users to close above the Unicom ambition reach the turning point of sentiment. Many investors are embarrassed in Unicom's valuation: 4.7 times that of 2012 is expected company merit / EBITDA and 25 times expected 2012 proceeds are too tall. We consider this appraisal is not high, because of China Unicom in 2011 ~ 2014 EBITDA compound daily growth rate of 19% net profit CAGR of 69%. According to our anticipate, 2014 China Unicom is expected enterprise value / EBITDA multiple of 3.2 times expected income in 2014 was 9.7 times lower than China Mobile and China Telecom.
We retain the stock a 2%).
we have already eminent the high-end users of China Mobile (GSM users) China Unicom began to alternate to other networks, mainly due to iPhone brings high-bandwidth petitions such as streaming video, music downloads, photo upload, etc. than in China Mobile's EDGE 2.75G network flee faster. We believe that the next circulation in the network may appear in the end user because: the price of high-performance smart phones more more emphatic; accounted for a large part of the end-user groups, juvenile people, academy students and recent graduates of the white-collar operators, 3G data services is an important potential market.
through our site visits, from handset vendors and third-party distributors response apt enhance cell call extravaganza and LTE technology trends, we deem that the three major workers, China Unicom in 4 levels with guiding corner business: web products, mobile phones and distribution, in the 2G era, for China Mobile has the convenience of the same.
China Mobile: A stock market outlook is still not remove
type of user is the operator of the gold? When 3G services arrive turning point? The importance of mobile phone product line can imagine? Three operators of power in anybody current alterations? Can forecast China's 4G roadmap? Three companies investors should do? UBS Securities critic in Beijing, Shanghai and Guangdong, afterward a large number of field trips made to the on questions they response.
◎ UBS Asian telecommunications research director Wang Jin
important factor
In counting, A handset subsidy scheme utter cost (2400 dollars) than the B plan to buy (only 360) more attractive phone, it can attract higher quality customers, which a return rate of increase: a higher-end customer allegiance, it will reduce churn; at all times there is claim, high-end users are compliant to increase costing.
We are optimistic about China Telecom's strategy to adapt, because now should be more concerned about the quality of management,
Cheap Jordan 12.5 Team, not fair size. Although the company took over the CDMA network from the subscriber growth has been strong, but we have low quality of its user base has been skeptical. Therefore, we expect the company's profit growth beneath market expectations. Accordingly, we will be in 2011 and 2012 earnings expectations were lowered by 4.3% and 7.8%. Currently, the market is still expected to grow 20.5% of the profits, but our latest growth forecast of 10.7% compared to the forecast may still be slightly higher.
equipment supplier to a large amplitude the network rollout and to aid China Mobile network quality optimization. Since 2005, large-scale centralized procurement machinery to help China Mobile has successfully negotiated lower equipment prices. Until recently in a long time, China Mobile's network quality are significantly better its competitors.
Although China Mobile and China Unicom's share price performance of nearly 50% this year, the gap exists, but we think this gap will amplify. According to our communication with customers, most customers are still low with China Unicom, or at best is standard. We think that the final investor teams must confess, China Unicom WCDMA as the world's largest conveyor, it is held as a core asset.
rating prediction
If we 2G and 3G services were reviewed in the growth curve, you will ascertain mobile phone price is an important driving coerce for the domestic market. In order to promote the domestic mass market, mobile phone prices have dropped to 2,000 yuan in 1000 to an befitting level. Therefore, we expect to be TDD-LTE services in 2016 to occupy a significant share of the domestic market (up 10% to 15% of the population proportion of the inflection point.)
potential A-share listed and the subsequent increase dividend payment ratio should be the next 6 to 12 months, a major catalyst for the stock price ascent. However, the timing remains uncertain. A shares listed on the bulletin even more is technical support, not fundamental catalyst.
- TDD-LTE will become the major 4G technologies
wealthy mobile product line. In a recent field voyage we base, WCDMA handsets are still in the price and performance presidency. Although CDMA and TD-SCDMA mobile phones has also made progress, but WCDMA mobile product line for the end users are still the maximum attractive. Price of 3,000 yuan in 1000 on the WCDMA handset models far surpassed the number of CDMA and TD-SCDMA (discern Table 1).
UBS mentioned the turning point of the end of Chin
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