The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (Trefis) -- China's second largest wireless service provider, China Unicom (CHU), said last week that it added 3.23 million subscribers in January that took its total tally past the 200 million mark.
The company now has about 203 million mobile subscribers, up 1.62% from the prior month.
The debut of Apple's (AAPL) iPhone 4S in China helped China Unicom add more than 3 million 3G subscribers, which accounted for almost 95% of the total net additions.China Mobile (CHL) and China Telecom (CHA) also released their monthly subscriber adds. Both reported a growing number of 3G subscriber additions, though they fell well short of China Unicom's net 3G adds. Our $24 price estimate for China Unicom stock is about 30% above the current market price. See our complete analysis of China Unicom here. At less than 14%, 3G penetration in China is very low. This gives smaller wireless carriers such as China Unicom and China Telecom ample opportunity to compete with the leading player, China Mobile. With more than 650 million subscribers, China Mobile is the largest wireless carrier in the world , with twice as many subscribers as China Unicom. But when it comes to 3G, the difference is not nearly as much. As of January, China Mobile had around 54 million 3G subscribers and around 43 million subscribed to China Unicom's 3G network. China Unicom has been closing the gap with China Mobile by adding more number of 3G subscribers every month. In December, China Unicom added close to 3.5 million 3G subscribers compared to to China Mobile's 3.2 million. The 4S' addition in January has bolstered China Unicom's 3G portfolio further and will help it tap the huge opportunity that China's wireless market presents. However, China Unicom will soon lose its exclusive hold on the iPhone as China Telecom is set to launch the iPhone 4S on March 9. A China Mobile-Apple deal is also on the cards following Qualcomm's launch of a baseband chip that will allow the next-generation iPhone to access China Mobile's so far incompatible 3G as well as the 4G network, which is under trial.
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