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China Mobile Gets Valuable Head Start on 4G Services

But China Mobile still has 760 million subscribers and prices of its NYSE-traded shares have held steady since a drop during the global economic downturn before 2010.

China Mobile is clearly dialed in to its likely market lead in 2014. It will let subscribers apply for 4G accounts without changing their phone numbers, ChinaTechNews.com reported on Nov. 29. According to the report, by the second half of next year the company will give customers another incentive as prices of a "typical" 4G phone is expected to fall below 1,000 yuan ($164.60).

China Mobile's first 4G subscribers will be in the mega-cities Beijing, Guangzhou, and Chongqing -- later reaching Shanghai as the city builds its own 4G network. Its 4G standard is considered ideal for intense data traffic in dense cities.

Further helping its 2014 prospects, China Mobile is expected to offer iPhones in China. That would link the carrier to one of the top handset brand for status-conscious Chinese consumers and probably lift sales for Apple (AAPL), which is increasingly pressured by  cheaper, but still solid Chinese brands such as Lenovo (0992.HK) and ZTE (000063.SH).

To sell its service, China Mobile rebranding some of its business under the name "And" represented in promo materials by the widely known English word "and" with an exclamation mark plus the Chinese character equivalent. Those words depicted in green and pink would "create an image of youth and vitality for the staid China Mobile," ChinaTechNews.com says.

But the company must do more than splash colors around to hold an early 2014 lead. If phone prices don't drop, customers in less wealthy parts of China will just stick with 3G. The TD-LTE standard also requires burning capital on more base stations, Nakin says.

China Mobile's two competitors may make a go at TD-LTE anyway, to capture early market share, despite costly technical inconveniences. "What China Unicom and China Telecom face right now is do they want to sit on their hands while China Mobile is building up a network and gets early adopters?" he says.



At the time of publication the author had no position in any of the stocks mentioned.

Ralph Jennings is on LinkedIn.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Ralph Jennings lived in Beijing for seven years as a writer, editor, student, teacher and consumer. Originally from Portland, Oregon, Jennings has covered financial markets in Asia since 2008. His news reports often examine markets from a macro-policy angle on behalf of individual traders as well as institutional investors. In his view, China is a volatile country that can be understood only by watching it closely week in, week out, followed by analysis mixed with hands-on perspectives. He currently lives in Taipei, where he covers general and financial news in East Asia and studies for a master's degree. He also watches China from the unique perspective of Taiwan's traditional Chinese society with its unique economic and political experience.
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