China Unicorn's 3G subscribers hit 31%

A step by step increase.

According to Maybank Kim Eng, 3G net add -4% YoY / +2% MoM to 3.3m. The monthly net-add figure was at YTD high but still a bit short of the firm's expectation.

Here's more from Maybank Kim Eng:

We believe it’s probably due to China Mobile’s aggressive subsidy and promotion programmes since July. Given that China Mobile’s net profit margin is still relatively higher than peers, we expect China Mobile to continue the subsidy and promotion strategies to ramp up its 3G penetration and maintain its leadership in the 3G market.

2G net add -64% YoY / -59% MoM to 0.1m. We expect the 2G net add to drop as CU has stopped subsidizing 2G handsets and continues to migrate 2G subscribers into 3G.

3G penetration of total subscribers reached 31% (30% in Oct). Based on CU’s low cost smartphone strategy, we anticipate the 3G penetration to increase gradually.

iPhone5 was officially launched on Dec 14. Comparing to the iPhone5 plans offered by China Telecom, China Unicom’s iPhone5 data plans offer relatively fewer data in all data plans but more subsidies for the data plans under CNY156.

Since we expect iPhone5 users will concern about data more than subsidy, China Unicom may be less competitive in gaining the iPhone5 subscribers.