China's CDMA mobile phone sales volume approached 30 million in 2009, nearly quadrupling the highest historic record, disclosed Ma Daojie, general manager of eSurfing Telecom Terminal Co., Ltd., saying that the market share of his company has risen from 5% at the beginning of last year to 17%. In provinces of Jiangsu and Gansu and Xinjiang Autonomous Region, the figure reaches 30%.

He predicts that China Telecom Corporation Ltd. (NYSE: CHA and SEHK: 0728) will become the world's largest CDMA network operator in terms of user base by the end of 2010.

Judging from operational data, the company's performance is surprising. Before October 2009, the number of its CDMA users has surged from 27 million when the network is taken over former China Unicom Ltd. to 49 million. The figure topped 50 million in the full year.

By far, distributors procure 72% of the CDMA mobile phones and sell 50% of them. Only a small proportion is sold by China Telecom's outlets and direct sale centers. The company hopes that the figure would reach 60% to 70% for distributors in the future.

In July 2009, China Telecom created a conception of CNY 1,000 3G mobile phones. Since there are currently homemade 3G terminals sold at CNY 500, the company plans to launch CNY 1,000 3G smartphones. While the selling prices of 3G mobile phones become lower, more users would choose 3G services.

However, some insiders point out that China Telecom is hasty to enlarge its user base. As a result, its users are mostly from the medium- and low-end market.

For example, eSurfing service package for students include 30M traffics and 150 short messages for CNY 19 per month, and that for medium- and low-end users only charges for CNY 39, and Nokia-branded mobile phones are presented with the service. Hence, China Telecom's average revenue per user is very low.

The company has been aware of its shortages. Ma reveals that China Telecom is promoting 3G smartphones simultaneously compatible with CDMA2000, EVDO, WAPI, CDMA, and GSM.

First, the mobile phone is dual standby for EVDO and GSM formats. Secondly, users could use Wi-Fi, EVDO, CDMA1X, or WAPI for Internet access. Currently, China Telecom provides 100,000 Wi-Fi hotspots, and the number is likely to be boosted to 130,000 to 150,000 in the future.

Last week, China Telecom inked an agreement with Research In Motion Limited (RIM; Nasdaq: RIMM) on the introduction of BlackBerry smartphones. The Chinese leading mobile carrier's plan include the promotion of Storm 9530, the most high-end EVDO BlackBerry smartphone, and Palm Pre, a knockout model built up by Palm Inc. (Nasdaq: PALM).

Source:tmcnet