Hi all,
 
Since I have been focusing on Solar, I have not been saying much these days.
(conclusion on Solar: LDK, TSL, YGE, SOLF, STP... all are good, and PE is important to look at, e.g. 0757.HK, it is still quite good even it is doubled since its IPO.)
 
After very long time, Chinese mobile industry consolidation is triggered last week:
China Mobile will take China Railway Communication (fixed line)
China Unicom will merge with Netcom and release its CDMA network
China Telecom will purchase Unicom's CDMA network
 
That means all three biggies will have fix-line and mobile business and Chinese government will issues 3 3G licenses for each of them.
 
Considering China Mobile has launched TD-SCDMA and China Telecom has the CDMA network, it seems China Telecom will have the cdma2000 license and China Unicom will have the WCDMA license if government wants all three licenses to be granted in China.
 
Pros and Cons for all three technologies:
TD-SCDMA, will surely be pushed by Chinese government, but the selection of handsets are limited, all needed to be custom-made and hence the price would be expensive.
WCDMA, mature and Chinese companies like Huawei and ZTE can build it with very competitive price.
Cdma2000, the license fee to US Qualcomm is high, hence Korea is fading its cdma200 network to WCDMA.
 
I think what's next:
China Mobile is having hard time to push 3G in China, however don't be too pessimistic, actually, having a fully covered 3G network in China is too much for one operator, see in US, 3G penetration is still very low. What important is Chinese GSM is still a cash cow for China Mobile, they are eager to get more revenue from overseas than 3G in China. You can see the management shift to China Mobile, they have a plan for something aggressive. I don't think they can be Vodafone, but they can be T-Mobile etc. They should absorb more about how to run a 4G network, which is indeed a better solution for a broad country as China. TD-SCDMA, maybe its upgraded version is interoperable with 4G, Chinese scientists will help them out.
 
China Unicom is the big winner, however if they need to spend money on 3G network, it would be a burden for them as well, therefore I don't think they will push hard for 3G to compete with China Mobile TD-SCDMA, what important is how to make use of Netcom network for a more efficient backbone infrastructure for current Unicom. Therefore, I think after that is happening, then they would think about WCDMA or LTE.
 
China Telecom, cdma2000 or another TD-SCDMA, which is not clear indeed, as I personally don't think cdma2000 is any good for China. However, cdma2000 is a natural upgrade for CDMA network, I think PCCW is also betting someone would have cdma2000 in China. However, consider China Telecom fixed line coverage in China, it is very ideal for them to run 4G business like WiMax. I think CDMA would be regional services, and how to interoperable with which 3G technology, that's not important. Maybe 3G is only a value added wireless service for China Telecom broadband, along with WiFi or WiMax in the future.
 
For infrastructure provider, I always think ZTE is the easy winner, providing its low cost and great connection. Huawei, since not IPO, their financial control is not clear. Ericsson, Nokia, Nortel, Motorola, Siemens... even they are all excited, the chance for China to purchase a large order from them is slim. But after all, I think Ericsson is better amongst them for their M-Services are doing well and even in developing countries, Ericsson always acts as a quality backup for low cost Chinese vendors.
 
So, take your time if you want to buy Chinese Telecom stocks and I won't care or look at my ZTE as there is nothing to worry...
 
Cheers,
Eric