TMCnet News
Little Smart to withdraw from Chinese market within 3-yrsBEIJING, Feb 04, 2009 (Xinhua via COMTEX) -- Little Smart (personal handphone system) will withdraw from the Chinese market within three years because its 1900-1920MHz frequency band has been requested empty by year-end 2011. The move is to prevent the frequency band from interfering with China Mobile Communications Corp.'s (CMCC) TD-SCDMA (TD) system, whose frequencies range is 1880-1900 MHz. According to statistics released by the Ministry of Industry and Information Technology (MIIT), the number of Little Smart users was 68.931 million by last year's end, down from almost 100 million during its peak. Still, the move will impact about 70 million users. Currently, China Unicom (0762.HK; CHU.NYSE) and China Telecom (0728.HK; CHA.NYSE) are operators of Little Smart's business, and have promised to stick up for their customers interests by transferring them to other mobile telecom networks and offering some preferential services. The move was considered as another supportive measure taken by the government for TD development. Ren Wenjie, researcher with First Capital Securities, thinks that Little Smart's frequency band may be allocated to TD in the future. The issuance of the policy and the three-year term are appropriate considering TD's technological evolution. Cleaning up Little Smart's frequency range is actually within the expectation of China's carriers. Ren said that Little Smart's attraction decreased as the calling fees of mobile phone continuously lowered, gradually sliding the market down. As a result, Little Smart became ripe for plucking from the market. China Unicom announced on January 23 in consideration of the consecutive slowdown of Little Smart user numbers and calling volume, it was conducting impairment tests on relevant business assets. It was expected that a considerable amount of provisions will be put towards the impairment of the relevant assets, which might result in a negative impact on the carrier's profit for 2008. After the adjustment, CMCC's frequency range advantage will be more obvious. MIIT ratified 3G frequency bands for China's three giant telecom operators right before January 26, China's traditional New Year. China Unicom and China Telecom each acquired a 30M frequency range, and CMCC a 35M. |