China 3G Subscribers Top 20 Million

China Unicom and China Mobile both added around 1 million 3G subscribers in May, bringing the total number of 3G subscribers among the country's three largest telecom operators to more than 20 million.

The top performer in the 3G market was China Unicom, which picked up 1.023 million customers in May on its 3G WCDMA network. It was a month-on-month increase of more than 50% and met a goal of 1 million new monthly customers the telecom provider set seven months ago.

Trailing just behind China Unicom in 3G pick-ups was the country's largest telecom provider, China Mobile. It added another 917,000 customers to its TD-SCDMA network, and had 9.32 million 3G customers as of the end of May, compared to China Unicom's 6.52 million.

China Unicom has spent a great deal of money promoting its 3G service, and the numbers have begun to show. Last month it added more 3G customers than 2G. The solid showing was most likely due to lower fees for 3G service packages, including those associated with the iPhone.

The much larger China Mobile, on the other hand, has yet to see people fully embrace its homegrown TD-SCDMA 3G network. It has more customers than China Unicom, but it continues to focus much of its energy on expanding the low-end market. Last month it added a total of 4.769 million new customers, around 47% of whom live in rural areas where 3G service is a long way off.

Analysts say to bump up service, both telecom providers will need to focus on the handset market, because a lack of worthwhile products has discouraged many 2G users from upgrading.

China Unicom has the clear lead over its rival, with hundreds of handsets available for its WCDMA network. It has focused much of its efforts on the iPhone and other costly models to capture the high-end market, but plans to work harder on the mid-end market to expand its user base. To do so, it will roll out a number of models priced around $150.

China Mobile, meanwhile, is taking steps to solve handset problems that are stunting the growth of its TD-SCDMA standard. It has signed cooperation agreements with nine mobile phone makers and is providing subsidies for people who purchase high-end handsets.

Meanwhile, domestic producers such as Tianyu and international brands like Nokia, Samsung, and Motorola are making a firm push into the TD-SCDMA market.