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China rolls out 3G who will benefit the most? COGO

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January 07, 2009 – Comments (1) | RELATED TICKERS: COGO

Analyst says 3G phone sales could top $44B  China awards first 3G mobile phone licenses

http://www.marketwatch.com/news/story/china-awards-3g-licenses-domestic/story.aspx?guid=%7B1033DE6B%2DFFD7%2D4667%2D9AE1%2D22725C821036%7D&siteid=yhoof

By V. Phani Kumar & Michael Kitchen, MarketWatchLast update: 9:41 a.m. EST Jan. 7, 2009NEW YORK (MarketWatch) -- China issued the first of its long-awaited licenses for third-generation mobile phones Wednesday, with the licenses going to three state-owned mobile phone operators, state-run Xinhua news agency said.The Ministry of Industry and Information Technology said China Mobile Ltd. (HK:941: news , chart , profile ) (CHL: china mobile limited sponsored adrNews , chart , profile , more  Last: 50.28-3.57-6.63%
9:48am 01/07/2009
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 50.28, -3.57, -6.6%) -- the world's largest mobile service provider by subscribers -- was awarded a license for the Chinese-developed 3G standard called "Time Division Synchronous Code Division Multiple Access" or TD-SCDMA. The company's two state-owned peers received licenses for 3G phones using foreign standards. China Telecom Corp. (HK:728: news , chart , profile ) (CHA: china telecom corp ltd spon adr h shsNews , chart , profile , more  Last: 38.94-2.49-6.01%
9:48am 01/07/2009
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 38.94, -2.49, -6.0%) got the license for U.S.-developed CDMA 2000, while China Unicom Ltd. (HK:762: news , chart , profile ) (CHU: china unicom (hong kong) ltd sponsored adrNews , chart , profile , more  Last: 11.68-1.67-12.51%
9:48am 01/07/2009
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 11.68, -1.67, -12.5%) received the license for Europe's WCDMA standard. The Xinhua report announcing the license awards also quoted Sinolink Securities analyst Chen Yunhong as saying 3G cell phone sales would top 300 billion yuan ($44 billion) during the 2009-2011 period. The news did little to help the telecoms' share prices. China Mobile stock fell 5.5% in Hong Kong trading, while China Unicom plunged 10.6% and China Telecom gave up 5%. The 3G licenses have been the subject of much interest by global investors, with some critics saying China would seek to exclude foreign telecoms from the licensing. See Craig Stephen's commentary on the 3G licenses. The license issues follow a wave of restructuring in China's telecommunication industry. On Tuesday, China Unicom said it had won government approval to take over China Network Communications Group Corp. The move leaves just three mobile-phone operators, down from six before the consolidations in the sector. Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
Michael Kitchen is a copy editor for MarketWatch and is based in New York.

1 Comments – Post Your Own

#1) On January 07, 2009 at 11:05 AM, IBDvalueinvestin (99.59) wrote:

Cogo forecasts that Huawei and ZTE's share of the Chinese wireless telecom market will expand significantly in 3G versus their current position in the 2G market.

Outlook for Cogo's handset business also remains strong. Cogo is the sole agent in China for VIA Technologies, a leading CDMA baseband technology vendor, and its subsidiary, VIA Telecom, for the sales of its baseband CDMA 2000 technology used for handsets in the China Telecom network. Cogo was already awarded VIA Telecom chipset design win from BYD, China's major original design manufacturers with customers including some of the world's leading mobile phone makers.
The company expects growth of 3G technologies to accelerate as demand increases for these higher content handsets offering new features such as CMMB, a version of mobile television found in the domestic Chinese market.

"Cogo has already begun to benefit from the roll out of networks in China, which we would expect to continue throughout 2009, especially now that the government has awarded its 3G licenses," said Jeffrey Kang, Chairman and CEO, Cogo Group, Inc. "Our relationships with Huawei, ZTE, VIA, and other leading technology and equipment providers will leave COGO well-positioned to benefit from the upgrade of China mobile networks to 3G."

Read this article which says China based companies like Huawei & ZTE etc. will get the majority of the $40B 3G rollout.

Which in turn will benefit COGO.

http://tinyurl.com/CHINA-3G-Rollout2009

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