China Telecom CDMA Network Posts 30% Growth

After a bumpy start, this year is starting to look like a breakthrough year for China Telecom, the country's third largest mobile operator and owner of what will soon become the world's largest code-division multiple access (CDMA) network.

With a 30% increase in growth since 2009, China Telecom is set to become the world's largest CDMA operator if the pace of growth is maintained. The other two large CDMA operators (Verizon and Sprint) are both in the United States.

This is a big turnaround for CDMA in China, which had been on the decline before a major telecom reform effort was pushed through two years ago. The reform allowed China Telecom, previously a fixed-line provider, to buy the ailing network from a rival that ran two systems -- CDMA and global system for mobile (GSM).

In 2010 China Telecom expects to sell 50 million CDMA devices and another 50 million upgrades to older subscribers. That's welcome news for U.S.-based chipmaker Qualcomm, the main provider of CDMA chips and creator of the standard.

So far most of the focus has been on high-end smartphones. However, China Telecom general manager Wang Xiaochu acknowledged that the company needs to pay more attention to the mid-range market.

China Telecom now has 19% of the $444 handset market and 52% of the $888 handset market. This year, it will be concentrate marketing on the sweet spot of the Chinese handset market -- $103-$296 -- and expect to sell around 10 million devices by the end of the year.

The company expects 50% of CDMA sales to be for 3G handsets this year, with that number increasing to 80% next year. Through the promotion of cooperation between CDMA device-chip manufacturers and the mobile industry, China Telecom is also hoping to spearhead design efforts that will put more Android-based phones on the market.