Boston, MA 09/02/2014 (wallstreetpr) – China Telecom Corporation Limited (ADR) (NYSE:CHA) and the other telecom company China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) can now go ahead with their expansion plans of 4Gnetwork trial in 40 cities. Previously, they had the regulatory approval for the trial in 16 cities. The telecom companies received the regulatory approval from the Ministry of Industry and Information Technology for conducting a pilot test in the 16 cities in June 2014. The new approval allows the two companies to expand the trail in cities in the mainland including Tianjin, Guangzhou, Beijing and others.
The competition
China Telecom Corporation Limited (ADR) (NYSE:CHA) and China Unicom use the Time Division Duplex and Frequency Division Duplex together to run the network trial. The combination of two duplex standards allows the telecom firms to provide better connectivity and download speeds. Both the companies have to compete with China Mobile Ltd. (ADR) (NYSE:CHL) in terms of acquiring more new LTE customers. 4G is the core strength of China Mobile and currently has got the largest subscriber base with almost 14 million LTE customers in the region.
Growth in 4G
The expansion plans of network trial comes as good news for China Telecom it has managed to post strong top and bottom-line growth in the first six months of 2014. China Telecom Corporation Limited (ADR) (NYSE:CHA) was seen struggling with earnings growth in this year. 4G expansion can help the two telecom companies to post better performance in the coming years. The sector has got lot more potential, and only few players can take the advantage of it.
Grabbing opportunity
China Telecom has to make an investment initially which will add to company’s performance in coming time. The focus should be on aggressive promotion and launch of competitive tariff plans. Initially, it will hurt margins but then will enable China Telecom to be in a position to challenge the market leader China Mobile in 4G market segment. But to come at that place, China Telecom Corporation Limited (ADR) (NYSE:CHA) has to work on building their handset portfolios which can support the hybrid 4G network seamlessly.
