Backed by growing mobile data revenue, telecom giant pioneers 4G networks in China

China Mobile, the world's biggest carrier, turns the buses in the capital city of Zhejiang province into moving 4G hot spots and provides Internet service with a downloading speed of 70Mbps, free of charge.

If you live in Hangzhou and happen to commute on the B1 express bus, downloading a high-quality MP3 file in blink of an eye and streaming Full HD movies can make the daily commute much less painful. China Mobile, the world’s biggest carrier, turns the buses in the capital city of Zhejiang province into moving 4G hot spots and provides Internet service with a downloading speed of 70Mbps, free of charge.

The Chinese telecom giant has over 100 TD—LTE base stations in town now and is building four of them every 10 days. By the year end, it is expected to have 2,000 base stations in Hangzhou and over 18,000 in eight other cities.

The expansion is backed by its 125.9bn yuan (US$19.9bn) net profit last year, while its competitors, China Unicom and China Telecom, only made 20.6bn yuan (US$3.27bn) combined.

The company said in its annual report that the mobile data service had been a driving force behind its growth. The revenue of the service increased by 45 percent from last year and accounted for 8.4 percent of the company's 528bn-yuan operating revenue in 2011.

"The data business is playing an increasingly important role for China Mobile, and it will become the biggest driver for China Mobile's rapid growth in the future," said Wang Jianzhou, former chairman of the company.

Facing competition from its two domestic rivals, China Mobile expects to attract another 30mn to its 56mn 3G users, a share of about 39 percent of the current market, according to Li Yue, the company’s CEO. In 2012, it plans to raise subsidy from 17.2bn to 20bn yuan, 90 percent of which will go to smartphone manufacturers.

China Mobile also looks to seal a deal with Apple to sell iPhone on contract soon. Qualcomm, a world leader next-generation mobile technology, is said to be working on chips that allow phones to run on both China Mobile’s 3G and 4G networks. "Integration into the iPhone 5 and other leading handsets will allow China Mobile to leverage its vast and under-utilized 3G network as well as move early to 4G," said HSBC Securities analyst Tucker Grinnan.

US and China mobile phone user comparison