Sep. 6, 2013, 10:58 AM
- Two months after U.S. district judge Denise Cote declared Apple (AAPL +0.2%) guilty of conspiring to fix e-book prices, and two weeks after the DOJ proposed e-book injunction terms, Cote has issued an injunction.
- As suggested by the DOJ, Apple is prohibited from striking restrictive e-book pricing deals with publishers for 5 years, and is required to stagger its talks with publishers to prevent collusion. Also, an external monitor has been assigned for two years.
- However, Apple won't be required to allow rivals to sell e-books through their iOS apps without giving Apple a 30% cut, as the DOJ had suggested. Amazon (AMZN +0.4%) has refused to sell e-books through its Kindle iOS apps out of an unwillingness to pay Apple 30% of its take.
- Meanwhile, Reuters nearly backs up yesterday's Sina Tech report by reporting China Unicom (CHU -0.3%) and Telecom (CHA -0.6%) will begin selling the iPhone 5S/5C shortly after it goes on sale in the U.S., a major change of pace from the delays accompanying past Chinese iPhone launches.
- Other news: Apple Insider reports Mac OS X 10.9 (Mavericks) will be released at the end of October, and Quantcast and Piper estimate iOS' share of U.S. mobile browsing traffic has grown to 65%.
- The latter is a negative for Google (GOOG +0.2%), due to the huge traffic acquisition payments it makes to Apple for Mobile Safari search ad clicks. However, Google doesn't have to pay Apple if iOS users rely on Chrome, as a growing portion of them are.
Sep. 5, 2013, 3:55 PM
- If the Chinese media report (comes from local site Sina Tech - translation) pans out, it means China Telecom (CHA +0.4%) and China Unicom (CHU -0.3%) will start selling Apple's (AAPL -0.8%) newest iPhones the same day they're expected to launch in the U.S. and several other big international markets.
- Last year, Telecom and Unicom didn't begin selling the iPhone 5 until Dec. 14, more than 2 months after the device went on sale in dozens of other markets.
- Sina Tech also reports China Mobile (CHL +0.7%) won't be able to sell the 5S until November (assuming a deal is announced), due to the need for regulatory approval of an iPhone supporting CHL's TD-LTE 4G network.
- The 5S is said to come in 4 colors, and the plastic-shell 5C in 5 colors. Other reports suggest the 5S' colors will be white, black, gold, and graphite, and the 5C's colors white, red, green, blue, and yellow.
- An iPhone event will take place in Beijing shortly after Apple's main Sep. 10 event.
- Earlier: DoCoMo to reportedly offer iPhone soon
Aug. 22, 2013, 12:39 PM
- Jefferies reiterates its Buy rating on T-Mobile (TMUS +1.5%) and hikes the PT to $28 from $25. Analyst Thomas Seitz: Q2 "results were outstanding ... the disruptive 'Uncarrier' strategy likely has started yielding positive results." T-Mobile added 688K customers in the quarter, the first postpaid gain in 16 quarters.
- Seitz maintains a Hold rating on Boingo Wireless (WIFI -4.5%) and raises his PT to $7.50 from $6.50. Boingo "continued to further diversify its rev stream away from retail subscription & single-use segments & towards wholesale & advertising ... which gives us incrementally more confidence in the company's strategy."
- Analyst Cynthia Meng reiterates a Buy rating on China Telecom (CHA -0.7%) but lowers her PT to $60 from $64 on reduced expectations of FY 2013 and 2014 earnings (0.9% and 5% respectively) following the company's 1H results.
Aug. 21, 2013, 11:23 AM
- China Telecom's (CHA) revenue in 1H 2013 grew 14.1% Y/Y to RMB157.5B. Mobile revenues climbed 34.7% to RMB72.9B (data revenue led the way, up 35.8%). Wireline revenues were up 0.9% to RMB84.6B.
- Mobile subscriptions climbed 21% Y/Y in H1 to 174.5M. ARPU grew 3.6% to RMB54.3. 18.3M (60.4%) of new subscriptions were on the 3G network.
- EBITDA grew 35.5% to RMB50.1B. EBITDA margin was 36% (up from 26.8% in H1 2012).
- Long-term debt shrank slightly to RMB82.6B.
- FCF grew 61.9% to RMB13.8B. Net profit was up 15.9% to RMB10.2B.
- (1H report), (presentation)
Aug. 19, 2013, 12:12 PM
- China Telecom (CHA +1.4%) and NetEase (NTES +7.2%) are creating a JV that will launch YiChat, a "social" smartphone messaging app.
- The companies are clearly looking to challenge 800-lb. gorilla Tencent (TCEHY.PK) and its dominant WeChat mobile messaging/social networking platform. WeChat's monthly active users rose another 21% Q/Q in Q2 to 236M. Moreover, Tencent boasts average daily usage of 5.3x/user/day.
- WeChat's traffic-hogging ways have upset Chinese carriers. However, Tencent stated in May it has reached "preliminary solutions" (likely involving payments to the carriers) to address the issue.
- NetEase and China Telecom assert YiChat will be differentiated by its support for free text and voice messages (whether or not the recipient has installed YiChat), as well as by noise-reduction tech and the bundling of "free data promotional packages."
- China Mobile (CHL +0.5%) is also trying to challenge Tencent, courtesy of its Fetion messaging platform. Fetion claimed 99M active users earlier this year, but its growth has been notably slower than WeChat's. SINA's Weibo microblogging platform (now backed by Alibaba) also competes in this space.
Aug. 15, 2013, 4:27 AM
- China's suddenly vigorous enthusiasm for investigations into corporate behavior could strengthen further, with the National Development & Reform Commission (NDRC) reported to be considering probes into the petroleum, telecommunications and banking sectors.
- The idea is to scrutinize industries that affect the lives of ordinary Chinese. However, the sectors mentioned are dominated by state-run companies, such as China Unicom (CHU), China Mobile (CHL) and China Telecom (CHA) in the communications industry, while it's the government that sets the price of oil.
- The healthcare sector is already under well-publicized scrutiny, while the NDRC has also asked for information about the prices of foreign cars.
Aug. 8, 2013, 2:58 PM
- China Unicom (CHU +6.5%), China's second-largest mobile carrier, is trading up after releasing H1 results.
- The carrier's H1 numbers impressed, with revenue of 144.31B yuan up 19% Y/Y and earnings of 5.32B yuan (3.43B yuan a year ago) surpassing a consensus of 4.89B yuan.
- Profitability continues to rise as the first carrier to adopt the iPhone in China reaps the rewards of out-sized subscription and data revenue growth.
- 3G ARPU fell to 77.6 yuan (from 91.8 yuan a year ago), as CHU reeled in less wealthy 3G subs via low-cost smartphones.
- Shares were temporarily halted in afternoon Hong Kong trading after results were accidentally pre-released on a government website.
- Rivals China Mobile (CHL +1.5%) and China Telecom (CHA +2.1%) are up in sympathy.
Jul. 30, 2013, 11:39 AM
- Developer Hamza Sood has uncovered code that appears to confirm rumors the iPhone 5S' (AAPL +1.8%) home button will have a built-in fingerprint sensor.
- Tim Cook reportedly traveled to China this week to meet with China Telecom's (CHA +0.3%) leadership. No details on what was discussed; chances are CHA will be a major buyer of the low-cost iPhone.
- In a "final office action," the USPTO has rejected 21 claims within Apple's pinch-to-zoom patent. Look for Apple to appeal the ruling. In June, the USPTO reaffirmed the validity of a claim in Apple's "rubber-banding" patent after previously invalidating it.
- Leaked photo cases and a BI source indicate the low-cost iPhone will be called the iPhone 5C. "C" is meant to stand for "color," though as BI notes, critics could refer to it as standing for "cheap."
- Sprint sold 1.4M iPhones in Q2, down from 1.5M in Q1 and a year ago. For reference, Verizon sold 3.9M iPhones in Q2, and AT&T at least 3.7M.
- The iPhone's U.S. customer loyalty remains strong. A CIRP survey found 78% of U.S. iPhone owners upgrading to a new iPhone vs. 67% of Android owners buying a new Android phone.
Jul. 15, 2013, 2:34 PMChinese Internet stocks are turning in a good day after the government unveils a new telecom plan promising to increase fiber-to-the-home deployments, improving 3G connectivity, and issue 4G licenses by year's end. YOKU +6.2%. BIDU +4.7%. QIHU +4.8%. DANG +4.9%. YY +9.2%. CYOU +5.2%. China's telecom giants aren't moving much: CHL +0.3%. CHA -0.4%. CHU +1%. (more on China/4G) | Comment!
Jul. 5, 2013, 1:01 PMChina Telecom (CHA -0.6%) doesn't want China Mobile (CHL +0.1%) to have a huge head-start in offering 4G: the #3 Chinese carrier plans to build a pre-commercial 4G network covering 31 provinces by year's end, and will issue an equipment tender in Q4. The timing of a commercial launch still depends on when government licenses (expected early next year) are issued. CHL has said it plans to spend $6.75B in 2013 on its 4G network, but some are wondering where the orders are. CHL's network is based on the TDD LTE standard; China Telecom and Unicom (CHA -0.6%) want to use the FDD standard (more popular overseas), at least outside of densely-populated areas. ERIC, ALU, and NOK stand to benefit from rising Chinese 4G orders. | Comment!
May 20, 2013, 2:03 PMApple (AAPL +1.9%) roundup: 1) Brian White cites Chinese 3G growth as a reason for his $888 PT: he points out China's 3G sub base rose 83% Y/Y in April to 293.1M, and is expected to hit 375M-400M by year's end. China Mobile (CHL - previous) had 120M 3G subs; China Unicom (CHU) had 92M, and China Telecom (CHA) 81M. 2) Taiwan's Economic Times reports Apple is testing 1.5" OLED displays for an iWatch, and that "market rumors" indicate Foxconn has received iWatch trial production orders. 3) Digitimes reports MacBook orders are expected to grow 20% Q/Q in Q2, as Apple launches new systems sporting Intel Haswell CPUs at June's WWDC conference. | 17 Comments
May 8, 2013, 12:40 PMThe Chinese government is expected to issue 4G TD-LTE licenses by year's end, writes Morgan Stanley's Katy Huberty in a bullish note on Apple (AAPL +1.2%). The licenses could pave the way for China Mobile (CHL), which has 700M+ subs and is spending $6.75B this year on its TD-LTE network (still in trial mode), to begin selling the iPhone. One potential roadblock: China Unicom (CHU) and China Telecom (CHA) want the government to take its time in issuing TD-LTE licenses. CHA wants to delay its 4G capex, and both carriers are supporting the FDD-LTE standard (far more popular outside of China). (AAPL/CHL agreement) | 6 Comments
May 7, 2013, 1:37 PMSina (SINA -2.5%) gives back yesterday's gains after Tencent (TCEHY.PK) says it has reached "preliminary solutions" with Chinese mobile carriers (CHL, CHU, CHA) regarding its very popular WeChat mobile IM platform, which both generates heavy traffic and eats into text-messaging revenue (China Mobile's text revenue fell 4.8% last year). That's likely raising fears Sina might have to pay carriers for the traffic produced by Weibo, arguably WeChat's top rival. Tencent has said it's unlikely to charge WeChat users. | Comment!
Apr. 8, 2013, 12:33 PMAfter a Chinese government official suggested Tencent (TCEHY.PK) will "have to pay fees" to mobile carriers (CHA, CHL, CHU) for the use of its extremely popular WeChat mobile IM/social networking platform, Tencent tells its users it's unlikely to charge for WeChat. Much like their European peers, Chinese carriers have seen their text messaging revenue pressured by the adoption on Web-based services such as WeChat. Sina (SINA) recently admitted WeChat, which now has 300M+ registered accounts, has been affecting Weibo usage. | Comment!
Mar. 20, 2013, 2:59 AMChina Telecom (CHA): Q4 net profit -17% to 2.36B yuan ($380M) vs consensus of 2.04B yuan. Revenues +17% to 73.1B yuan vs 73.2B yuan, with wireless data sales boosted by iPhone use. ARPU 53.9 yuan, stronger than expected. Mobile subscribers +8M to 160.6M. To boost capex 40% this year to 75B yuan. (PR) | Comment!
Mar. 6, 2013, 6:31 PMAfter expanding the reach of its fiber-to-the-home (FTTH) network by 33M households in 2012, China Telecom (CHA) wants to expand it by another 25M in 2013. Rival China Unicom (CHU) is also aggressive: it brought its FTTH network to 15.2M new households last year, and wants to add 10M this year. CHA and CHU respectively added 15.7M and 8.2M broadband subs in 2012, and hope to add 15M and 9M in 2013. With China now sporting over 1.1B mobile subs, CHA and CHU are increasingly counting on broadband and 3G data services to drive growth. | Comment!
CHA vs. ETF Alternatives
China Telecom Corp Ltd along with its subsidiaries is an integrated information service company. It offers telecommunications services, including wireline voice services, mobile voice services, Internet access services, value-added services.
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