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RTNominal down6.690 -0.070 (-1.036%)

17/01/2020 15:02

{I-bank focus}Xiaomi (01810) promoting 4G service as "5G"

[ET Net News Agency, 17 January 2020] Xiaomi Corporation (01810) launched three "5G"
plans that use China Unicom's (00762) network on 14 January. These plans' monthly fees
range from Rmb49 to Rmb99, which are significantly below operators' 5G plans with similar
data allowance, and are only available to Redmi K30 5G phone purchasers.
J.P. Morgan said Xiaomi has been a 4G Mobile Virtual Network Operator (MVNO) since 2015.
It purchases network resources, such as data and voice traffic, from China Unicom and
resells it to its own customers with plans designed by itself.
The research house said operators currently allow a 4G SIM card user to enjoy a speed of
up to 300Mbps (much faster than 4G, but slower than 5G full speed of 1Gbps) on a 5G
JPM believes Xiaomi's new plans will likely have limited traction because few customers
will be interested in becoming an MVNO customer. But the resurgence of Xiaomi's mobile
plans this time is mainly aimed at raising awareness of its 5G phones.
It also believes Xiaomi MVNO service is potentially positive for China Unicom, which can
earn wholesale revenue from Xiaomi, and acquire a customer indirectly through Xiaomi helps
save customer acquisition costs. However, losing customers to Xiaomi is negative for China
Mobile (00941) and China Telecom (00728), though. Nevertheless, JPM thinks the impact will
be negligible for operators. (KL)

Remark: Real time quote last updated: 21/02/2020 17:59
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