Chinese market boasts 1.12 billion mobile users, but 3G penetration is just 22%

New figures from China’s three largest mobile phone carriers has revealed that while the nation boasts just over 1.12 billion mobile users, just 22% use 3G networks.

However, the Sand Hill insights figures show that despite the relatively low penetration rate, China still boasts 247.2 million users on 3G, with a further 13.7 million new subscribers added in January alone.

The figures also show tremendous potential growth for low-end smartphone manufacturers, with a further 873.5 million users yet to upgrade to 3G devices.

The world’s largest mobile phone carrier, China Mobile, added 7.1 million 3G users to reach 95.0 million 3G users. However, the carrier also has the lowest 3G conversion rate, with just 13% of its 715 million subscribers (representing 64% of the 3G market) on 3G.

Second placed in the Chinese market is China Unicom, with 22% marketshare and 242.9 million subscribers overall. Its 3G penetration has grown to 33%, or 162.8 million users, adding 3.7 million users in January.

Third placed China Telecom claims 15% marketshare with a relatively paltry 162.8 million subscribers, but a much higher 44% 3G penetration rate, with 90.7 million 3G users in total after adding 3 million in January.

In late January, Apple chief executive Tim Cook met Cook met with China Mobile’s chairman Xi Guohua to negotiate the release of Apple iPhone on China Mobile’s network.

While the iPhone is available in China through China Mobile’s competitors, including China Unicom and China Telecom, negotiations with China Mobile have stalled for years over the topic of revenue-sharing between the two companies.

As SmartCompany reported in November, analysts estimate that Apple has fallen out of the top five smartphone vendors in China, holding just 8% of the market. A second survey showed that Android smartphones have claimed around 90% of the smartphone market in China.

Cook recently acknowledged that putting a “free” iPhone on a 24-month carrier subsidised contract is a strategy that won’t work in many developing nations. This led to a proliferation of lower-cost Android-based smartphones.