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NFC Times Exclusive: Chinese mobile operators China Mobile and China Telecom have begun ordering what is expected to be tens of millions of low-cost NFC SIM cards this year, as they prepare to expand their NFC rollouts, while China Mobile is also planning to pay device makers to put NFC technology in their phones, sources told NFC Times.

The two telcos have finalized their SIM tenders that include planned orders for a combined 150 million to perhaps 200 million NFC SIMs, and each operator has selected a slate of at least six SIM vendors to supply the cards, sources told NFC Times. (See table in full story.) 

A tender request from China’s other major operator, China Unicom, is expected soon, perhaps adding 20 million more cards. It remains to be seen how many SIMs the Chinese operators actually order this year, with many of those decisions taking place at the provincial level for China Mobile. 

But the expected huge volumes along with strong competition among Chinese vendors and a couple of Western suppliers also submitting bids have yielded rock-bottom prices for the expected 1-megabyte NFC SIMs. Prices are likely to be a little more than US$1, with one source expecting sub-$1 prices. 

That is at least three times less than prices that leaked for NFC SIMs with comparable memory last year in other countries and in some cases several times less. Vendors closely guard their NFC SIM prices and would not confirm the prices. 

Meanwhile, sources say China Mobile, China’s largest telco, wants to make sure there are plenty of NFC devices to host the low-cost SIMs this year, which is why it plans to pay to cover the NFC hardware and development costs and add other incentives for OEMs to incorporate NFC technology in their devices, including lower-end devices, sources said. 

The telco had come up short last year in meeting both its NFC SIM and device rollout goals last year. 

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Table: Issued or planned tender requests by China’s three major telcos, including number of NFC SIMs, approximate prices and vendors selected 

Among Topics Covered:

• Prices bid by vendors on large NFC SIM tenders issued by China Mobile and China Telecom
• Number of cards in Chinese telco tenders and names of vendors selected
• Amount of subsidy sources say China Mobile plans to pay to OEMs to encourage them to introduce handsets with NFC technology
• Possible impact of low SIM prices in China on prices for the technology in other markets
• Size and types of applications expected for Chinese NFC SIM cards
• Bid amount by Gemalto for supply of NFC SIMs to China Telecom, according to sources
• Implementation problems last year for NFC phones by China Mobile
• Expected NFC SIM tender amount by China Unicom
• Low expectations for Chinese market for host-card emulation

Among companies and organizations mentioned:

China Mobile
China Telecom
China Unicom
Eastcompeace
Gemalto
Giesecke & Devrient
Tianyu
Hengbao 

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