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2006 Asia - Telecoms, Mobile and Broadband in China


Attention: There is an updated edition available for this report.

This report provides a comprehensive overview of the trends and developments in telecommunications, broadcasting and pay TV markets in China. Subjects covered include:

Key Statistics
Market and Industry Overviews
Regulatory Environment
Major Players (fixed and mobile)
Infrastructure
Mobile Voice and Data Markets
Internet, VoIP, IPTV
Broadband (FttH, DSL, cable TV, wireless)
Convergence and Digital Media


The powerhouse that is the telecommunications market in China continues to generate great interest worldwide. There is no doubting its substantial growth momentum and potential. Nevertheless the market presents many contradictions. Telecommunications in China can be characterised by creativity and daring one minute, and by caution and dithering the next. In fact, it is often out of step with what is happening in other parts of the world. With the Beijing Olympics in 2008, telecommunications development has been figuring prominently in the nation’s priority scheme as China prepares to showcase itself.

The two big topics of interest throughout 2005 and into 2006 were awarding of Third Generation (3G) mobile licences and the restructuring of the country’s major telecom operators. There were high expectations of imminent government action in respect of these two crucial areas of the industry. In fact, it was anticipated that the government would move on both simultaneously. But by early 2006, not much had happened.

On the 3G front, China remained poised to become one of the world’s major players. But what shape its role would take was not yet clear. The local development of the Time Division-Synchronous Code Division Multiple Access (TD-SCDMA) platform and its acceptance as one of three international 3G standards had been controversial, but had shown a fierce commitment on the part of China to becoming a significant global player. In early 2006, the government was steering the local industry through the technology adoption phase for TD-SCDMA and appeared to be readying for the awarding of licences later in 2006. One view was that all three 3G standards would be adopted and licensed, but that TD-SCDMA would some how be given a head start in the market.

As for the countries telecom operators, the link between 3G and restructuring is certainly an important one. In early 2006, the Ministry of Information Industry selected China Telecom, China Netcom and China Mobile to build out pre-commercial TD-SCDMA networks across the country. This move reinforced the belief that the country’s two giant fixed-line operators - China Telecom and China Netcom - would be awarded 3G licences, thereby making it imperative that the government move on a major restructuring of the industry. The four major telecom players - China Telecom, China Netcom, China Mobile and China Unicom - have been struggling with declining growth in the maturing high-end user market, as well as from the reduction or end of network acquisition opportunities from their parent companies. It is clearly time to restructure.

Preparations for the 2008 Beijing Summer Olympics were continuing in earnest into 2006, making it all the more surprising that the government had not made an early decision on 3G licences. There was not going to be much time to roll out any significant network, let alone much sure it is working properly, before the Olympics. Nevertheless, the country has been busy building its massive telecommunications infrastructure, together with a huge subscriber base to match:

  • China has a comprehensive network of fibre optic cables criss-crossing the whole nation;
  • China will install more access lines than any other country in the lead up to the Olympics;
  • China’s voice market is enormous, with the largest number of fixed-line subscribers and Voice over Internet Protocol (VoIP) users in the world;
  • China Mobile is the world’s largest mobile operator by subscribers (250 million in January 2006);
  • China’s embrace of SMS makes it the world’s top user of this service;
  • China has the second most broadband services after the US, (There is still much room for growth.);
  • China’s broadband market is on track to become the world’s largest;
  • China has the largest cable TV network in the world;
  • China’s terrestrial TV services reach approximately 95% of its 380 million households;
  • In the push for digital TV, the government intends to end analogue TV broadcasts by 2015.

1. KEY STATISTICS
2. TELECOMMUNICATIONS MARKET
2.1 Overview of China’s telecom market
2.2 Analysis - Will China’s economic boom last?
2.3 Fixed-line and mobile phones in China
2.4 China’s Tenth Five Year Plan
2.4.1 Budget for information and communications technology (ICT)
2.5 Preparations for the 2008 Beijing Summer Olympics
2.6 Market highlights
2.6.1 Year 2006
2.6.2 Year 2005
2.6.3 Year 2004
2.6.4 Year 2003
3. REGULATORY ENVIRONMENT
3.1 Overview
3.2 The regulator - Ministry of Information Industry (MII)
3.2.1 State Standardization Administration
3.2.2 State Telecommunications Management Commission
3.3 Competition
3.4 Liberalisation
3.4.1 Qualified Foreign Institutional Investor (QFII)
3.5 Restructuring of the telcos in China
3.5.1 China Telecom split
3.6 World Trade Organization (WTO) accession
3.6.1 Analysis - WTO impact on the telecom sector in China
3.6.2 Final concessions
3.6.3 Foreign investment after WTO accession
3.7 Telecom regulations 2001
3.7.1 Role of the MII
3.7.2 Operators
3.7.3 Foreign participation
3.7.4 Private Bank Exchange (PBX) operators
3.7.5 Service quality and universal service
3.7.6 Service charges
3.7.7 Other issues
3.8 Reduction in call charges
3.9 Calling-Party-Pays (CPP)
3.10 Telecom equipment market regulations
3.10.1 Telecom equipment Network Access Licence
3.11 Reorganisation of fee structures
3.12 Yearly summaries of major regulatory developments
3.12.1 Year 2006
3.12.2 Year 2005
3.12.3 Year 2004
3.12.4 Year 2003
4. MAJOR TELCOS
4.1 Overview of major players
4.1.1 Analysis - business restructuring
4.1.2 Analysis - telecoms industry restructuring
4.2 China Mobile
4.3 China Netcom
4.4 China Netcom IPO
4.5 Jitong Corporation
4.6 China Satcom
4.7 China Telecom
4.8 China Tietong (formerly China Railcom)
4.9 China Unicom
4.9.1 Possibility of mergers with China Telecom and China Netcom
5. TELECOMMUNICATIONS INFRASTRUCTURE
5.1 National telecom network
5.1.1 Official condemnation of redundant network construction
5.1.2 Analysis - China’s telcos need structural separation
5.2 Next Generation Networks (NGNs)
5.2.1 World’s largest NGN in the works
5.3 China Railway fibre network
5.4 High-speed network technologies
5.4.1 Synchronous Digital Hierarchy (SDH)
5.4.2 Hybrid Fibre Coaxial (HFC) systems
5.4.3 Dense Wave Division Multiplexing (DWDM)
5.5 Data and Multi-Media Communications Network
5.5.1 ChinaDDN
5.5.2 ChinaPAC
5.5.3 ChinaFRN
5.6 Regulatory issues
5.6.1 Tenth Five-Year Plan
5.7 Backbone Internet networks
5.7.1 ChinaNet
5.8 Fibre-to-the-Home (FttH)
5.8.1 Market overview
5.8.2 Gigabit Ethernet / Fttx+LAN
5.9 Broadband over Powerline (BPL) / powerline communications (PLC)
5.10 International submarine cable infrastructure
5.10.1 Overview of international fibre optic network developments
5.10.2 Regional / international fibre optic cable projects
5.11 International satellite infrastructure
5.11.1 Overview
5.12 Data communications
5.12.1 Public data networks
5.13 IP-Virtual Private Network (IP-VPN)
5.14 Growth of IP-VPN in China
5.15 Peer-to-Peer (P2P) streaming
5.16 IP telephony / Voice over Internet Protocol (VoIP)
5.16.1 Market overview
5.17 Equipment developments
5.18 Major VoIP networks
5.18.1 China Unicom
5.18.2 China Telecom
5.18.3 China Netcom
5.18.4 China Mobile
5.18.5 Jitong Network Corporation
5.18.6 China Satcom
6. BROADBAND AND INTERNET MARKET
6.1 Overview
6.2 Broadband service providers
6.2.1 China Telecom
6.2.2 Shanghai Symphony Telecom
6.2.3 China Netcom and China Online
6.2.4 China Energy Ventures Corp (formerly China Broadband Corp)
6.2.5 Great Wall Broadband Network Service (GWBN)
6.2.6 Alliance between GWBN and China Unicom
6.2.7 BT / ViaNet
6.2.8 SpeedCast
6.3 Broadband networks
6.3.1 Overview
6.3.2 Cable modems
6.3.3 Asymmetrical Digital Subscriber Line (ADSL)
6.3.4 Ethernet DSL
6.3.5 Broadband over powerline (BPL)
6.3.6 Wireless broadband
6.3.7 Analysis - The Chinese WAPI standard
6.3.8 Wireless Local Loop (WLL)
6.3.9 Broadband Fixed Wireless Access (BFWA) / Local Multipoint Distribution Service (LMDS)
6.3.10 Broadband via satellite
6.4 Internet market
6.4.1 Overview
6.4.2 Internet statistics
6.5 E-services
6.5.1 Overview
6.5.2 E-commerce
6.5.3 Regulatory issues
6.5.4 Internet regulations and censorship
6.5.5 Google.cn
6.5.6 E-payment systems
6.5.7 E-government
6.5.8 E-entertainment
6.6 Search engines
6.6.1 Analysis - dubious ethical behaviour by search engines to win market share in China
7. CONVERGENCE
7.1 Overview of media convergence
7.2 Triple play models
7.3 Television broadcasting in China
7.4 Broadband TV
7.4.1 TV-over-DSL / IPTV
7.4.2 Analysis - growth of broadband and IPTV in China
7.5 Digital cable TV
7.5.1 Cable TV market overview
7.5.2 Regulatory issues
7.5.3 Cable TV goes digital
7.5.4 Cable TV infrastructure
7.5.5 Major cable TV players
7.5.6 Video-on-Demand (VoD)
7.5.7 Videoconferencing
7.6 Satellite TV
7.6.1 Market overview
7.6.2 Regulatory issues
7.6.3 Multichannel Multipoint Distribution Systems (MMDS)
7.6.4 Major satellite TV players
7.7 Digital terrestrial TV
7.7.1 Market overview
7.7.2 Regulatory issues
7.7.3 Hong Kong’s concerns over mainland terrestrial digital TV
7.7.4 Cost concerns over terrestrial digital TV in China
7.8 Interactive TV
7.8.1 Market overview
7.8.2 Selected interactive TV players
8. MOBILE COMMUNICATIONS
8.1 Market overview
8.1.1 Analysis - prevalence of mobile phones in China’s city centres
8.2 Statistical overview
8.3 Regulatory issues
8.3.1 Price wars
8.4 Mobile technologies
8.4.1 Market overview
8.4.2 Global System for Mobiles (GSM)
8.4.3 Code Division Multiple Access (CDMA)
8.4.4 Personal Access System (PAS) / Personal Handy System (PHS)
8.4.5 Mobile handset market
8.4.6 Third Generation (3G) mobile
8.4.7 TD-SCDMA
8.4.8 WCDMA
8.4.9 CDMA 2000
8.4.10 High-Speed Downlink Packet Access (HSDPA)
8.4.11 Fourth Generation (4G) mobile
8.5 Major mobile operators
8.5.1 Overview
8.5.2 China Mobile
8.5.3 China Unicom
8.5.4 Other mobile operators
8.5.5 Mobile multimedia alliance
8.6 Mobile voice services
8.6.1 Prepaid cards (SIM and PIM cards)
8.6.2 Satellite mobile
8.6.3 Roaming
8.7 Mobile data services
8.7.1 Market overview
8.7.2 Short Message Service (SMS)
8.7.3 Multimedia Messaging Service (MMS)
8.7.4 Wireless Application Protocol (WAP)
8.7.5 General Packet Radio Service (GPRS)
8.7.6 Push-to-Talk (PTT)
8.7.7 Enhanced Data for GSM Evolution (EDGE)
8.7.8 Broadband wireless data services
8.7.9 BlackBerry
8.8 Mobile applications
8.8.1 Market overview
8.8.2 Global positioning systems (GPS)
8.8.3 M-commerce
8.8.4 Mobile Video-on-Demand (VoD)
8.8.5 Mobile gaming
8.8.6 Ringtones
9. GLOSSARY OF ABBREVIATIONS
Exhibit 1 - China’s agreed schedule for telecom liberalisation
Exhibit 2 - Restructuring Scenario 1
Exhibit 3 - Restructuring Scenario 2
Exhibit 4 - China Satcom satellite fleet
Exhibit 5 - Types of telecom convergence
Exhibit 6 - First democratic sms-based ‘elections’ for Idol


Table 1 - Country statistics China - 2005
Table 2 - Telecom revenue and investment statistics - 2005
Table 3 - Telephone network statistics - 2005
Table 4 - Internet provider statistics - 2005
Table 5 - Internet user statistics - 2005
Table 6 - Broadband statistics - 2005
Table 7 - Mobile statistics - 2005
Table 8 - National telecommunications authorities
Table 9 - Fixed-lines, mobile subscriptions and penetrations - 1998 - 2005
Table 10 - Fixed lines in service and penetration - 1998 - 2005, 2010
Table 11 - Distribution of bandwidth (Mb/s) - 2002 - 2005
Table 12 - Overview regional / international fibre optic cable networks
Table 13 - Selected Chinese satellite service providers and satellites
Table 14 - Public data and multimedia users - 1998 - 2000, 2005, 2010
Table 15 - Broadband subscriber growth - 2000 - 2006
Table 16 - Broadband subscribers and annual growth by access - 2005
Table 17 - Cable modem Internet subscribers - 2000 - 2006
Table 18 - DSL Internet subscribers - 2000 - 2006
Table 19 - CNNIC Internet surveys - 2003 - 2005
Table 20 - Internet users - 1996 - 2005
Table 21 - Internet host computers - 1994 - 2005
Table 22 - Registered domain names by code - January 2006
Table 23 - Purchases* on e-commerce websites - 2004 - 2005
Table 24 - Share of China’s online search market - March 2005
Table 25 - Overview of cable TV market - 2005
Table 26 - Cable TV household growth - 1996 - 2005
Table 27 - Mobile subscribers by operator, system and annual growth - 2005
Table 28 - Mobile subscriber growth - 1995 - 2006
Table 29 - ‘Little Smart’ subscriber growth - 2002 - 2006
Table 30 - Prepaid mobile subscribers by operator - December 2005

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