2007 Asia - Telecoms, Mobile and Broadband in China

Publication Overview

This annual report provides a comprehensive overview of the trends and developments in telecommunications and digital media markets in the booming market of China. Subjects covered include:

• Key statistics and selected analyses;
• Market and industry overviews;
• Regulatory environment, including progress on urgently needed market reforms;
• Major players (fixed and mobile);
• Infrastructure, including the planned rollout of 3G;
• Mobile voice and data markets, including development of local 3G platform, TD-SCDMA;
• Internet, VoIP, IPTV;
• Broadband (FttH, DSL, cable TV, wireless);
• Convergence and digital media.

Executive Summary

China’s telecommunications sector continues to be dynamic across most segments of the market. With the mobile sector still expanding at close to 20% annually coming into 2007, the long-awaited licensing of 3G services is getting closer and will surely give the market yet another boost. There remains a continuing need for major industry restructuring and there are expectations that the government will take action on this front in conjunction with the issuing of 3G licences.

With all eyes on the telecommunications market in China, 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 procrastinating 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 continued to figure prominently in the nation’s priority scheme as China prepares to showcase itself.

In a process that the western world sees as dithering, the awarding of 3G mobile licences had still not happened by early 2007 and looked as if it might not happen until early 2008. China nevertheless remains poised to become one of the world’s major next generation mobile players. But the failure of the government to act has caused considerable consternation in the wider market. Showing its determination to supporting the locally developed TD-SCDMA platform, it appeared that China would eventually adopt and license all three 3G standards, but that TD-SCDMA would some how be given a head start in the market. In fact by early 2007, it was looking as if China Netcom had been given an ‘unofficial’ licence to start rolling out a TD-SCDMA network.

The other big issue for China, the restructuring of the country’s major telecom operators, has seen high expectations of imminent government action dashed. It was still looking as if the government would move on this in conjunction with the 3G licensing. But by early 2007, not much had happened – except for the constant manoeuvring and positioning. Most of this focused on China Unicom, which was tipped to be split up as part of any restructuring process.

Key highlights

• China has the world’s largest mobile subscriber base, passing 450 million in early 2007; in addition to this there were more than 90 million ‘Little Smart’ limited mobility services.
• The country’s largest mobile operator, China Mobile, is the world’s largest in terms of subscribers; having passed 300 million in December 2006, it was still growing at more than 20% coming into 2007.
• While overall broadband Internet penetration remains low (4%), the number of broadband customers passed the 55 million mark in early 2007.
• China is ranked number two in the world behind the US in the number of broadband subscribers and is on track to become the world’s largest broadband market.
• China already has the highest number of DSL subscribers in the world (37.1 million subscribers by end-2006, followed by the US with 25.7 million).
• China has the largest number of fixed-line subscribers and VoIP users in the world.
• China has the largest cable TV network in the world.
• China’s terrestrial TV services reach approximately 95% of its 380 million households.
• In its push for digital TV, the Chinese Government intends to end analogue TV broadcasts by 2010.
• Preparation for the 2008 Beijing Summer Olympics were continuing in earnest into 2007.

  Mobile and limited mobility subscriber growth in China - 1995 - 2008

  Year	Mobile (million)	Limited mobility*(million)
  1995	3.6	-
  1996	6.8	-
  1997	14.0	-
  1998	23.8	-
  1999	43.0	-
  2000	86.5	-
  2001	145.0	-
  2002	206.6	10.5
  2003	268.6	31.0
  2004	317.2	61.2
  2005	392.0	85.7
  2006	445.8	91.0
  2007 (e)	520.0	95.0
  2008 (e)	600.0	100.0

  (Source: BuddeComm based on industry data)
  Note:*Limited mobility based on Personal Access System (PAS) services.

  Data in this report is the latest available at the time of preparation and may not be for the current year.

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