2014 China - Telecoms, Mobile, Broadband and Forecasts

China Mobile leads the way as it claims around 50 million 4G subscribers by end-2014

The government vowed, in China’s 12th Five-Year Plan (2011-2015), to continue reforming the economy and emphasised the need to increase domestic consumption in order to make the economy less dependent on exports for GDP growth. According to the International Monetary Fund, China’s share of worldwide GDP was to grow from under 2% in 1991 to 11% in 2014. This highlights the massive change underway in China. Telecommunications is an important vehicle to drive through this shift in economic prosperity.

Not surprisingly the telecom market experienced a settling in period after the government initiated a major industry restructure in 2008. China Mobile remains the dominant player but the 3G segment has seen a more equitable distribution of market share. The mobile sector was continuing to expand - at between 5% and 10% per annum – and, after a slow start, 3G services had gained momentum supported by a more mature value chain. Total mobile subscribers were close to 1.3 billion by the start of 2015, with almost 40% of these being 3G.

There had been a surprising surge in 4G/LTE services as China Mobile rapidly expanded its TD-LTE network and busily signed up subscribers. It claimed more than 50 million subscribers on its TD-LTE service by late 2014. The operator was making the most of its early lead on rivals China Unicom and China Telecom, both of which had been far more conservative in their deployment of TD-LTE networks, relying instead on Frequency Division (FD)-LTE technology – full licences for which had yet to be allocated – over the home-grown TD standard favoured by China Mobile and, importantly, the MIIT.

Confronted with a continuous decline in the fixed-line market, the government has again intervened to set aggressive targets for broadband services. Globally, China became the leading country in the number of Digital Subscriber Line (DSL) users in 2003 and by 2010 was the leading country in terms of FttX deployment. In the meantime, there has been a rapid development of internet businesses in China as the digital economy takes shape. The pace of development has escalated as more and more of the population gain access to the internet. The number of internet users had passed the 650 million mark by mid-2014, increasingly accessing websites via mobile phones.

China continues to build a substantial world-class telecommunications infrastructure and the investments show no sign of abating. As data traffic grows, the major operators are keeping pace by increasing both domestic and international connectivity through submarine and terrestrial cable links. The country also has high aspirations with its space program and has developed a local industry to develop, build and deploy communications satellites.

China is at the forefront of technology development, strongly supported by all levels of government. Amongst these initiatives are Cloud Computing and Smart Grid deployments and the building of Smart Cities that support the government’s climate change targets set out in the Twelfth Five Year Plan.

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