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.

Table of Contents

2.1Overview of China’s telecom market
2.2Fixed-line and mobile phones in China
2.2.1Fixed-Mobile Convergence (FMC)
2.3China’s Tenth Five Year Plan
2.3.1Budget for Information and Communications Technology (ICT)
2.4Preparations for the 2008 Beijing Summer Olympics
2.5Market highlights
2.5.1Year 2006
2.5.2Year 2005
2.5.3Year 2004
2.5.4Year 2003
3.2Regulatory authority
3.2.1Ministry of Information Industry (MII)
3.3State Standardization Administration
3.4State Telecommunications Management Commission
3.6.1Qualified Foreign Institutional Investor (QFII)
3.7Restructuring of the telcos in China
3.7.1Break up of China Telecom
3.8World Trade Organization (WTO) accession
3.8.1Final concessions
3.8.2Foreign investment after WTO accession
3.8.3Initial impact
3.9Telecom regulatory legislation
3.9.1Role of the MII
3.9.3Foreign participation
3.9.4Private Bank Exchange (PBX) operators
3.9.5Service quality and universal service
3.9.6Service charges
3.9.7Other issues
3.11Calling-Party-Pays (CPP)
3.12Service quality
3.13Telecom equipment market regulations
3.13.1Telecom equipment Network Access Licence
3.14Reorganisation of fee structures
3.15Yearly summaries of major regulatory developments
3.15.1Year 2006
3.15.2Year 2005
3.15.3Year 2004
3.15.4Year 2003
4.1Overview of major players
4.1.1Analysis – business restructuring in China – January 2007
4.1.2Analysis – China’s Telecoms industry restructuring – April 2007
4.2China Mobile
4.3China Netcom
4.3.1China Netcom IPO
4.3.2Jitong Corporation
4.4China Satcom
4.5China Telecom
4.6China Tietong (formerly China Railcom)
4.7China Unicom
5.1Overview of infrastructure developments in China
5.1.1Official condemnation of redundant network construction
5.1.2Analysis – China’s telcos need structural separation – January 2007
5.2Regulatory issues
5.2.1Tenth Five-Year Plan
5.3National telecom network
5.3.1Backbone Internet networks
5.4International infrastructure
5.4.1Submarine cable infrastructure
5.4.2Satellite infrastructure
5.5Fibre-to-the-Home (FttH)
5.5.1Market overview
5.5.2Gigabit Ethernet/Fttx+LAN
5.6Broadband over Power Line (BPL)/powerline communications (PLC)
5.7Next Generation Networks (NGNs)
5.7.1World’s largest NGN in the works
5.7.2China Railway fibre network
5.7.3High-speed network technologies
5.7.4Data and Multi-Media Communications Network
5.8IP-Virtual Private Network (IP-VPN)
5.8.1Growth of IP-VPN in China
5.8.2Peer-to-Peer (P2P) streaming
5.8.3International Ethernet private line (IEPL)
5.9IP telephony/Voice over Internet Protocol (VoIP)
5.9.1Market overview
5.9.2Equipment developments
5.9.3Major VoIP networks
5.10Telecoms & IT
5.10.1Data communications
6.1Broadband market
6.1.2Broadband service providers
6.1.3Broadband networks overview
6.1.4Cable modems
6.1.5Digital Subscriber Line (DSL)
6.1.6Fibre-to-the-Home (FttH)
6.1.7Broadband over powerline (BPL)
6.1.8Wireless broadband
6.2Internet market
6.2.2Internet statistics
6.2.5Regulatory issues
6.2.6Internet regulations and censorship
6.2.7E-payment systems
6.2.11Instant messaging (IM)
6.2.12Search engines
7.1Overview of media convergence
7.2Triple play models
7.3Digital TV
7.3.1Broadband TV
7.3.2Digital cable TV
7.4Television broadcasting in China
7.5Satellite TV
7.5.1Market overview
7.5.2Regulatory issues
7.5.3Multichannel Multipoint Distribution Systems (MMDS)
7.5.4Major satellite TV players
7.6Digital terrestrial TV (DTTV)
7.6.1Market overview
7.6.2Regulatory issues
7.6.3Hong Kong’s concerns over mainland terrestrial digital TV
7.6.4Cost concerns over terrestrial digital TV in China
7.7Interactive TV
7.7.1Market overview
7.7.2Selected interactive TV players
8.1Overview of China’s mobile market
8.1.1Analysis – prevalence of mobile phones in China’s city centres
8.1.2Statistical overview
8.2Regulatory issues
8.2.1Price wars
8.2.2Subscriber registration
8.2.3Calling Party Pays (CPP)
8.3Mobile technologies
8.3.1Market overview
8.3.3Code Division Multiple Access (CDMA)
8.3.4Personal Access System (PAS)/Personal Handy System (PHS)
8.3.5Third Generation (3G) mobile
8.3.6Fourth Generation (4G) mobile
8.3.7Mobile handsets
8.4Major mobile operators
8.4.2China Mobile
8.4.3China Unicom
8.4.4Other mobile operators
8.4.5Mobile multimedia alliance
8.5Mobile voice services
8.5.1Prepaid cards (SIM and PIM cards)
8.5.2Satellite mobile
8.6Mobile data services
8.6.1Market overview
8.6.2Short Message Service (SMS)
8.6.3Multimedia Messaging Service (MMS)
8.6.4Wireless Application Protocol (WAP)
8.6.5General Packet Radio Service (GPRS)
8.6.6Push-to-Talk (PTT)
8.6.7Enhanced Data for GSM Evolution (EDGE)
8.6.8Broadband wireless data services
8.7Mobile applications
8.7.1Market overview
8.7.2Global positioning systems (GPS)
8.7.4Mobile Video-on-Demand (VoD)
8.7.5Mobile gaming
8.7.6Instant Message (IM) search function
8.7.8Push email
Exhibit 1 – China’s agreed schedule for telecom liberalisation
Exhibit 2 – Restructuring – scenario 1
Exhibit 3 – Restructuring – scenario 2
Exhibit 4 – Selected Chinese satellite service providers and satellites
Exhibit 5 – China Satcom’s satellite fleet
Exhibit 6 – ‘Enemies of the Internet’ – December 2005
Exhibit 7 – Types of telecom convergence
Exhibit 8 – BesTV Corporation
Exhibit 9 – Jiangsu Province
Exhibit 10 – Jiangsu IPTV application
Exhibit 11 – Overview of ‘eye will’
Exhibit 12 – Restructuring – scenario 1
Exhibit 13 – Restructuring –cenario 2

Table 1 – Mobile and limited mobility subscriber growth in China – 1995 - 2008
Table 2 – Country statistics China – 2006
Table 3 – Telecom revenue and investment statistics – 2005
Table 4 – Telephone network statistics – September 2006
Table 5 – Internet user statistics – 2006
Table 6 – Broadband statistics – 2006
Table 7 – Mobile statistics – 2006
Table 8 – National telecommunications authorities
Table 9 – Fixed-lines, mobile subscriptions and penetrations – 1998 - 2006
Table 10 – Fixed lines in service and penetration – 1998 - 2006; 2010
Table 11 – Distribution of bandwidth (Mb/s) – 2003 - 2006
Table 12 – Overview of regional/international fibre optic cable networks
Table 13 – Public data and multimedia users – 1998 - 2000; 2005; 2010
Table 14 – Broadband subscriber growth – 2000 - 2007
Table 15 – Broadband subscribers and annual growth by access type – 2006
Table 16 – Broadband subscribers and households - 2006
Table 17 – Cable modem Internet subscribers – 2000 - 2007
Table 18 – DSL Internet subscribers – 2000 - 2007
Table 19 – CNNIC Internet survey – 2005
Table 20 – Internet users – 1996 - 2007
Table 21 – Internet subscribers – 1995 - 2007
Table 22 – Registered domain names by code – February 2007
Table 23 – Internet provider statistics – 2006
Table 24 – Share of China’s online search market – 2005 - 2006
Table 25 – Jiangsu Telecom broadband users – 2002 -2006
Table 26 – Broadband service revenue – 2002 - 2006
Table 27 – Overview of cable TV market – 2006
Table 28 – Cable TV household growth – 1996 - 2006
Table 29 – Mobile subscribers by operator and annual change – 2006
Table 30 – Mobile subscriber growth – 1995 - 2007
Table 31 – Little Smart subscribers – 2002 - 2007
Table 32 – Prepaid mobile subscribers by operator – 2005

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Broadband Fixed
Mobile Communications (voice and infrastructure)
Strategies & Analyses (Industry & Markets)
Telecoms Infrastructure

Number of pages 201

Status Archived

Last updated 17 May 2007
Update History

Analyst: Stephen McNamara

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