Last updated: 30 Apr 2008 Update History
Report Status: Archived
Report Pages: 230
Analyst: Stephen McNamara
Publication Overview
The China market, although large, still has low penetration rates and this is an excellent indicator for future growth. The report covers trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including IPTV developments. Subjects include:
Researcher:- Lisa Hulme-Jones
Current publication date:- April 2008 (14th Edition)
Next publication date:- March 2009
Executive Summary
The Chinese telecommunications market is the largest in the world. With the mobile sector still expanding at over 18% going into 2008, the long-awaited licensing of 3G services is getting closer and will surely give the market yet another boost. There continues to be a major need for industry restructuring and government action is expected in conjunction with the issuing of 3G licences. Telecommunications development figures prominently in the nation’s priority scheme as China readies itself for the 2008 Beijing Olympics.
The Chinese telecom market is serviced by six main operators: China Telecom, China Netcom, China Mobile, China Tietong (formerly China Railcom), China Satcom and China Unicom. State agencies have been discussing possible mergers among the operators as part of the industry restructuring. In the past five years, as one of the country’s ‘pillar industry’, China’s telecom service industry has grown at a faster rate than the country’s GDP. According to official statistics from the Ministry Information of Industry, revenue from basic telecom service contributes approximately 2.1% of the country’s GDP, while value-added telecom services contribute a further 3.2% to total GDP.
By the end of 2007, mobile penetration in China stood at 41.4%, following a record level of subscriber additions during the year. The robust growth was due to an expanding rural market and the increasing number of people who have acquired more than one mobile phone. Both China Mobile and China Unicom have invested considerably in network improvements, especially in rural China, where approximately 750 million of China’s population resides and teledensity is just 12%. For many of China’s tech-savvy citizens, the mobile phone is becoming the preferred means of using the Internet. The number of people who access the Internet through their mobile phone surged to 50 million in 2007 from 17 million at the end of 2006, about a quarter of China’s Internet users. For more information, see chapter 8, page 144.
Since the implementation of one-way charging implemented nationwide in the middle of 2007, the substitution of fixed-line services by mobile networks has accelerated. While China Mobile and China Unicom added over 86 million users, or roughly 7 million a month, the fixed-line customer base shrank by 2.3 million to around 365 million, a penetration of 27.8%. By February 2008, the number of mobile phone users reached 565 million, exceeding the fixed-line subscription base of 362 million. Looking ahead, total mobile subscriber numbers are forecast to pass 600 million in 2008, but crucially market penetration will remain below 50%, meaning the Chinese market still has a lot of untapped potential.
China became the second largest broadband market in the world after the US in 2004, after it had passed Japan earlier in that year and South Korea in 2003. Falling equipment prices, low service tariffs and strong consumer demand for services such as online gaming and file sharing have been some of the reasons behind the impressive growth of broadband. There is little doubt that China will soon pass the US to become the world’s top broadband market. According to the annual survey conducted by China Internet Network Information Centre, going into 2008, Internet users stood at 210 million, over 75% using broadband for Internet access. For more information, see chapter 6, page 71.
Key highlights:
Internet, broadband, IP telephony and telecoms statistics for China – 2004 - 2007
Sector |
2004 |
2005 |
2006 |
2007 | |
Internet | |||||
Internet users (million) |
94 |
111 |
137 |
210 | |
Annual Growth |
18.2% |
18.1% |
23.4% |
53.3% | |
Internet subscribers (million) |
71.7 |
73.2 |
79.5 |
87.4 | |
Number of Chinese websites (million) |
0.67 |
0.69 |
0.84 |
1.5 | |
Broadband (million subscribers) | |||||
DSL |
16.9 |
26.3 |
36.9 |
52.0 | |
Total |
25.8 |
37.5 |
51.8 |
66.4 | |
Subscribers to Telecoms Services (million) |
|||||
Subscriber fixed-line telephones |
311.7 |
350.4 |
367.8 |
365.4 | |
Penetration |
24% |
26.9% |
27.9% |
27.7% | |
Mobile phones |
317.2 |
393.4 |
461.1 |
547.3 | |
Penetration |
24.4% |
30.2% |
34.9% |
41.4% | |
(Source: BuddeComm based on MII, Global Mobile, Point Topic and CNNIC data)
For those needing high level strategic analysis and objective analysis on China, this report is essential reading and gives further information on:
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