Caijing Magazine

The report said the new office will be combined with the Ministry of Information Industry, the State Administration of Radio, Film and Television (SARFT), and the Information Industry Office of the State Council, or cabinet.

The report said separate regulators are hindering the development of businesses that have broadcast, telecom and internet components, such as IPTV. There are few who would argue with that.

Interestingly the report quoted an unnamed industry source as saying that the commercialization of 3G mobile technology requires a multi-industry framework. This may not be strictly true — it has been managed in other countries in other ways — the truth is that China has made something of a pig’s breakfast sorting out 3G because there were so many forces involved. An integrated approach with someone make decisions of overall benefit is plainly needed.

One of the industries that has already managed some measure of integration is satellite.

Citing Huang Baozhong, the company’s vice president, the report said the newly established China Direct Broadcast Satellite unifies the broadcast and telecom elements in the satellite business. And perhaps that gives an example for the rest of the communications industry. China Direct Broadcast Satellite was formed from assets contributed by China Satellite Communications, China Orient Telecommunications Satellite and Sino Satellite Communications.

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The State Development and Investment Corp invested RMB5 billion (US$684 million) in the new firm to take a 35% stake. The new firm’s registered capital is RMB3 billion.

The 35 percent stake will be sold by the China Academy of Telecommunications Technology, a unit of the China’s top telecoms regulator, the Ministry of Information Industry.

CATT also holds a 30.34 percent stake in listed Datang Telecom Technology Ltd , a maker of equipment for wireless networks and supports a home-grown TD-SCDMA third-generation mobile standard.
Source: Shanghai Daily

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Which is not encouraging for he did not mention the specific amount or how the cost was calculated.

I am writing this in a hotel in Thailand. Today I have phoned Australia three times, Burma twice and the UK twice and it has cost pocket money. Totally insignificant.

Telephone calls effectively cost the industry nothing omce the infrastructure is in place. Where the money goes is in maintaining large companies to operate systems which simply do not need that much over-structure.

China is a case in point where the telecommunications industry, dominated by several state-owned giants, reaps handsome profits by charging monopolistic prices.

The government has now urged the companies to offer lower pricing packages. But the government owns the companies it is urging. Thus does bureaucracy screw itself up.

Things are changing — but not fast enough.

China Mobile started to offer charge packages that offer free incoming calls in February. Similar packages were also adopted by rival China Unicom.

Price cuts did not bring down the mobile operator profits because the 539 million Chinese mobile users were encouraged to make more phone calls. China Mobile registered RMB37.9 billion net profits (US$5.19 billion ), up 25.7% in the first half.

Fixed-lines are getting less attractive. While 39.9% of the population have a mobile phone, only 28.3% have fixed-lines.

The telecom business volume reached RMB1,680.86 billion, up 27% in the first 11 months last year, and the business revenue amounted to RMB663.92 billion, up 10.9%. With that sort of money coming in it is vital China gets it right, gets it world competitive, makes it totally inexpensive. And, yet, so far it has not even managed to launch 3G which much of the rest of the world has had for several years.
Source: Jongo News

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Government-set roaming tariffs have long been a target of criticism in China.

Although a de facto caller-pays scheme has replaced the two-way charging system— in which both caller and receiver pay for calls — the roaming fees have remained largely unchanged for years.

Currently, China Mobile users typically pay RMB0.60 a minute to receive calls if they travel to another city.

Last Maythe NDRC and the MII held an opinion poll.

The poll found 64% of respondents want roaming fees scrapped.

According to Guotai Junan Securities research, the roaming fees could be cut by as much as 47%.

Reform would have a bigger impact on China Mobile, the larger of the two cellular operators, as roaming fees are one of its major revenue sources.

Li Gang, vice-president of China Unicom and former chief of China Mobile’s Guangdong subsidiary, reportedly said China Mobile’s revenue from roaming fees was RMB49 billion($6.71 billion) in 2005, while Unicom generated only billions of yuan.

That accounted for about one-fifth of China Mobile’s total revenue of RMB243 billion in 2005. In 2006, its total revenue was RMB295.4 billion with a net profit of RMB66 billion.

Lu Tingjie, a professor at the Beijing University of Post and Telecommunications, said roaming fees in China are ‘unjustifiably high’ and lowering price is in line with the global trend.
Source: Jongo News

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In Japan and probably in China — mobile devices have become the way you get on to the Internet. And thus it may be Google’s upcoming mobile phone OS may be perfectly suited to users in this region.

Aloysius Choong, IDC Asia-Pacific senior analyst for personal systems, said, quite logically, the the main attraction Android holds for Asia could initially be the Google brand name.

But is if it is as ‘open, flexible and extensible’ as we are promised it may prove to be very attractive to an increasingly-sophisticated mobile audience in the region.

Aloysius Choong said, ‘Asian users typically have higher demands. As we move toward 3.5G, especially with fixed-rate data service plans, more will get onboard the mobile Internet platform. The more you use your phone to access the Internet, the more you expect in terms of extensibility, power and customizability.’

He actually quite possibly speaks like that. Analysts get into the way of it. Note also he did not mention that China does not even have 3G as yet although it should be by April next year.

Google’s extensive network of developers through the Open Handset Alliance — established by Google build and support the platform — may therefore, to use an analyst term, ‘maximize the experience.’

Google’s mobile platforms director Andy Rubin, one of the first few who worked on Android, said in a previous report that he expects the first Android devices to be mid- to high-end phones ‘because of the data access capabilities of the platform’.

In which case there might be a slight problem because the massive growth area at the moment it in the low cost phones.

Consumers are expected to receive the first Android-enabled device by the middle of this year. HTC, one of four handset developers in the Open Handset Alliance, is likely to be the first developer to ship an Android device.
Source: Business Week

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According a report from the National Development and Reform Commission’s research bureau, the acquisition of Unicom assets by fixed-line operators China Telecom, shown in our illustration, and China Netcom is the most efficient way to restructure the telecom industry.

The report suggests, correctly, that after Unicom’s assets are distributed, the acquirers can also introduce foreign investors and raise capital to better compete with China Mobile.

The report said to facilitate the rebalancing of the industry, the two fixed-line operators should obtain mobile licenses. China Mobile can then be granted a fixed-line license when conditions are ‘right.’

The report said China Mobile must not be broken up, even though it believes China Mobile’s dominance has hindered the development of the telecom industry.

China Mobile reported nine months net profit of RMB59.88 billion, exceeding the combined profit of the other three major operators.

China Telecom and China Netcom both reported fixed-line subscriber losses in November due to falling mobile telecom service fees.
Source: CNN Money

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However, the sales volume was expected to drop 0.3% to RMB166.1 billion (US$22.66 billion) because more low-end mobile phones were sold during the period.

The average price of a mobile in China dropped from RMB1,408 in 2006 to RMB1,142 this year. In addition, more than 20% of mobiles sold were less than RMB500.

Li Xuefang, a CCID consultant, cited increased demand for tailored phones by mobile operators and rising low-end mobile users in rural areas as the main reasons for the price drop.

She added that promotions by domestic manufacturers of mid- and low-end mobiles also brought down the general selling price.

In the third quarter of 2007, Chinese brand mobiles accounted for 33.4% market share, up from 31.1% in the second quarter.

CCID also predicted mobile sales, driven by rising low-end mobile users and the forthcoming launch of the third generation mobile networks, would exceed 200 million units in 2009.

But that is pure guesswork. The key is the date that 3G becomes widely available. At which point the market will change dramatically. In Japan the mobile is already being seen as a replacement for the computer. In China that will be a major trend so anyone predicting figures has to first know when 3G will be widely available. A good guess would be April next year. But that is only a guess.
Source: China.org.cn

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China’s telecommunications fees decreased 13.6% in 2007 and 53% over the past five years.

Wang Xudong said, ‘Telephone fees are of wide concern in the society, and the level will continue to drop in 2008.’

There will be a free incoming call policy nationwide and the high roaming fee level will be severely trimmed in 2008.

Instead of focusing profits on voice communication costs, Chinese carriers will now try cash in on data-based services, from broadband video, ringtone download and mobile stock information.

In this they are right.

The mobile phone is more and more taking the place of the personal computer as an information provider. The illustration is of Wan Xudong at the demonstration of June, a 3rd generation multimedia and satellite digital mobile broadcasting service. He does not look over-encouraging.
Source: China.org.cn

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China Netcom wants to use its global telecoms network to serve the voice and data needs of Chinese companies with operations in Europe. It also wants to get the telecom business of European companies with operations in China.

The move by China Netcom is part of efforts by Chinese companies to expand overseas under the Beijing government’s ‘go global’ policy. The government wants Chinese companies to compete with US, Japanese and European companies.

China Netcom’s telecoms network extends to cities in Asia, Europe and the US, and it is looking to expand further.

The London office was opened by Jidong Zhao, China Netcom’s senior vice-president.

It will be up against serious competition — European and US telecoms companies such as BT, AT&T and Verizon Communications.

Note that China Telecom, China’s largest fixed-line company, opened a London office in 2005.

Huawei and ZTE, the increasingly powerful Chinese telecoms equipment makers, opened London offices in 2002 and 2004.

Telefónica, the Spanish telecoms company with a leading presence in Latin America, has said it hopes to increase its minority stake in China Netcom to 10% by the end of the year.

Meanwhile Vodafone, the UK mobile phone group, has a 3% stake in China Mobile, China’s largest mobile operator, which plans to open a London office early next year.
Source: Financial Times

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The investment will finance the development of the long-awaited home-grown 3G technology TD-SCDMA (time division synchronous code division multiple access), and therefore hasten 3G licenses in China. This is the biggest single investment by a Chinese insurance firm in telecommunications.

Wu Yan, PICC’s president, said, ‘It is an agreement between two giants and it will boost the development of the Chinese telecommunications industry and lead to further innovation.’

But will it happen? Will the home-grown TD-SCDMA become the 3G standard for China, and hopefully other countries, in the future. Some of the comments made were not overly encouraging.

Sandy Shen, a Gartner analyst based in Shanghai, said, ‘TD-SCDMA is the last straw for Datang Group, otherwise it is over. It is an uncertain risk for strategic investors as it will probably take a long time for them to get returns.’

For reasons which are probably concerned with letting the home technology have first bite at the market China has not released the timetable for issuing licenses and Sandy Shen said it will also take one or two years for a new 3G network to make a profit.

A good bet is that this standard will be announced officially around April next year. This, in truth, will not be in time for the 2008 Olympics. Yes, it will be available in certain cities by that time. Yes, there will be handsets that can deal with it. But a full-blown coverage of the Olympics with access China-wide now looks totally improbable.
Source: China.org.cn

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