Executive Summary

Telecoms market of China is full of opportunities and challenges in 2010. After 3G licenses are issued, where are three big telecom providers going? All kinds of small amounts of electricity and comprehensive popularization of 3G cards will agitate the spark of splendid market in China. This article will discuss the development especially three main carriers first. And then review the developing process of China inclining to technological development and marketing development. After that there will be a forecast for Chinese telecoms industry.

Executive Summary 1
Introduction 1
China telecoms industry development and three main carriers 2
Market and Technological Growth 4
China telecoms industry and Market Performance forecast 5
References 6

Introduction

“According to IDC's statistics, the shipments of mobile phone manufacturers is 317.5 million in the second quarter, with a growth of 14.5% comparing with the second quarter of 2009's 277.2 million units”(Boyce 2010). This represents the second consecutive quarter of digit growth for mobile phone devices, which represents continued rapid growth in the global market for mobile phone. In recent years China has actively communications of infrastructure plan in 2010. According to the fourth season investigation, China has replaced the United States as a most populous country of the world broadband subscribers. The number achieves 83 million households compared with 80 million subscribers in the third season of 2008 grown 3%. The number of DSL users achieves 64 million accounting for 77% of the broadband market. According to survey of the end of 2008 released by Council FTTH, in fiber networking part China immediately boards global the third biggest FTTH FTTB + LAN market with 596 million fiber networking users just following Japan.

China telecoms industry development and three main carriers

As the following is the telecoms industry development of China briefly. Although China does not have a long history of telecoms industry development, it can be cut into three steps clearly. From 1980 to 1993 is deregulation period. In 1980, China telecom infrastructure and telecom service are in shortages, and the national PSTN capacity has only 435 million. To solve the problems, the government began to relax price oversight and implement telecommunications reform the management system. “The government approved post and telecommunications departments collecting the first install fee in June 1979”(T. Parks, C. Yuanzhe 2003). And then adopted some another actions such as financial support, derating tariff and accelerated depreciation policy etc. From 1993 to 1998 is the price supervision period. In 1993, in order to break the telecom market exclusivity China introduced the second telecom carrier China Unicom produced by electronic ministry, electrical units, etc. “In 1994, the birth of China Unicom creates the history of Chinese telecommunications industry, which represents an important milestone of breaking Chinese telecom market exclusivity”(Becky P. Y. Loo 2004). And the government officially starts to regulate. Though ostensibly really breaks the market exclusivity, in the system of not separating government functions from enterprise management it is hard to produce real fair competition. From 1998 to 2008 is the reform supervision institution and industrial recombination period. “In 1998 the Chinese government established Ministry of Information Industry (MII) which regulates telecommunications and related departments”(Ding Lu, Chee & Kong Wong 2003). MII becomes the new government regulator assisting the government implement management and no longer directly engaged in the telecom business. The partition of post and telecommunication determines that China telecom comes into an independent business telecom operator. There are three main telecoms carriers in China. China mobile has a number of mobile phone users based on which constructs TD-SCDMA 3G base stations. In early 2009 China mobile put forwards G3 advertising to lead 3G life. Emphasizing on integration platform of the network for existing 2G users, they need not change card not change number even not registered cases. And they can just simply easily be upgraded to dual-mode 3G mobile phone. “Revenue for the 12 months ended Dec. 31, 2010, rose 7.3 percent to 485.2 billion Yuan.” (Owen Fletcher, Joanne Chiu & Dow Jones Newswires 2011). “China Mobile said in its annual results that the group's total customer base reached 584 million by the end of 2010. The number of 3G customers reached 20.7 million by the end of 2010, securing the group a leading position in the 3G market” (Xinhua, 2011). China Unicom has the most mature 3G technology - WCDMA which will become the next phase of development foundation. In late April China Unicom advances the new 3G business brand called “WO” and plans to invest 13.9 billion dollars in offering 3G services 284 cities all over the China in late 2009. China Unicom will do their best to enlarge China's 3G market by diversified support device with a wide range of signal covers. In cable broadband part, China Unicom will be in accordance with the "content, application, access and service" marketing mode, which will help to stabilize ARPU (Average Revenue per User). “Telecommunications service revenues were RMB149.59 billion. Profit or net income for the year amounted to RMB9.56 billion” (Blaze Fabry 2010). “In 2010, China Unicom revenue 171.3 billion Yuan, of which 162 billion Yuan communications services revenue, excluding upfront connection fees, deferred revenue, operating income and communications services revenue growth of 11.5% over the previous year”(Yang Yang 2011). After reconstruction of China telecom, China telecom put forwards “my E-home”, “surfing” and “Biz Navigator” as the main development direction in 2009. Especially based on “my E-home” China telecom plans to develop fixed-line business. In the aspect of 3G mobile phone promotion, China telecom advances set meal of surfing wireless to meet the need of users who enjoy CDMA 2000 and Wi-Fi wireless Internet service. According to China telecom 2008 annual, future China telecom will take “in high-end cuts and differential operation, there are benefits scale development” to implement action and broadband Internet integration strategy in the future. “Revenues reached RMB 209,370 million while net profits were RMB 13,271 million. The company had the following number of user accounts at the end of 2009: Fixed line subscribers: 189 million, Mobile subscribers: 56 million, Broadband subscribers: 53.5 million”(Blaze Fabry 2010).

Market and Technological Growth

The developing process of Chinese telecoms should be cut into three steps. In deferent steps Chinese telecoms have received different development. In the era of 2G, Chinese telecoms have no chance. In this step, there are two big criteria in Cellular mobile telecommunication field, one is GSM standard setting by the European telecommunications giants, another is CDMA standards from the main U.S. However Chinese telecoms is just in the starting stage of development of machine-making. The Chinese telecommunication enterprises have been in a passive state. In the era of 3G, Chinese telecoms will do their best to achieve progress. Comparing with the era of 2G, Chinese telecoms has got a great progress. “In the aspect of technology, Chinese telecoms participated in making CDMA2000 and WCDMA criteria leading by companies from U.S. and Europe. The Chinese telecommunication enterprises begin to take some patent into CDMA2000 and WCDMA standard”(J. Henry & T. Phan 2003). In the era of 4G, Chinese telecoms will play a very crucial role in the development of global telecoms. In recent years, Chinese telecoms enterprises and research institutions more and more concentrate on significance and importance of strategic communication standard. The domestic communication enterprises and research institutes actively participate in3GPP, 3GPP2, ITU, ETSI standards making and strive to related technologies into the future estimates standard. In 4G standards, the Chinese telecoms’ patent will be remarkably enhanced especially such as HUAWEI, ZTE. Since 1980 Chinese telecoms have got a great achievement in market growth. In the aspect of telecommunication, the mumber of fixed telephone subscribers of China has increasingly slown down nearly seven years and even started erosion from the 2007. the number has declined from 37 million to 34 million by the end of 2008. The number of mobile phone users has increased from 26 million to 64 million by the end of 2008. In the aspect of broadband, several cities of China are inclining to construct broadband. Wireless cities are covered with broadband wireless networks. In the city broadband will provide the signal coverage area diversification of each user information communication application services. Chinese wireless cities mainly adopt fixed 802.16 Wi-MAX, Wi-Fi two technologies. As long as users start the device of Wi-Fi card, they will connect to Wi-Fi wireless AP base stations, and after input account information they can use broadband wireless networks.

China telecoms industry and Market Performance forecast

According to the 2010-2013 report given by MII research institution, we can find that China telecom industry will input more than several billion dollars to construct the infrastructure for countryside. Especially the government will go on investing the telecom industry. In the aspect of technology, obviously 3G is a main trend, and this technology will be more mutual than before. In the aspect of telecom market, the formal business will continue going down, but the 3G market will be enhanced most. Subscribers in mobile, Internet and broadband sector are forecasted to grow at CAGR of more than 8%, around 17% and 26% respectively during 2009-2012.

Conclusion

In China, the developing process of telecoms has experienced three stages: deregulation period (from 1980 to 1993), price supervision period (from 1993 to 1998) and reform supervision institution and industrial recombination period (from 1980 to 1993). With China economy developing, the telecoms technology and market is non-stoped advancing. Nowadays China has been a crucial power to research new technology. Under the three main operators’ research, 3G is becoming more and more mature even stand in the most advanced standard. In the future, we should believe China will have a better performance in the era of 4G.

Reference
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T. Parks, C. Yuanzhe. (2003). The next Stage of the Chinese Telecom Market. Parks Associates. 15(9), 105.
Becky P. Y. Loo. (2004). Telecommunications reforms in China: towards an analytical framework. Telecommunications Policy. 28(9), 701.
Ding Lu,Chee & Kong Wong. (2003). China's telecommunications market: entering a new competitive age. UK: Edward Elgar Publishing Limited.
Owen Fletcher, Joanne Chiu & Dow Jones Newswires. (2011). China Mobile 2010 net profit rises 3.9% but competition weighs. Retrieved March 16, 2011, from http://www.totaltele.com/view.aspx?C=0&ID=463301.
Xinhua. (2011). Retrieved March 21, 2011, from http://times. busytrade. com /12641/5/China_Mobile_2010.
Blaze Fabry. (2010). China Unicom 2009 financials disappoint. Industry Watch. 8(5), 2-3.
Yang Yang. (2011). wholesale China Unicom, 11.5% revenue growth in 2010. Retrieved April 14, 2011, from http://louboutinblack.info/?p=198.
Vivian, Wai-yin & Kwok. (2009). China Telecom Goes Downmarket, Market Scan. 13(7), 14.
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J. Henry & T. Phan. (2003). Telecommunications and Information Technology in China. Export America. 6(28), 227.
Bo Li. (2005). Recent advances on TD-SCDMA in China. Communications Magazine, 1(43), 36.