China: Telecommunications Market
Overview
China’s six telecom carriers invested some USD31.5 billion in telecom infrastructure in 2007. As a result of this investment, Chinese telecom carriers added 101 million additional new subscribers (15.2 fixed line users and 86 mobile phone users) to bring the total number of telephone users in China to 914 million. China’s fixed line telephone penetration rate reached 28.3% and mobile communications penetration rate reached 39.9%. China also experienced tremendous growth in the number of Internet users. According to China’s Ministry of Information Industry (MII), China is now home to 210 million Internet users, including 163 million broadband users.
MII estimates that Chinese telecom carriers will invest USD27 billion in 2008 to attract 62 million fixed line telephone subscribers and mobile phone users. MII also expects the number of telephone users in China to reach 976 million, the fixed line penetration rate to reach 29%, and mobile communications to reach 46.4% by the end of 2008.
It is believed that the Chinese government will restructure the telecom industry in 2008, and the issuance of 3G licenses will not take place until the industry reorganization is completed.
Opportunities
Mobile communications remains the most profitable sector in China’s telecommunications service industry. In order to offer new services, China’s two mobile operators will continue to expand their mobile networks and coverage in 2008. Base stations, switches, and network optimization solutions will be needed for this expansion.
IP and broadband are the top priorities for China’s fixed line telecom operators. China Telecom, China Netcom, and China TieTong will increase their investment in IP and broadband infrastructure in 2008. Intelligent optical networks, multi-service platforms, and fiber to the home (FTTH) will be built to meet the growing demand for broadband services. As China’s broadband market grows, China will need additional wire line Internet access products such as ADSL, LAN and Ethernet. Wi-Fi and WiMax for wireless Internet access will also be required.
Value-added Services, After 20 years of breakneck grow, the growth rate of new users begins to slow down. In order to generate additional revenue and remain competitivene, they are now focusing on developing new services, especially value-added services. Operators are also open to partnerships with other service or solution providers.
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