Tuesday, November 28, 2006

China Telecom Industry in 2006

Copyed from CTTL.cn

 As time goes by unnoticeably, the year 2006 is already at the end. For the Chinese telecommunication industry, 2006 is a year permeated with achievements. In 2006, the Chinese telecommunication industry entered the new era of telecommunication. Why do we say that? In 2006, every Chinese telecommunication enterprise rogressed nicely in their strategic transition, which marked the division between traditional telecommunication and new telecommunication. New telecommunication covers more areas, has longer industrial chains, and operates quite differently. With the increase in industry value, changes in the market, pularization of mobile telecommunication, promotion of the "rural project", and a deeper understanding the consumers have regarding telecommunication, the two main themes of telecommunication in 2006 are harmonious development and reform. Overall, 2006 is a year when Chinese telecommunication industry experienced fast growth.

  Enhancemen to fover all strength

  Compared with the tame Western telecommunication industry, the Chinese telecommunication industry maintained its high growth rate, mainly benefiting from the rapid growth of the national economy, the implementation of the strategy to use information to bring about industrialization, as well as a series of stable and practical developmental policies published by the telecommunication industry. Also, the various operators, besides going forward with their internal reform, the changing of their operating model, and the improvement of their service quality, have also increased the effort in market expansion, developing of the market potential, and the innovating of the operation model, which has increased the market demand.

  The new eststatistics of the Ministry of Information Industry shows that in the first three quarters of this year Chinese telecommunication industry has continued to develop at a rapid rate. From January to September, the total national communication turnover was 1, 113.11 billion Yuan, an increase of 25.1% compared with the same period last year. Of the total turnover, 1,058.92 billion Yuan came from telecommunication operations, an increase of 25.5%. The national communication income was 527.85 billion Yuan, an increase of 11.7% compared to the same period last year. Of the total revenue, 479.93 billion Yuan came from telecommunication operations, an increase of 11.3%. The rate of increase in communication operation turnover is rough 2.2 times that of the communication operation income. In a year when the global telecommunication industry experienced lackluster growth, the Chinese telecommunication industry continues to increase stably, which shows the vitality of the industry as well as the positive effect the governmental policies are having.

  In the last decade or so, the number of Chinese telephone users has ncreased in a "rolling snowball" fashion. Even though in recent years the rate of increase in operation income has slowed down, the number of users, and in particular the number of mobile users, has continued to grow at a rapid rate. From January to September of this year, 18.861 million more new fixed elephone users were added around the country, making the total 369.306 million. The number of urban telephone users increased by 13.594 million for a total of 253.346 million users; the number of rural telephone users ncreased by 5.267 million for a total of 115.96 million users. The number of wireless users in the city increased by 8.034 million for total of 93.334 million users, accounting for 25.3% of fixed telephone users. The number of national mobile telephone users increased by 49.748 million for a total of 443.154 million. The number of mobile group data users increased by 46.402 million for a total of 117.207 million. The ratio of mobile group data users among all mobile telephone users increased from the 18.0% measured during the end of last year to 26.4%. The increase in the number of telephone users in China has built solid foundations for sustainable growth in the telecommunication industry; it will further increase the social telecommunication consumption and help enhance the overall competitiveness of the Chinese telecommunication industry.

  Harmonious development in the market

  From January to September of this year, the total investment made in fixed assets for national communication industry was 144.31 billion Yuan, an increase of 17.7% compared to the same period last year; of the total investment, 142.48 billion Yuan were made on fixed asset for the telecommunication industry, an increase of 17.7% compared with the same period last year; 1.83 billion Yuan were invested in fixed postal assets, an increase of 21.5% compared with the same period last year. Many factors affected the changes in investment made in fixed assets for the national communication industry, which includes the adjustment made by enterprise in regard to their investment structure and investment direction. The increase in communication investment has helped the building of networks and the development of operations. Currently, with the operation income experiencing a slower rate of growth, an increase in investment made by telecommunication enterprise is merely a part of the market economy logic; it is a normal structural adjustment, and it demonstrates the practicality and reasonableness in corporate operation and investment.
  Form Jannary to September, the Chinese mobile telecommunication income rose by 18.3% compared to same period last year, accounting for 47.1% of total communication incomes and further propelled the growth of telecommunication operation incomes. Data shows that the communication income rose by 22.2% compared with the same period last year, which is roughly twice as much as the rate of increase for major communication incomes. The ratio of fixed local telephone income and long distance telephone income in the total operation income decreased by 2.49% and 1.06% respectively compared with the same period in 2005, while the ratio of mobile telecommunication income and data communication income rose by 2.89% and 0.71% comparatively. In the mobile telecommunication field, the mobile data services developed quickly and its income accounts for 21.0% of the total mobile telecommunication income. The usage rate of fixed local telephones decreased by 2.9% compared with the same period last year, while mobile local telephone usage increased by 33.6% comparatively, further replacing fixed local services. Among fixed local telephone usages, the ratio of wireless telephone usage in the city rose from 24.9% last year to 25.7%, while the rate of increase fall from 25.3% last year to 0.2%, which shows its role in propelling the usage of fixed local telephones is decreasing. From the statistics, the change in the competitive structure and the improvement of operation organization has allowed the users to freely choose services and operators, and that has allowed for better satisfaction of the users' telecommunication demand and has promoted for more effective competition; this shows that the Chinese telecommunication market is becoming more civilized, which will allow the Chinese telecommunication market to become more harmonious.

  Froms mall growth to quantum leap

  The rapid growth of the Chinese telecommunication industry did not come from "luck"; it is achieved from the blood, toil and sweat, one step at a time. In the very beginning, the Chinese telecommunication industry lacked capital, technology, and management experiences, but the policies and state plans helped the telecommunication industry in getting the necessary fund as well as obtained the needed room for growth. In 2005, the Chinese telecommunication industry, under the guidance of the state policy, has achieved the metamorphosis of going from small growth to quantum leap.

  Currently,Chinesepublicfixed telecommunication network and the public mobile telecommunication network have both become the biggest in the world, and they have maintained their rapid rate of growth. At the same time, Chinese telecommunication enterprise have progressed greatly in their effort to enter the world market, they can be seen everywhere around the world. Local equipment manufacturers such as Huawei and ZTE, after 10 years effort of internationalization, where they started in the surrounding market, moved to the developing countries, and are now permeating into developed countries, are now making more frequent appearances on the "short list" of global telecommunication giants. Furthermore, Chinese operators such as China Mobile are actively looking for opportunities to implement the "going out" strategy and become a player in the world stage. Many Chinese telecommunication enterprise are or are about to become "renowned world telecommunication enterprises".

  China is displayingstrong potential in regard to future profit in telecommunication, development of future customers, future telecommunication investment, growth of the telecommunication market, development prospect of 4G, and overall investment environment, and it will sure propel the Chinese telecommunication industry into a quantum leap. 8

Wednesday, November 08, 2006

China Standard: should we support you?

11/8/2006, There are more and more Chinese technology standards becoming focus of our everyday chatting. From Chinese 3G standard TD-SCDMA to Chinese WiFi standard WAPI, From Chinese standard WiMAX McWill to Chinese IPTV standard AVS,each one brandished its Chinese flag to blandish Chinese goverment, Chinese media. Should we support all of them just because they are Chinese standard?

About one week ago, WiMAX forum chairman Ronald Resnick said in a summit in Beijing that China should be equel to each standard, only in this way Chinese products, Chinese standard can merge in to the world. Mr. Chairman is worrying about WiMAX will be replaced by Chinese McWill, but what he said is not only one-side opinion.

To have standard, to reap benefits, everyone knows the marketing rule. But this benefits should belong to all the people, all the cooperations, not only some standard publishing organizations.

Chinese have responsibilities to support Chinese standard, only when the standard will bring benefits to all Chinese, only when this standard can really become an international standard. Otherwise, standard can just be a new trade blockade.

Monday, November 06, 2006

Broadband service billing: based on traffic or time

11/6/2006, there is a long time dispute in China about the billing method on broadband service. Should it be based on how long you use it or should it be based on how much traffic you uesd? Recently, this dispute leads to a serious online brawl. The fuse of it is Nanjing telecom, China Telecom's branch in Nanjing city, suddenly announced that they would adopt traffic billing method on their broadband service instead of old time billing method.
Nanjing telecom stated that there was a big difference between different kind of broadband users. Averge monthly traffic is 8Gb, but some user can use upto 2600Gb per month mainly due to abuse of P2P software like BT. Nanjing Telecom considers such abuse of BT leads to unbalance of network resources, and it is unfair to those customers who don't use BT.
Sounds reasonable, right? But this annoucement reaps severe online remonstration. People threaten that they will change to other service provider who don't use traffic billing. People reprobate that this is a new monopoly policy. People rebuke Nanjing Telecom does not consider consumer benefits. Those who advocate the new policy often get flaks from raged customers.
Today, Nanjing Telecom told local media that their new billing policy has been temperately stopped, and no further information when they will resume this policy. Is this the victory of those critics? Mr. Xiang,ligang, Editor in Chief of a local communication magazine wrote in his blog:"This is a PR failure of China Telecom.". Xiang thought China Telecom should do more PR work before they launched this policy.
Nanjing Telecom doesn't think they are the first around the country to launch this policy. Some other cities in Jiangsu province also have this policy before them. Anyway, what we can find now is their reason to launch this new billing method doesn't disappear, they still fact hugh network resources unbalance. The traffic is increasing, but the revenue isn't. What is waiting them ahead is another suitable time to launch this billing method.
Maybe there is a good news for Nanjing Telecom, Chinese goverment is working on crumbling down those websites who provide piratic films downloading. If this work works, the pressure on China Telecom will be less.