Telecoms, Mobile, Broadband and Digital Media

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Telecoms, Mobile, Broadband and Digital Media
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Summary
This report provides a comprehensive overview of
trends and developments in Chinas
telecommunications market. The report analyses
the Telecoms Infrastructure, mobile, fixed
broadband, Digital Media and Digital Economy
sectors. Subjects include Market and industry
analyses, trends and developments -Facts,
figures and statistics -Industry and regulatory
issues -Infrastructure -Major players,
revenues, subscribers, ARPU
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Executive Summary China Continues to Evolve as a
World Leader in the Digital Media Sector The
Chinese telecom market is the largest in the
world in terms of subscribers and is undergoing
transition. Mobile subscriptions outnumber fixed
voice connections and voice is giving way to data
as the primary revenue generator. Chinas telecom
market is served by three operators China
Telecom, China Unicom and China Mobile. All three
are integrated providers of telecom services
although China Mobile is the largest in the
crucial mobile market. Chinas fixed-line market
is in decline due to voice mobile substitution
although the two main fixed-line operators of
China Telecom and China Unicom have aggressively
deployed and marketed fibre broadband to increase
the value of maintaining a fixed-line.
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In 2016 the Ministry of Industry and Information
Technology (MIIT) issued a fourth basic
telecommunications licence to state-backed China
Broadcasting Network (CBN) enables CBN and its
subsidiary China Cable Television Network to
provide domestic internet data transmission and
telecom infrastructure services. Although China
boasts the largest mobile market in the world,
there is still much room for growth given the
relatively recent focus on large scale LTE
investment. Chinas mobile market is served by
mobile network operators China Telecom, China
Mobile and China Unicom which operate a variety
of technology platforms that reflect the
commercial preferences of operators and the
industry development policies of the
government. Entering 2016 all three mobile
network operators are focused on deploying LTE
networks and monetizing such investments by
enticing end users to upgrade to higher ARPU LTE
products such as mobile broadband.
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Mobile subscriber growth is expected to be very
slow due to a saturated and mature market.
Operators will continue to focus on increasing
ARPU in light of diminishing opportunities to
acquire new subscribers and the need for
operators to maximise monetization of LTE
investments. Operators are also investing in
technologies design to maximise the user
experience such as Rich Communication Service
(RCS), Voice over LTE (VoLTE) and Near Field
Communications (NFC). China possesses the
largest broadband subscriber base in the world,
with the majority of users accessing the Internet
through mobile devices. Catering to this demand
are Chinas three telcos China Telecom, China
Unicom and China Mobile. Broadband makes up the
majority of fixed Internet connections given
dial-up comprises less than 2 of total fixed
Internet connections.
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Despite high broadband penetration China
possesses one of the slowest broadband speeds
globally although this should change following
network architecture improvements such as the
October 2015 completion of a two year project to
increase the number of nationwide Internet
traffic hubs from three to ten. Unlike the US
market, where cable internet access plays a
prominent role in developing the fixed broadband
market, DSL was the initial driving force behind
fixed broadband growth in China, followed later
by EPON fibre and now GPON fibre. HFC makes up a
tiny proportion of total broadband connections as
despite the fact that China also possesses the
largest cable TV subscriber base in the world,
cable TV operators were late in upgrading cable
TV networks with the necessary infrastructure,
missing a significant slice of the countrys
rapidly expanding fixed broadband market.
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In mid 2016 the Chinese government unveiled plans
to invest additional funds in developing
broadband networks. The move will be boost growth
of Chinas e-commerce giants such as Alibaba,
Suning and JD, as these providers shift their
focus their strategy to more rural areas. The
government's Broadband China Plan. With the
worlds largest online population, Chinas
digital economy has grown rapidly to cater to the
needs of the online masses. Much of the initial
growth in Chinas digital economy was underpinned
by the online demand for information, media and
commerce, giving rise to Chinas three domestic
digital economy giants Baidu (search), Alibaba
(e-commerce) and Tencent (social media).
Traditional media players largely struggled to
keep pace with the migration of audiences to
online media, while Chinas telcos missed the
opportunity to develop into digital giants as
they focus on deploying fixed and mobile
broadband networks.
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Also evolving within Chinas digital economy to
meet the needs of Chinas online audience are the
banking and financial services industry, public
administration services, health services and
education services. Chinas digital economy will
continue to grow as only half of Chinas 1.4
billion people are online. This online audience
is growing wealthier due to Chinas consistent
macroeconomic growth and demographic trends such
as ongoing urbanisation. As a consequence Chinas
online audience is increasingly willing to spend
online, a trend encouraged by the government as
it seeks to balance the economy away from an
overreliance on building infrastructure and
exporting goods towards domestic
consumption. The fate of Chinas traditional
media players is largely secure given that they
are government owned and hence seen as an
integral part of the governments desire to
control the media.
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Table of Contents
1. Key statistics 2. Telecommunications market 3.
Regulatory environment 4. Competition issues 5.
Fixed network market 6. Telecommunications
infrastructure 7. Broadband market 8. Digital
media
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