GIGA background study: mobile broadband in China

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Transcript of GIGA background study: mobile broadband in China

  • 1. for GIGA Technology Program Mikael Leinonen, Finpro Hong Kong Wireless Broadband in China November 30, 2005

2. Table of Content

  • Introduction
  • Market overview
    • Business volume
    • Network Operators
  • Services
    • VAS Figures
    • SMS & MMS
    • Ring Back Tones
    • M-Commerce
    • Games
    • Other services
    • Biggest Service Providers
    • Revenue sharing model
  • Currently used Broadband technologies
    • 2.5G
    • EDGE
    • Wireless Local Loop
    • SCDMA
    • The Cuntong Project
    • WLAN
  • 3G
    • General
    • Lisence issue
    • TD-SCDMA
    • 3G testing
    • HSDPA
  • Other future technologies
    • Wimax
    • WRAN
    • DVB-H
    • Beyond 3G, 4G
  • Policy making and public sectors role
    • CATR
    • Standard Association
    • CJK Standards meeting
  • Public R&D programs
    • General
    • NFS
    • 863
    • FuTURE
    • Notable research institutes
  • Private sector R&D activities
    • General
    • Network equipment manufacturers
    • Handset manufacturers
  • Foreseeable radical changes
  • Finnish Companies possibilities in China

3. 1. Introduction 4.

  • This report has been written for the GIGA program of Tekes, focusing on converging networks. The report provides information on the China wireless broadband markets.
  • This report discusses the following issues
    • Overview of the China wireless broadband market
    • Competitive environment
    • Technology adoption and outlook
    • Available services
    • Governments role in the development of the wireless broadband
    • Public & PrivateR&D activities for wireless broadband technologies
    • Opportunities for Finnish companies

1. Introduction 5. China in a Nutshell 1. Introduction Source:www.china.org.cn , CIA world factbook9,600 000 km (Finland 338,000 km) Land Area urban population: 41.8%; rural population: 58.2%. Metropolitan Population $5,600 (2004 est.) GDP per capita Shanghai Largest City 1.3 billion (Finland 5.3 million) Population China National Statistics 2004 6. 2. Market Overview 2.1 Business Volume 2.2 Network operators 7. General market information

  • Telecom revenue reached USD 63 bln in 2004
  • Mobile communications revenue:
    • USD 27 bln
    • 13.2% increase from 2003
    • ~43% of total telecom revenue
  • Number of mobile phone users was340 million by the End of 2004
  • ~25.9% user penetration by the end of 2004
  • Mobile penetration is estimated to double itself by 2010

2. Market Overview 2.1 General market information 8. Market share: fixed vs. mobile

  • Number of mobile phone users surpassed the number of fixed line users at June 2004
  • Pure mobile operator China Mobile is the biggest in market share by revenue and subscribers
  • Two fixed line operators Telecom and Netcom are now achieving more market share with quasi mobile PHS service

2. Market Overview 2.1 General market information 9. Number of mobile users per technology Mobile Users (Millions) per Operator & Technology 4Q/2004 2. Market Overview 2.1 General market information 10. Mobile subscribers Source: Ministry of Information Industry 2. Market Overview 2.1 General market information 11. Geographically diversified penetration

  • Penetration rate only ~25.9% (2004)
  • Mobile phone density differs a lot in different areas. Wealthy East-coast is leading in subscriber numbers

Comparison of new mobile subscribers in East-, Central- and Western China; 1/H 2003, 1/H 2004 and 1/H 2005 (Y-axis: subscribers 10.000 ).2. Market Overview 2.1 General market information 12. New mobile users are mainly post paid customers

  • In 2004 ~90% of the new mobile phone users were prepaid customers
  • This has caused the decrease in operators ARPU

Comparison of Fixed Line and Mobile communication ARPU in 2003-2005 (Monthly ARPU, RMB)[ 1 CNY = 0.123793 USD (11/05) ] 2. Market Overview 2.1 General market information 13. Mobile Operators 2. Market Overview 2.1 General market informationNo mobile operating license! PHS in huge growth Total (including Fixed line): RMB 64.9 billion (US$ 7.8 billion) PHS: 20.08 mln PHS (LittleSmart) since 1997 China Netcom (No mobile license, but operates PHS) No mobile operating license! PHS in huge growth Total (including Fixed line): RMB 161.2 billion(US$ 19.4 billion)PHS: 39.12 mln PHS (LittleSmart) since 1997 China Telecom (No mobile license, but operates PHS) GSM-CDMA dual mode service since 2H/2004 RMB 79.33 billion (US$ 9.6 billion) GSM 88.76 mln CDMA 30.47 mln GSM since 1994, cdmaOne since 2002, CDMA2000 1X since late 2003 China Unicom Planning to launch EDGE in 2H/2005 RMB 192.4 billion(US$ 23,244 billion) GSM: 223.78 mln GSM since 1995, GPRS since 2002 ChinaMobile Note Operating revenue 2004 Users Network Operator 14. Mobile data revenues, 1Q 05 vs. 2Q 05 China Mobile and China Unicom 2005 1/Q 2005 2/Q Yearly change (%) Source: Informa, Mobile Media Analyst, Oct 05 2. Market Overview 2.1 General market information79.03 85.48 14 116.67 15 120.33 China Unicom 101.2 110.52 21.4 515 18 416.67 China Mobile Data ARPU Data revenue/ month Data Share of Revenue (%) Data revenue/ month ($ milj.) Data Share of Revenue (%) Data revenue/ month ($ milj.) 15. Handset market

  • 2004: 73 million handsets sold
  • 2005 (E): 88 million handsets sold (by CCID)
  • Over 1000 handset models in market
  • Nokia, Motorola, Samsung and Bird are leading the market
  • Domestic manufactures have less than 45% of the total market

2. Market Overview 2.1 General market information 16. China Mobile CM has the right to use a total of 34 MHz of spectrum, for transmission and reception, respectively, in the 900 MHz frequency band and the 1800 MHz frequency band in Mainland China.Source: China Mobile 2. Market Overview 2.2 Network Operators Subscriber Base ( in thousands23,070 22,220 850 Cumulative net additions3,581 3,476 105 Net additions227,362 166,625 60,737 Subscriber numberTotal subscriberPrepaid subscriberContract subscriber As of 31 July, 2005 17. China Mobile insight: July 04 March 05 Source: China Mobile 2. Market Overview 2.2 Network Operators 85,621 88,127 90,771 Number of Employees 86.0% 83.6% 84.2% Network Utilisation Rate 226 million 244 million 254 million Network Capacity (Users) 40.0 billion 62.8 billion 59.1 billion * Short Message Services Usage Volume (Messages) 147.09 million 156.83 million 174.00 million Number of Users of Mobile Data Services 0.037 $ 0.035 $ 0.035 $ * Average Revenue per Minute (USD) 297 313 318 * Average Usage per User per Month (MOU) (Minutes/User/Month) 170.37 billion 188.27 billion 196.48 billion * Total Usage (Minutes) 11.14 $ 11.27 $ 11.02 $ * Average Revenue per User per Month (ARPU)(USD/User/Month) 8.91 million 9.91 million 9.58 million * Net increase in subscribers 194.38 million 204.29 million 213.87 million Number of Subscribers As at30 September 2004/ For the period from 1 July 2004 to 30 September 2004 As at31 December 2004/ For the period from 1 October 2004 to 31 December 2004 As at31 March 2005/For the period from 1 January 2005 to 31 March 2005 18. China Unicom

  • The only operator in China to run two different networks of GSM and CDMA
  • Testing on CDMA EV-DO & CDMA EV-DV as 3G
  • (Tianjin and Shanghai has built EV-DO trail network)
  • Speculation that China Unicom can be split up two
  • Uni-Info, branded WAP portal.
  • Established UNISK Information Technology (together with SK Telecom) to engage in wireless value added service business
  • Uni-Java (developed with Qualcomm) and Brew are two application platforms for China Unicom

2. Market Overview 2.2 Network Operators 19. China Unicom: strategies

  • Boosted CDMA users thru calling discount, handset subsidy & prepaid service.
  • It CDMA targets more to Hi- & Mid-End users &