[photopress:It_phone_user.jpg,full,alignright]The long awaited restructuring of China’s telecom market is happening.
What is surprising — at least it came as a surprise to all commentators and apparently all the major players — was inter-network mandated roaming with a price set by the regulator.
Suffering from this plan is China Mobile which currently earns roughly 70% of the industries’ (fixed and mobile) profits.
[photopress:It_phone_user_2.jpg,full,alignleft]The new blueprint is meant to level the playing field, advance China’s homegrown technology standards and intellectual property and cut down on the need to overbuild base stations.
The government appears to be under the impression that it can tell China’s 580 million mobile users what handset or network to spend their money on. As it stands for 80% of new subscribers, the natural choice is China Mobile, but that’s most likely due to its extensive network coverage and the wide availability of popular 2G GSM handsets.
All of this could perhaps change a bit if TD-SCDMA — which is 3G — was launched and operating licenses issued for it and other 3G technologies.
Analysys International, a Beijing-based tech research firm, estimates China will have 30 million 3G users by 2011. Around 17 million of them will be using TD-SCDMA — small in terms of the country’s mobile market as a whole but significant if the network is running in part on Chinese technology.
[photopress:It_phone_user_3.jpg,full,alignright]TDCMA is being trialed in 10 cities including Beijing and Shanghai. Updates from the trials are a closely guarded secret, but one analyst described TD-SCDMA’s performance as ‘not shining.’ And that seems to be the general impression.
David Wolf, president of media, tech and telecom consultancy Wolf Group Asia came up with a most believable explanation.
He said, ‘TD-SCDMA is a technical achievement that shouldn’t be dismissed out of hand. But from a commercial standpoint, all it represents is that when 4G comes, China has a place at the table that it never would have had without TD-SCDMA. It makes China a player in 4G, but it won’t make it a player in 3G.’
Finally where does this leave iPhone which has not got a deal with China Mobile and a change seems unlikely. But the market wants the iPhone. There is already a very substantial gray market. China Mobile being unable to make a deal will not change that.
Sources: China Economic Review and Market Watch
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