China Continues to Evolve as a World Leader in the Digital Media SectorThe 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.
China’s 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. China’s 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. 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.
China’s 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.
The number of mobile subscribers passed the 1.3 billion subscriber mark, with penetration surpassing 100%.
China Mobile continues to dominate the mobile industry with 63% market share. 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 China’s 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. 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 country’s rapidly expanding fixed broadband market. In mid 2016 the Chinese government unveiled plans to invest additional funds in developing broadband networks.
The move will be boost growth of China’s e-commerce giants such as Alibaba, Suning and JD, as these providers shift their focus their strategy to more rural areas.
The governments Broadband China Plan. With the world’s largest online population, China’s digital economy has grown rapidly to cater to the needs of the online masses.
Much of the initial growth in China’s digital economy was underpinned by the online demand for information, media and commerce, giving rise to China’s 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 China’s telcos missed the opportunity to develop into digital giants as they focus on deploying fixed and mobile broadband networks. Also evolving within China’s digital economy to meet the needs of China’s online audience are the banking and financial services industry, public administration services, health services and education services. China’s digital economy will continue to grow as only half of China’s 1.4 billion people are online.
This online audience is growing wealthier due to China’s consistent macroeconomic growth and demographic trends such as ongoing urbanisation.
As a consequence China’s 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 China’s traditional media players is largely secure given that they are government owned and hence seen as an integral part of the government’s desire to control the media.
The competition for audience share and hence revenue between privately and state-owned operators reflects the same competitive challenges faced by state-owned operators in other industries in China’s evolving economy.
Table of Contents
1. Key statistics
2. Telecommunications market
2.1 Historical overview
2.1.1 Background of China’s telecom market – 1980s and 1990s
2.1.2 Background of China’s telecom market – 2000-2007
2.1.3 China’s telecom market restructure in 2008
2.1.4 Overview of China’s telecom market – 2008-2012
2.1.5 Trade dispute – 2013/2014
3. Regulatory environment
3.1 Historic overview
3.2 Regulatory authority
3.2.1 Ministry of Industry and Information Technology (MIIT)
3.2.2 China Internet Network Information Centre
3.3 Government policies
3.3.1 Private investment in state-controlled industries
3.3.2 Broadband China
3.3.3 Three-network Convergence Policy
3.3.4 Internet Plus
3.3.5 IOT / M2M
3.4 Telecommunications Regulations
3.6.1 Local calls and domestic long distance calls
3.6.2 International long distance calls
3.6.3 Internet backbone networks
3.7 Tariff Setting
3.8 Universal Service Obligation
4. Competition issues
4.1 New Telecommunications Licenses
5. Fixed network market
5.2 China Telecom
5.2.1 Company overview
5.2.2 China Telecom: Financial statistics
5.2.3 China Telecom: Operations statistics
5.3 China Unicom
5.3.1 Company overview
5.3.2 China Unicom: Financial statistics
5.3.3 China Unicom: Operations statistics
5.4 China Tower
5.5 CITIC Networks
6. Telecommunications infrastructure
6.1 Overview of the national telecom network
6.2 New developments
6.3 International infrastructure (satellite, submarine)
6.3.1 Terrestrial and submarine cable infrastructure
6.3.2 Satellite infrastructure
6.3.3 International Internet bandwidth
6.4 Specific IT developments (data centres, cloud computing)
6.4.1 Cloud Computing
6.5 Smart infrastructure
6.5.1 Smart grids
6.5.2 Smart cities
6.5.3 Connected homes
6.5.4 Connected car
7. Broadband market
7.1 Introduction and statistical overview
7.1.1 Market analysis
7.1.2 Broadband statistics
7.1.3 Forecast broadband subscribers – 2016 - 2021
7.2 Regional Broadband Network Plans
7.3 Fibre-to-the-Premises (FttP) and Fibre-To-The-Home (FttH)
7.3.2 Recent Developments
7.3.3 China Telecom
7.3.4 China Unicom
7.4 Hybrid Fibre Coax (HFC) networks
7.5 Digital Subscriber Line (DSL) networks
7.5.1 Fixed wireless
8. Digital media
8.3 Key digital media players
8.5 Television broadcasting
8.6 Internet Protocol TV (IPTV)
8.6.5 China Telecom
8.6.6 China Unicom
8.7 Hybrid fibre coax cable (HFC)
8.7.3 CATV market regulations
8.7.4 Major operators
8.7.6 Digital Cable TV
8.7.7 Next Generation Broadcasting network
8.8 Satellite TV
8.9 Video streaming
8.9.1 Major players
8.10 Social media
8.12 On line gaming and gambling
8.12.1 Major players
9. Digital economy
9.2 IoT / Smart Cities
9.2.1 China Unicom
9.3 Online activities
10. Mobile communications
10.1 Market analysis
10.2 Mobile statistics
10.2.1 General statistics
10.2.2 Mobile broadband statistics
10.3 Regulatory issues
10.3.2 Mobile Number Portability (MNP)
10.3.3 VAT Introduction
10.4 Mobile infrastructure
10.4.1 Digital networks
10.4.2 Other infrastructure developments
10.4.3 IoT and M2M networks
10.5 Major mobile operators
10.5.2 China Mobile Ltd (CML)
10.5.3 China Telecom
10.5.4 China Unicom
10.6 Mobile content and applications
10.6.1 Mobile internet
10.6.2 Rich Communication Services (RCS)
10.6.3 Mobile gaming
10.6.5 m-banking (payments/loans)
10.6.6 Mobile Advertising
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