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China telecom restructuring questions

Posted by: Dexter Roberts on June 3, 2008

For a long time, Beijing has been not so much trying to clip China Mobile’s wings as introduce real competition and help the other telecom players become also viable including in the mobile and value-added services areas (the final effect, of course, is the same—new competition for China Mobile). With China Unicom distracted by having to maintain two competing mobile systems (GSM and CDMA) and China Telecom struggling with falling fixed line subscribers, China Mobile has easily dominated the fast-growing and lucrative telecom—largely mobile—market in China.

Now with the latest restructuring, including the awarding of a mobile license to China Telecom and the merger of Unicom and China Netcom (China Mobile gets a small fixed line company China Tietong Telecom too), the first signs of real competition are emerging. That’s not to say there aren’t lots of unanswered questions however—and ones that will influence the competitiveness of the whole sector. Those include:

How big a blow competitively is the restructuring for China Mobile which has long dominated the lucrative mobile business?

Can the newly merged Unicom-Netcom make a go for it and really compete with China Mobile in GSM and later in 3G?

Can China Telecom move quickly to 3G now that it has a mobile license (struggling CDMA is hardly what China Telecom really wants)?

Can 3G buck the odds of late and start to take off in China?

And probably most importantly—who gets saddled with the indigenous 3G standard TD-SCDMA?

Do all three major players (all of which will get 3G licenses) have to do the Chinese standard? Or does just one or two have to do the hard work of trying to develop a user base in an untried new mobile standard?

Reader Comments


June 4, 2008 8:58 AM

Having subscribed China Mobile Pakistan first international entry outside China. 3G TD-SCDMA but still using poor GPRS which hardly crawls. When are you launching your EDGE or TD-SCDMA in Pakistan markets before the Olympic starts. eMail:


June 4, 2008 9:06 AM

Real competition wonn't come true in recent years.Why? Because of so-called chinese charateristic culture.When two company merged,Who is leader is the most concerned than anything ,such as how to develop or how to solve questions.So chinamobile will dominate the mobile market at least 5 years and not worry about other competior ,China Telecom and Unicom. You can wait to see the story , it will kidding you .


June 4, 2008 1:24 PM

Let's put this way, amongst these new/old big players, every GSM operator would get the UMTS 3G (W-CDMA) licence, every CDMA operator would get the CDMA2000 3G licence, and it may not be the case that every operator wants to play TD-SCDMA, therefore not every operator would get the TD-SCDMA licence. It's just as simple as that. Why ? We don't expect Chinese government comes up such a significant restructuring of the industry but intends to kill some newly emerged players by not issuing them a 3G licence (UMTS, CDMA2000 or TD-SCDMA). 3G is the immediate future of the mobile wireless networks for the time being, and a bridge to 3GB or 4G such as LTE.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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