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?