Telecommunications
China and Korea Plan Joint Trans-Pacific Cable
China and South Korea are jointly planning the construction of a submarine fibre-optic cable directly linking Asia's mainland with the Western US. The project, which could cost between $500 million and $1 billion, would help reduce both nations' dependency on cable links routed through Japan. Currently half of trans-Pacific traffic goes through the TPC-5 cable, which is jointly controlled by AT&T and KDD, the Japanese government-controlled telecom company. China Telecom would have a controlling interest in the proposed cable. The new route would offer economic as well as strategic advantages: analysts expect China and South Korea to have a combined annual growth rate of 60% in their telecom industries between now and 2007, compared with a 14% rate for Japan. The new route would mean that Chinese businessmen would no longer be dependent on AT&T or KDD, although AT&T is one of a number of potential foreign partners hoping to be involved in the new deal.
Asian Wall Street Journal (HK), 12/16/96
Telecom Growth Estimates Revised Upwards
Officials of the Ministry of Posts and Telecommunications (MPT) and the Ministry of Electronics Industry (MEI) will revise Ninth Five-Year Plan telecom industry targets upward due to surging market demand. Officials predict that land-line phones will grow from 44 million in 1995 to 123 million in 2000, and cell phone users will grow from 3.6 million in 1995 to 7 million next year to 18 million in 2000. In addition, there are currently 20 million pagers in use in China. MPT officials hope to use $60 billion in overseas investment to help promote telecom sector growth, with a goal of providing 10% of the population with telephones by 2000. China also hopes to reduce the amount of imported switching equipment by 5%, to 30% of the total market next year, through the development of the local switching equipment industry and several foreign-funded switching equipment ventures.
China Daily (PRC), 12/30/96
Foreign Funding Sparks Telecom Growth
Foreign funding and imported technology have been major contributors to China's telecom industry. Some $6.5 billion in foreign loans have gone to fund the purchase of advanced telecom technologies over the last 18 years. China first imported a 10,000 line switching system in 1982. Since then, China's phone switching capacity has grown to 100,000 million lines, and there are over 6.5 million mobile phone users. Foreign technology imports now allow China to domestically produce 25 million lines worth of switching capacity annually.
China Economic Information (PRC), 12/31/96
Seven Million Mobile Phone Users in 1997
A newly released report of the Ministry of Electronics Industry said that China will have seven million mobile telephone subscribers by years end, a 35 percent leap over 1996. The mobile telecom channels will reach 500, a 25 percent gain.
Xinhua News Agency (PRC), 12/27/96
Swelling Demand for Telecom Equipment
The Ministry of Posts and Telecommunications is being forced to modify its Ninth Five Year Plan upward due to the mushrooming demand for telecommunications equipment. By 2000, land-line telephone and cellular equipment will reach 123 million subscribers, up 78.7 million from 1995. Total telephone exchanges will hit 100 million lines.
China Daily Business Weekly (PRC), 01/05/97
Ministry of Posts & Telecom Hopes to Post 30 Percent Gain
In 1997, the Ministry of Posts and Telecommunications intends to boost revenues by $20.48 billion by increasing telephone coverage and recruiting Internet and mobile phone subscribers. Although fixed asset investment in the sector is expected to drop $361 million, a 30 percent increase over 1996 is predicted, according to Wu Jichuan, minister of posts and telecommunications. China's telephone coverage is predicted to increase to 7.2 percent in 1997 from 6.2 percent last year. The targets for the campaign are to recruit 15 million new subscribers, including four million new mobile phone subscribers; 150,000 new users of networks such as Internet and E-mail; and 12 fibre optic cables and the completion of 13 others.
Xinhua News Agency (PRC), 01/06/97
Unicom Has not Been Successful in Providing Foreign Telecoms Access to the China Market
Unicom's creation in 1993 was supposed to herald new opportunities for international telecoms players to enter the China market. It was an indication that China wanted to reform the sector. The Chinese government said that Unicom could do business with foreign partners and that it would rival the MPT, which holds a virtual monopoly over the sector and cannot establish joint efforts with foreigners. Beijing said that Unicom would take 10 percent of China's domestic and long distance services and 30 percent of the mobile phone market. The company and its foreign partners were to invest $34.5 billion to achieve these goals. Now, three years later, Unicom's promise of opening the sector has not yet manifested. Many joint ventures have been signed, and some money has been raised but its subscriber base is less than 30,000 and only functions in a handful of cities, and even there the MPT is putting pressure on it. Its biggest problem is that its regulator is also its competitor. The MPT directly controls Unicom by deciding whether or not to provide access to its network. Foreign companies who do deal with it have found that Unicom is merely a way to funnel money and technology from foreigners. Even Unicom's own staff admit this: "We are a way to raise money from the foreigners," said the Unicom deputy general manager. So is it still worth it for foreign telecoms to sign a contract with Unicom? The answer to this is not easy because even though there are problems, Unicom is the only game in town for foreigners who want in to the telecoms market. Some hope that Unicom will eventually pull its act together. The worst thing would be if things opened up and you weren't there.
Far Eastern Economic Review (Hong Kong), 01/09/97
Entry of Foreign Telecoms into China Market Being Considered
A trade official who requested anonymity said that the government is now considering a pilot project to allow foreign investors to enter the telecommunications sector before 2000. At first it will be done on a trial basis in test cities prior to anticipated expansion. It will begin with entrance into value-added telecom services in accordance with a plan submitted at the November Apec meeting in Manila. These services could include electronic voice mail, electronic data interchange, searching of on-line information, value added fax service and processing of on-lion data, said Xue Rongjiu, a professor at the University of Foreign Trade and economics which engages in research for Moftec. Xue predicted that foreign companies would only be allowed a minority stake in the business and at least two thirds of their employees will be Chinese.
China Daily (PRC), 01/08/97
Mobile Phone Subscribers Multiply
The People's Posts and Telecommunications News reported that by the end of November 1996 China had 6.52 million mobile phone subscribers. After it was introduced to the country in 1988, the market for mobile phones has grown significantly. A survey that was recently conducted said that more than 60 percent of mobile phones are privately owned and that mobile telecommunications is one of the fastest growing sectors of the communication industry.
Xinhua News Agency (PRC), 01/09/97
Present Status of Telecom Industry
China now ranks among the world's emerging telecom powers, as its telecommunication sector now has $3.1 billion in assets as well as 406 manufacturing plants. Of the abovementioned plants, 51 are foreign-funded and 188 are state-owned, employing 94,000 people, according to a MPT survey. Yang Xianzu, vice minister of posts and telecommunications said there are not enough large enterprises to meet the demand of the economy of scale. As a result, the ministry will focus more on establishing large conglomerates and enterprise groups in the next few years.
Xinhua News Agency (PRC), 01/02/97
Telecom Sector Had Great Year in 1996
According to Wu Jichuan, China's minister of post and telecommunications, the telecom sector was worth $16 billion in 1996, a 34.5 percent increase over 1995. He said the sharp increase was also representative of growth in earnings, with an expected income of $15 billion. People in most cities now no longer have to wait six months to have a phone installed. Rather, the waiting period has been shortened to a month, Wu said. Some preferential policies that the industry now enjoys may be scaled back or withdrawn in 1997, so many challenges will be faced by the sector in the coming year.
China Economic Information, 01/14/97
A 20 Percent Increase in Telecom Business Expected in 1997
A recent report released by the Ministry of Electronics Industry said that China's telecom market will increase 20 percent this year. The report issued in "China Electronics News" said that domestic demand for program-controlled switching machines will be 25 million lines this year, a 25 percent increase over 1996. Chinese suppliers are beginning to take a larger portion of the market as the foreign share is expected to go from 35 percent to 30 percent. More than 500,000 channels will be added to the mobile phone system, 25 percent over last year. Customers are expected to reach seven million by years end, a 35 percent increase over 1996.
China Economic Information (PRC), 01/21/97
Mobile Phone Subscribers to Pass 7 Million
According to the Ministry of Posts and Telecommunications, China's mobile phone subscribers are predicted to reach to over seven million this year, a 35 percent rise over last year. At MPT blueprint for telecom development also says that China should expect to see 14.4 million mobile phone users by 2000.
Xinhua News Agency (PRC), 01/21/97
Growth in China's Telephone Industry
The Minister of Posts and Telecommunications, Wu Jichuan, said that China expects to have 15 million new telephone subscribers this year. This will boost the national telephone availability rate to 7.4 percent. A fixed asset capital injection is expected to total $11.4 billion, Wu said. Telephone switching capacity will rise to 17 million clients with four million new subscribers to mobile phones.
South China Morninbg Post, 01/28/97
Industry Profile of Mobile Phones in China
The number of mobile phones has been doubling every year in China to reach a total of six million users by the end of 1996. The state-run analog network in China utilizes the British TACS standard with phone sets primarily from Motorola and Ericsson. Originally the two protocols were incompatible so that many provinces had to divide the frequencies into two systems of A and B. In January of 1995 Motorola could troll over 21 provinces and Ericsson could link over 15 provinces. However, phone calls between the two systems had to be linked manually. In January of 1996 this changed as automatic linkage between the two systems were adopted to begin nationwide linkage of the country's analogue mobile phones. Digital cellular communications began only recently. In January 1996 a pilot network using GSM standards provided automatic roaming service to major cities in 15 provinces. Large scale construction of digital cellular networks is now underway in 30 provinces. The entire project should be completed early this year. Many foreign telecom companies are optimistic over the mobile phone market in China. Mobile phones now account for about 19 percent of the conventional phones in China.
China Economic News (PRC), 01/27/97
Shandong to Expand its Telecommunications Capability
To meet its rapid developing needs, Shandong Province plans to invest $722 this year to expand its telecommunication facilities. It intends to build telephone exchanges with a combined capacity of 1.5 million lines and 20,000-terminal long distance exchanges. The number of telephone customers will increase this year to 6.5 telephones to every 100 people.
CBNet (PRC), 02/03/97
Record Growth For Telecom Sector
The demand for telecommunications equipment in Guangzhou is so high that it pushed the number of lines up to one for every two people last year. A municipal official said: "Telecommunications is among the fastest-growing sectors in Guangzhou with 48 telephones for every 100 people ..." 160,000 new lines were added last year to bring the total to 1.5 million. Mobile phones even brought the number higher with 300,000 subscribers. The city expects the growth to continue at this level for some time.
South China Morning Post (Hong Kong), 02/10/97
MPT Shoots For Gain of 30 Percent
The Ministry of Posts and Telecommunications intends to boost revenues by $20.48 billion this year by increasing telephone coverage and recruiting more Internet and mobile phone subscribers. This ambitious target of 30 percent over 1996's numbers is predicted in spite of a drop to $11.45 billion in fixed asset investment in the sector. This is $3 billion less than 1996's investment, according to Wu Jichuan, minister of posts and telecommunications. He said that the telephone switching capacity will increase by 17 million lines this year, bringing the total to over 117 million lines. Targets are to recruit 15 million new telephone subscribers, including 4 million new mobile phone users; develop 150,000 new users of data communications networks like Internet and E-mail; begin construction on 12 fiber optic cables.
China Economic Information (PRC), 01/06/97
One in Ten to Have Phone Line by 2000
Although only six out of a hundred people in China are telephone subscribers today, that number will go up to 10 out of 100 by 2000. This means that 30-40 percent of China's urban residents will be connected to phone service by 2000. The annual demand for telephone lines in the next five years will be 20 million lines, China Telecommunications Industrial Association experts predict. This rapid growth will make the supply of such products, as well as imports, excessive. Experts say that the short-sighted expansion of telephone exchange producers in China needs government guidance to ensure positive development. Minister of Posts and Telecommunications Wu Jichuan said that international companies are poised to enter telecommunication operations in China and China should be ready to face this challenge.
China Daily Business Weekly (PRC), 03/09/97
China Announces Installation of Major CDMA Cellular Network in Beijing
Over the weekend, an agreement was signed between Beijing Telecommunications Administration, China Electronic Equipment System Co and Motorola's Asia Pacific Cellular Infrastructure Group to install a major Code Division Multiple Access trial cellular network in Beijing. CDMA is the American system for mobile communications widely used in the United States. The MPT has officially recognized CDMA as a standard coexisting with the European standard of GSM. CDMA's advantages over other technologies, including its spectrum efficiency and wider coverage, are helping it become the technology of choice for the rapidly growing Chinese wireless communications markets. It can increase mobile phone exchange capacity by eight to ten times that of analogue technology and four times that of GSM digital technology. This could bode well for American companies who would be interested in supplying such equipment to trial cities.
China Daily (PRC), 03/11/97
China Pledges Gradual Deregulation of Telecom Sector to Allow Foreign Entry
According to the Minister for Posts and Telecommunications Wu Jichuan, China will continue to have strong control over its telecommunications industry, keeping foreign firms at a distance until the conditions allow for more deregulation. "China will gradually make the conditions ripe to get in line with global telecom practices," he said. However, due to various reasons the sector will not to open up yet.
South China Morning Post (Hong Kong), 03/22/97
Mobile Phones Become Family Item
The Ministry of Post and Telecommunications predicts that the number of mobile phone subscribers will quadruple this year. It was only a couple of years ago when only the rich could afford such an item but the MPT has now decided to make it easy for families to purchase. MPT Minister Wu Jichuan said: "There will be more than 4 million cellular phone subscribers in China by the end of this year, an increase of 3 million from last year." Over the past few years the price of mobile phones has dropped in a range that is affordable to the average Chinese consumer. On March 21, the country announced a $120 cut in the price of cellular phones for those who want to subscribe in Beijing. The country's two phone operators think that the growth potential for cellular subscribers will soon be overwhelming. Experts expect there will be 7.2 to 8.65 million subscribers by 2000. On February 28 Beijing Telecom in Beijing allowed major foreign and domestic cellular phone makers to open franchise counters in its downtown office building, Manufacturers are now being allowed to sell their own phones.
China Daily (PRC), 03/31/97
China's Intranet Market Looks Good for Foreign Players
Although intranets are not new for corporate America, they appear to be a new means of entering China's information technology market. Since intranets are generally hidden from the outside world and open to the company it appears to be a good opening. Foreign telecom companies are now limited to selling equipment and consulting in China but they hope to enter China's service market. Intranets may be the key that opens that door because the differences between services and consulting are blurred. A U.S. company could build an intranet for a major foreign company's China operation, and by building and maintaining the system, establish some form of operations in China.
China Trade Report (Hong Kong), 04/01/97
Outside Challenges to China's Telecom Sector
In light of the increasing global challenge in the telecommunications industry, some Chinese experts and researchers are calling the country to upgrade its telecommunications industry. The reason for the concern results from the universal agreement on basic telecommunications recently reached by 68 governments in Geneva. China did not take part in the telecom negotiations as it is not yet a part of the WTO. However, China's telecom expansion has created a huge market which has drawn many overseas companies. The time to open this sector to foreign companies is not yet ripe in China, but individuals are encouraged to invest in the country's telecom-equipment manufacturing sector. The agreement on basic telecommunications should have a big impact on China because with the increased global challenge, protecting the market cannot be carried on forever, said Chen Xisheng of Nanjing's Posts and Telecommunications College. "We must seize the opportunity to upgrade the telecommunications sector as quickly as possible and rely on our own strength to compete with foreign companies," Chen said. Professor Xue Rongjiu of the University of International Business and Economics said that a pilot project that would allow foreign investors to enter the telecom market on a selective basis before 2000 is now under consideration. This opening would be in select cities which would begin with value added telecom services like electronic and voice mail, searching on-line information, fax services and electronic data interchange. Xue predicts that in these ventures foreign parties will have a minority stake and two-thirds Chinese employees.
China Daily (PRC), 04/08/97