China TMT Market

This report gives an overview of the development of China' s TMT (Telecom,Media and Technology) market, and provides market updates and forecasts.

• In 2007, the China telecom industry developed steadily, but the growth rate of each sector was quite different. Revenue from mobile service and fixed data service greatly exceeded the overall growth rate of the telecom industry, whereas the weight of revenue from fixed local call and long-distance call services gradually decreased.
• In 2007, a stable economic environment created an opportunity for telecom industrial reform, service quality improvement and technology development. By the end of 2007, revenue from the telecom operation sector reached RMB 71.5 billion. In 2008, the large-scale launch of 3G will not suddenly make big profits, but relative investment will increase by about 11%.
• By the end of 2006, the users of fixed-phone, mobile phone and broadband respectively reached 367.81 million, 461.1 million and 104.4 million. There is an obvious migratory trend from fixed-phones to mobile phones.
• In 2007, the mobile VAS experienced a mushrooming of various new services. Although technical restrictions and an unsound market situation exerted a negative influence on the large-scale launch of various new mobile VAS, it is expected that in 2008 most 3G related mobile VAS will experience fast development, which will in turn promote growth in the traditional 2G and 2.5G VAS market.
• In the years of 2006 and 2007, China telecom industry gradually transformed from an industry providing traditional service to an industry that is involve in various information services. The trials of 3G, IPTV and even 4G achieved some success. The launch of 3G in four cities in late 2007 in particular greatly stimulated the confidence of both equipment providers and operators on TD-SCDMA.
• Operators are experiencing a transition stage. China Telecom is emphasizing its informationization trend, China Netcom is focusing on broadband as a new strategy, China Mobile is accelerating the integration of their mobile VAS value chain, and China Unicom is pursuing an advanced brand strategy to prepare for the 3G period.
• Telecom equipment providers are facing more fierce competition. The existence of the scale economics effect is forcing them to cooperate or even merge with each other, which geographically enlarges the market and enriches their own product portfolio. After the marriage of Alcatel and Lucent, and Siemens and Nokia, the market will witness more strategic cooperation in the near future.