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for GIGA Technology Program Mikael Leinonen, Finpro Hong Kong Wireless Broadband in China November 30, 2005
Table of Content <ul><li>Introduction </li></ul><ul><li>Market overview </li></ul><ul><ul><li>Business volume </li></ul></...
1. Introduction
<ul><li>This report has been written for the GIGA program of Tekes, focusing on converging networks. The report provides i...
China in a Nutshell 1. Introduction Source:  www.china.org.cn , CIA world factbook  9,600 000 km ² (Finland 338,000 km²) L...
2. Market Overview 2.1 Business Volume 2.2 Network operators
General market information <ul><li>Telecom revenue reached USD 63 bln in 2004 </li></ul><ul><li>Mobile communications reve...
Market share: fixed vs. mobile <ul><li>Number of mobile phone users surpassed the number of fixed line users at June 2004 ...
Number of mobile users per technology Mobile Users (Millions) per Operator & Technology 4Q/2004 2. Market Overview 2.1 Gen...
Mobile subscribers Source: Ministry of Information Industry 2. Market Overview 2.1 General market information
Geographically diversified penetration <ul><li>Penetration rate only ~25.9% (2004) </li></ul><ul><li>Mobile phone density ...
New mobile users are mainly post paid customers <ul><li>In 2004 ~90% of the new mobile phone users were prepaid customers ...
Mobile Operators 2. Market Overview 2.1 General market information  No mobile operating license! PHS in huge growth Total ...
Mobile data revenues, 1Q 05 vs. 2Q 05 China Mobile and China Unicom 2005 1/Q 2005 2/Q Yearly change (%) Source: Informa, M...
Handset market <ul><li>2004: 73 million handsets sold </li></ul><ul><li>2005 (E): 88 million handsets sold (by CCID) </li>...
China Mobile CM has the right to use a total of 34 MHz of spectrum, for transmission and reception, respectively, in the 9...
China Mobile insight: July 04 – March 05 Source: China Mobile 2. Market Overview 2.2 Network Operators 85,621 88,127 90,77...
China Unicom <ul><li>The only operator in China to run two different networks of GSM and CDMA </li></ul><ul><li>Testing on...
China Unicom: strategies <ul><li>Boosted CDMA users thru calling discount, handset subsidy & prepaid service. </li></ul><u...
Fixed line operators <ul><li>China Telecom </li></ul><ul><li>Overview </li></ul><ul><li>One of the biggest operators in Ch...
Fixed line operators <ul><li>China Railcom </li></ul><ul><li>Its focus on fixed line, broadband service, etc. </li></ul><u...
Service fees 2. Market Overview 2.2 Network Operators Prepaid: 0.07 USD per minute, Sms China Mobile network to Unicom is ...
3. Services 3.1 VAS figures 3.2 SMS & MMS 3.3 Ring Back Tones 3.4 M-Commerce 3.5 Games 3.6 Biggest Service Providers 3.7 R...
<ul><li>Data services account roughly about 10% of operators’ revenue </li></ul><ul><li>Over 1000 Service Providers offeri...
<ul><li>SMS: </li></ul><ul><li>217 bln SMS sent in 2004, 2.69 bln USD of total revenue </li></ul><ul><li>57% of SMS are fo...
Ring back tone – the next big hit? <ul><li>Color Ring Back tones: </li></ul><ul><li>CM’s “Color Ring”, ringback tone provi...
<ul><li>M-Commerce: </li></ul><ul><li>CM’s Handset Purse </li></ul><ul><ul><li>Through SMS, IVR, WAP subscribers operate o...
<ul><li>Mobile Games: </li></ul><ul><li>China is 2 nd  largest market in APAC. </li></ul><ul><li>Role play & action games ...
<ul><li>Mobile email service has not yet been launched in China </li></ul><ul><li>Market of the vertical market applicatio...
<ul><li>Top 5 SP of Games </li></ul><ul><li>SMS Mobile Games </li></ul><ul><ul><li>Linktone, Sina, Sohu, Tom, Mtone, Any8,...
Example of mobile VAS Service Provider – Hurray! Group <ul><li>Hurray! Holding Co., Ltd. (Nasdaq:  HRAY  -  News ), is one...
<ul><li>General revenue sharing model: </li></ul><ul><li>Revenue sharing model depends on nature of cooperation between op...
4. Currently used technologies 4.1 2.5G 4.3 Wireless Local Loop 4.4 SCDMA 4.2 EDGE 4.5  The Cuntong Project 4.6 WLAN
2.5G as mobile broadband <ul><li>GPRS </li></ul><ul><ul><li>China Mobile started in 2002 </li></ul></ul><ul><ul><li>Covers...
China Mobile GPRS data card <ul><li>Starting on July 2004 China Mobile subscribers have had opportunity to use GPRS data a...
EDGE <ul><li>China Mobile is deploying EDGE in some selected areas, to better compete with the high data rates of China Un...
Wireless Local Loop <ul><li>Two fixed line operators China Telecom & China Netcom are operating “quasi” mobile Wireless Lo...
<ul><li>SCDMA, or Synchronous Code Division Multiple Access, is a Chinese home-grown wireless access technology </li></ul>...
The Cuntong project  <ul><li>MII launched the &quot;Cuntong&quot; project in 2004 </li></ul><ul><li>Project aims to speed ...
WLAN <ul><li>Started in 2001, Large-scale deployment in 2002 by China Telecom, Netcom and China Mobile </li></ul><ul><li>E...
WLAN <ul><li>China has developed own  WLAN standard  (came to effect in Dec 2003) </li></ul><ul><li>Standard is called  GB...
5. Third Generation mobile 5.1 General 5.2 License issue 5.3 TD-SCDMA 5.4 3G testing 5.5 HSDPA
3G <ul><li>China has not yet adopted 3G </li></ul><ul><li>3G license decision is still open </li></ul><ul><li>Licenses are...
<ul><li>Government is revealing very limited information about licenses in beforehand </li></ul><ul><li>Currently there is...
<ul><li>China has developed  her own 3G standard, TD-SCDMA  (see chapter 5.3) </li></ul><ul><li>A total of 155 MHz spectru...
3G licenses <ul><li>There will be no license auction </li></ul><ul><li>China Mobile favors WCDMA </li></ul><ul><li>China U...
TD-SCDMA development <ul><li>Datang Telecommunication technology (former China Academy of Telecommunication Technology) is...
TD-SCDMA <ul><li>ITU standard, belongs to 3GPP </li></ul><ul><li>TDD technology, fully compatible with GSM and GPRS </li><...
TD-SCDMA forum <ul><li>Industry consortium devoted to develop and support TD-SCDMA technology </li></ul><ul><li>Establishe...
TD-SCDMA Industry Alliance <ul><li>Formed in October 2002 by: </li></ul><ul><li>Datang Telecom Technology and Industry Gro...
3G testing <ul><li>China Academy of Telecom Research (CATR) is running the 3G testing </li></ul><ul><li>3G test has been r...
Operators’ TD-SCDMA trial networks under the MTnet <ul><li>Problems with terminals, high-speed mobility and cell interfere...
Operators’ WCDMA  trial networks under the MTnet   with network supplier information 5. Third Generation Mobile 5.4 3G Tes...
Operators’ CDMA2000 (EV-DO)  trial networks under the MTnet  with network supplier information 5. Third Generation Mobile ...
3.5G <ul><li>Since China has been delaying 3G licenses so long, there will already be commercial HSDPA solutions available...
6. Other future technologies 6.1 Wimax 6.2 WRAN 6.3 DVB-H 6.4 Beyond 3G & 4G
Wimax <ul><li>Wimax has lot of potential in China, since the fixed line network penetration is still rather small </li></u...
<ul><li>The Wireless Technology Innovation Institute of Beijing University of Post and Telecommunication (WTI-BUPT) is one...
WRAN (IEEE 802.22) <ul><li>A Wireless Regional Area Network (WRAN) system based on 802.22 protocols is intended to make us...
<ul><li>Currently the coming 3G is the big topic and mobile television is not widely discussed yet </li></ul><ul><li>Still...
UWB <ul><li>UWB technology is most suitable for short range transmission, with distances up to 10-20 meters </li></ul><ul>...
<ul><li>Currently Chinese research institutes are talking about B3G, not 4G </li></ul><ul><li>There are basically two bran...
Datang Mobile – Beyond TD-SCDMA <ul><li>Improvement of the existing technology </li></ul><ul><ul><li>Joint Detection, Smar...
<ul><li>Multi-Carrier TD-SCDMA </li></ul><ul><li>Basic Technologies </li></ul><ul><ul><li>Joint Detection </li></ul></ul><...
7. Policy making and public sector’s role 7.1 CATR 7.2 Communication Standard Association 7.3 CJK Standards Meeting
<ul><li>China has a planned economy , using 5-year plans </li></ul><ul><li>Each 5-year plan gives guidelines and goals for...
<ul><li>Ministry of Information Industry (MII) is the telecom regulator </li></ul><ul><li>Many of the research activities ...
China Academy of Telecommunication Research, CATR <ul><li>Under MII </li></ul><ul><li>Telecom research and consulting to s...
China Academy of Telecommunication Research  Organization chart 7.1 CATR 7. Policy making and public sector’s role
Communications Standard Research Institute of CART <ul><li>Core Services: </li></ul><ul><ul><li>Supporting of governmental...
The Research Institute of Communications Policy  of CATR <ul><li>The Research Institute of Communications Policy is the sp...
China Communication Standard Association, CCSA <ul><li>With the approval of the MII and Standardization Administration of ...
CJK Standards Meeting <ul><li>CJK (China-Japan-Korea) Meeting on Information and Telecommunication Standards started on Ju...
8. Public R&D programs 8.1 General 8.2  NSF 8.3  863 8.4 FuTURE 8.5 Notable research institutes
<ul><li>There are 4 governmental  entities launching nationwide public research funding projects: MOST, National Planning ...
<ul><li>In national level there are currently 5 main research  programs going on in China (NSF, 863, 973, Starfire & Torch...
NSF – Natural Science Fund <ul><li>Covers whole china </li></ul><ul><li>Wireless technology development is one of the targ...
NSF - Natural Science Fund <ul><li>In the past 15 years, NSFC has funded over 52,000 research projects of various categori...
source: http://www.nsfc.gov.cn/e_nsfc/2004/01au/02fs.htm 8.2 NSF 8. Public R&D programs 1 CNY = 0.123793 USD (11/05)
863 Program <ul><li>The National High Technology and Development Program of China </li></ul><ul><li>Started first time in ...
The FuTURE Project <ul><li>China begun developing B3G technologies in 2001, when FuTURE project started </li></ul><ul><li>...
The FuTURE Project <ul><li>The Mission is to “establish universal radio experiment environment that can meet the applicati...
The FuTURE Project <ul><li>The 1 st  phase included vision, spectrum and technology trend evaluations (FuTURE) and Demo sy...
The FuTURE Project <ul><li>863 / Communication Subject / Wireless communication branch / FuTURE project </li></ul><ul><li>...
The FuTURE Project <ul><li>FuTURE project Coordination Committee undertakes the scientific research management and technol...
FuTURE’s working targets 8.4 FuTURE 8. Public R&D programs
FuTURE technology framework <ul><li>OFDM/GMC + TDMA/FDMA based multiple access </li></ul><ul><li>Distributed radio archite...
Achievements <ul><li>Active international cooperation on research and standardization </li></ul><ul><li>Cooperation with J...
FuTURE Forum <ul><li>Established in 2004 </li></ul><ul><li>Non-Governmental & non-profit organization </li></ul><ul><li>Jo...
FuTURE Forum <ul><li>Working scopes: </li></ul><ul><ul><li>To report to governments and relevant organizations the viewpoi...
Notable research institutes for wireless technology <ul><li>The Wireless Technology Innovation Institute of Beijing Univer...
Wireless Core <ul><li>Shanghai Research Center for Wireless Communications is a  Non-profitable organization established i...
9. Private sector R&D activities 9.1 General 9.2 Network equipment  manufacturers 9.3 Handset manufacturers
<ul><li>State owned companies are mainly focusing on 3G and B3G research </li></ul><ul><li>Majority of the companies still...
<ul><li>Network equipment manufacturers: </li></ul><ul><li>ZTE:  GSM, CDMA2000 3X, WCDMA, TD-SCDMA, WLAN, Wimax, PHS </li>...
Mobile phone manufacturers <ul><li>China has granted 38 mobile phone manufacturing license </li></ul><ul><li>Private compa...
10. Foreseeable radical changes
Market is rapidly growing and opening <ul><li>Rapid growth of urban population: over 200 million people are estimated to m...
<ul><li>3G licenses will probably be granted in 1/Q 2006 </li></ul><ul><li>The whole industry is waiting to get confirmed ...
Big operator reform before 3G license granting? <ul><li>In order to avoid duplicate investment in telecommunication indust...
<ul><li>Consolidation among service providers is expected to happen in near future due to changes in revenue scheme </li><...
11. Finnish companies possibilities in China
Finnish companies possibilities in China <ul><li>China’s mobile market is of huge size and still growing rapidly. At the s...
Huge demand of Mobile VAS market <ul><li>Booming VAS market creates huge need for premium content and innovative applicati...
Fulfill the needs of operators <ul><li>Near future, especially the coming 3G era, will see a boom on network investments <...
Converging the diversified infrastructure  <ul><li>Multiple standards need interoperability </li></ul><ul><li>Multimode ha...
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GIGA background study: mobile broadband in China

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  • In this report, a flexible definition is used for Wireless Broadband (or Mobile Broadband, or Wireless Internet Access). These terms refer to either 2G, 2.5G, 3G mobile (cellular, Personal Communication System, 2G, 2.5, 3G) or other wireless technologies (Wi-Fi, WiMAX, WiBRO, or 4G) for high bandwidth wireless access to Internet/Data services. In some cases, the term is used in a more narrow sense to indicate either of the categories.
  • Source: MII
  • Source: MII
  • http://www.chinanex.com/company/index.htm China Mobile Communications Group is the largest telecom operator in China. The company spun off from China Telecom in April 2000 orchestrated by the government to create a competitive environment. China Mobile has 388 billion yuan ($46.7 billion) in asset and 121,000 employees. Revenue for 2004 was 192.4 billion yuan ($23.2 billion), or 35.6% of total telecom revenue in China; net profit was 43.2 billion yuan ($5.2 billion), up 15.3% from 2003 . By the end of 2004, China Mobile had 204.3 million cellphone customers, about 61% of total cellphone users in China (GSM and CDMA combined). China Mobile is listed in the Hong Kong Stock Exchange with ADR trading in New York with a market cap of over $60 billion. China Mobile competes with Unicom in cellphone services and, to a less degree, with China Telecom and Netcom which operate Xiao Ling Tong, a quasi mobile service. Since the mid of 2002 China Mobile has offered GPRS service that has been signed by approx. one third of the GSM users, but so far the proportion of the GPRS/WAP services is only less than 1 percent of their total revenue. In near future, before the 3G era, China Mobile is planning to launch EDGE networks in some limited cities; in order to better compete in data services with its rival China Unicom’s CDMA2000 1X network. China Mobile has its branded VAS platform called Monternet. Monternet offers MMS and hosts third party VAS downloads via WAP. In Monternet there are several different brands for targeted customer groups. One of them is “M-Zone”, which has ring-tones, MMS, mobile payment and games. Since mid 2004 China Mobile has tried to increase customer loyalty by selling tailor maid mobile phones. This is hoped to increase the number of post paid customers and the usage of high-end data services. Sources: [chinanex] [CM interview] [www.wirelessweek.com/article/ca374737?spacedesc=features&amp;stt=001] [www3.gartner.com/DisplayDocument]
  • China Unicom is the world’s largest in CDMA network &amp; 3 rd largest in mobile subscribers. By the end of 2004 it had over 22.56 million CDMA users. Total number of its GSM (77.47 million) and CDMA has exceeded 100 million subscribers. It has upgraded its CDMA network to CDMA2000 1X RTT to offer better data services. China Unicom is also offering dual-mode services for GSM-CDMA users. When moving to 3G, it plans to apply for CDMA2000 EV-DO and WCDMA licenses (testing more with CDMA2000). China Unicom has its CDMA2000 data service platform called Uni-Info. It is jointly developed with Qualcomm on Brew. But due to China Unicom’s GSM network’s bad reputation caused by its poor quality, the CDMA2000 data service has had very little usage so far. The penetration rate of CDMA 1X wireless data service was increasing. As at 30 June 2005, total subscribers of CDMA wireless data service reached 12.168 million. In the first half of the year, revenue from cellular value-added services reached RMB5.37 billion, representing an increase of 96.9%. Revenue from cellular value-added service accounted for 13.6% of the revenue from cellular service
  • CU launched CDMA in Jan 02. After a slow start, growth began to accelerate in June and reached 16 m in Oct 03. It boosted CDMA users by handset subsidies, offering calling discounts bundled with mobile phones &amp; cheap prepaid plans from launch til 1H’03. CM’s long term plan is a coordinated development between GSM &amp; CDMA: GSM is also developing when CDMA is growing. The penetration rate of CDMA 1X wireless data service was increasing. As at 30 June 2005, total subscribers of CDMA wireless data service reached 12.168 million. In the first half of the year, revenue from cellular value-added services reached RMB5.37 billion, representing an increase of 96.9%. Revenue from cellular value-added service accounted for 13.6% of the revenue from cellular service CU established a unified network platform (UNINET) which can provide mobile data services. This unified network platform will offer more services in future including mobile data services of CDMA 1x &amp; supports VoIP, data Internet, video (UniVideo), VPNs &amp; mobile data service
  • Following the successful model established previously in Japan and South Korea, China Mobile and China Unicom outsource almost all content and applications for their wireless value-added services platforms, meaning that these operators rely almost entirely upon third party service providers to drive their network traffic, supply attractive services and increase revenue from their services. In turn, the mobile operators focus on the operation and technical enhancement of their networks, while monitoring service providers&apos; offerings for prohibited content such as pornography and political and religious discourse. For their part, wireless value-added service providers in China rely on the two mobile operators for the network distribution of their content and services, billing and collection, and remittance of revenues. When first setting-up, a third party service provider will obtain the requisite value-added telecommunications licenses from the Chinese government and seek permission from one or both of the mobile operators to offer its services through their networks to their ultimate end-users. The mobile operators, particularly China Mobile, have highly decentralized organizational structures. As a result, separate contracts are usually entered into by the service provider, on the one hand, and the national, provincial and local offices of the mobile operators, on the other hand. The relevant office of the mobile operators will then evaluate the proposed services to ensure, for example, that they do not contain inappropriate content and are not substantively identical to an existing service. If approved, the services can be offered to the mobile operator&apos;s users at a price approved by the mobile operator. Prices for the most basic services can be US$0.01 per use or less, while monthly subscriptions for more advanced services can be several dollars. Given their dominant market positions, the mobile operators have significant negotiating leverage over third party service providers and largely dictate the terms of their cooperative agreements. However, recognizing that they are dependent on service providers to continuously create new, innovative services and drive revenue growth, the mobile operators have to date been willing to give service providers the majority of the revenue generated by their services IVR, Interactive Voice Response , is one of the hottest services currently. It is mostly sex-oriented services and thus the service providers are operating in a gray area. Distribution of pornographic material is banned in China, but so far government or operators haven’t took any large scale action to ban these services.
  • China&apos;s Ministry of Information Industries has issued a policy allowing only six players -- including China Telecom -- to offer VoIP services. China Telecom has been very aggressive to ban VoIP and it has blocked many Skype users to use its networks. Fixed line operators in China definitely see VoIP as a serious threat to their revenues. Nevertheless, China is estimated to have 2 million VoIP users in 2006 and 40 million in 2010. (Norson) http://www.forbes.com/business/feeds/afx/2005/09/12/afx2217719.html
  • Almost all of the company&apos;s 2.5G service revenues were derived from Wireless Access Protocol (&amp;quot;WAP&amp;quot;) services, with a relatively limited contribution from existing Java(TM) services and Multimedia Messaging Services (&amp;quot;MMS&amp;quot;) which were first introduced during the first quarter of 2005. The decline in 2.5G services revenues was mainly due to 1) slow growth of the China Unicom CDMA user base for WAP services, 2) increased number of free services mandated by China Unicom on its WAP portal, and 3) new policies implemented by China Mobile during the quarter to eliminate inactive WAP users from subscription billing, partially offset by growth in number of active users. 2G services comprise Short Messaging Services (&amp;quot;SMS&amp;quot;), Interactive Voice Response services (&amp;quot;IVR&amp;quot;), and a relatively limited contribution from Color Ring Back Tones (&amp;quot;CRBT&amp;quot;). SMS revenues were $2.1 million for the second quarter of 2005, representing a decline of 8.8% as compared with $2.3 million in the previous quarter and a decline of 38.4% as compared with $3.4 million in the second quarter of 2004. The decline in revenues from the SMS business was mainly due to China Mobile&apos;s migration to new billing platforms that resulted in the elimination of inactive users from subscription billing.
  • In general, end users pay two sorts of fees for their mobile Internet usage. One is communication fee that is determined by the regulator and collected by the operators. For the Monternet, China Mobile charges end user USD0.0125 per piece SMS send and USD0.0062 from its service providers. For the WAP service, the communication fee is per minute or per month. The other fee is called an Information fee in the Monternet and is paid for the specific content or application services provided by a SP via China Mobile’s network. The Information fee is paid to and determined by a SP itself but China Mobile suggests the upper limits to its SPs for their SMS and WAP services, respectively. The Information fee is shared only if a SP needs to use China Mobile’s billing systems to charge the fee due from its users. In reality, most SPs do not have their own billing systems and it is more convenient for them to use the operator’s billing system. In this case, Monternet gives every SP two options before signing a business contract. If a SP chooses to take the risk that users fail to pay, China Mobile will share 15% of the Informatiion fee and then transfter 85% of it to the SP. A SP may choose to let China Mobile handle a lot of the, then China Mobile will share 30% of the Information fee.
  • [chinanex, http://www.chinamobilehk.com/images/pdf/2005i_e/2005i_e.pdf] http://www.chinaunicom.com.hk/en/press/pressrelease/news.html?id=4458 [CM interview]
  • source: China Internet Information Center
  • [Source: ChinaNec, TD-SCDMA forum, Interfax, CATR]
  • SCDMA integrated Wireless Access system adopts TDD duplex mode, SCDMA dedicated frequency: 1785-1085 MHz. This frequency is not in conflict with the ITU standard 3G frequency as cited in ITU for application worldwide. SCDMA integrated Wireless Access System uses smart antenna and uplink synchronization technology, which has increased system capacity. SCDMA Integrated Wireless Access System adopts the designing concept for software radio, in which the software is used for the processing of base band signal, and the hardware platform adopts high-speed A/D converter and digital signal processor (DSP). Source: Datang Telecom, Beijing Xinwei
  • Source: www.chinadaily.com.cn, www.china.org.cn
  • At present, there are three WLAN services available to the public. First one was China Telecom&apos;s &amp;quot;Tian Yi Tong&amp;quot; (&amp;quot;Space Wing Link&amp;quot;) in 2001, followed by Netcom&apos;s &amp;quot;Wireless Companion&amp;quot; and China Mobile&apos;s &amp;quot;17201&amp;quot; service. China Mobile operates the largest WLAN with about 800 hotspots which can be accessed by GPRS cellphones and notebooks equipped with a data card. China Telecom has deployed 300 hotspots and Netcom 200. To use WLAN service, customers must register with an operator to obtain a user name and password for access. They also need to purchase a data card for PCMCIA port on a notebook computer. There are two types of data cards, one is for WLAN only, the other can switch automatically between WLAN and GPRS network depending on location and network availability. Many cards are available in the market, including Nokia, Merlin, Datang, Capitel and Panda. The average price is about 1,800 - 2,000 yuan ($217 - 240). Some cards come with advanced features such as SMS/MMS, voice output, fax, and 360º antenna. For China Mobile service, customers need to connect GPRS handset to a laptop through a SIM socket on the data card, then dial &amp;quot;17201&amp;quot; (&amp;quot;8617201&amp;quot; for international locations). Type &amp;quot;172&amp;quot; as user name and password to log in, which can be modified during registration. Service charges for WLAN vary by operators and monthly plans. For China Mobile, customers can choose from usage based plans which .03 yuan for every kilobyte of data transferred through laptop or GPRS handset; other plans include 20 yuan ($2.4) a month for for first 1MB, 100 yuan ($12) for 20MB; additional volume is billed at .01 yuan per kilobyte. They can also choose 200 yuan ($24) for unlimited data volume. There is no charge for roaming. China Telecom targets individuals for WLAN service, who pay 1,500 yuan ($180) for in-home installation and a data card, monthly charge is 150 yuan ($18) for unlimited use. For access from a public location, the charge is .1 yuan (1.2 cents) a minute or 6 yuan (72 cents) an hour. Customer can also buy 30 hours for 50 yuan ($6) a month. Netcom service is designed mainly for business customers. The operator signed with four other operators in 2003 to allow WLAN customers to roam in South Korea, Malaysia, Singapore and Australia. The quality of service differs by operators and type of service they offer. Typically, notebook-based WLAN offers up to 11Mbps (802.11b), but there are limited hotspots available, so that signal may drop unexpectedly if user moves around. GPRS offers a throughput of 15-40Kbps (60-80Kbps with data accelerator), slower than CDMA 2000 1x by Unicom which delivers up to 136Kbps. The biggest advantage of GPRS is coverage: it is available in more than 200 cities plus hotspots, so that customers can take advantage of both networks when travel. Use of WLAN in China is still scarce, partly because most people do not have a notebook, and expense on the service can add up quickly. However, the potential of WLAN in China is significant, it is estimated the market will grow 50% a year through 2006 and the number of hotspots may triple to 6,000 by 2008.
  • The Chinese WLAN standard, called GB15629.11-2003, is very similar to the Institute of Electrical and Electronics Engineers Inc.&apos;s (IEEE&apos;s) 802.11 standard, but it uses a different security protocol, called WLAN Authentication and Privacy Infrastructure (WAPI). To conform to this standard, foreign equipment vendors must license WAPI through a manufacturing agreement with one of 11 Chinese companies designated by the Chinese government, including Legend Group Ltd. and Huawei Technologies Co. Ltd.
  • In year 1998 a German telecommunication company Siemens Technologies and the China Academy for Telecommunications Technology (CATT) began jointly develop 3G mobile technology called TD-SCDMA (Time Division Synchronous Code Division Multiple Access). In the May of 2000 it was formally adopted by ITU as one of the international 3G standard. TD-SCDMA is youngest of the three standards and it has not yet been commercially used. TD-SCDMA is based on TDD (Time Division Duplex) technology that is perceived to be more suitable for data transmission than the FDD (Frequency Division Duplex) that is more suitable for voice transmission. To allow multiple simultaneous users in one transmission channel TD-SCDMA uses TDMA (Time Division Multiple Access) technology that derives the traffic channel frames into seven time slots. This allows both downlink and uplink traffic been send in the same physical channel, so TD-SCDMA can use an unpaired connection instead of paired connection of FDD systems. For synchronous mode TD-SCDMA also has an adaptive CDMA component that uses paired frequency band. [http://www.siemens.ie/mobile/TDSCDMA/tdscdma.htm] TD-SCDMA can work in both symmetric and asymmetric mode. Symmetric service means that same amount of data is sent both uplink and downlink and it is used for voice calls. Asymmetric mode is used for example downloading data, where it is efficient that more time slots are used in downlink than uplink transmission. In China TD-SCDMA will use frequency band of 2010 MHz - 2025 MHz. TD-SCDMA can offer for both circuit and packet switched data the maximum data rate of 2 Mbps. [http://www.umtsworld.com/technology/tdscdma.htm] TD-SCDMA technology allows the use of smart antennas in base stations. These antennas can target signals to and from specific terminal and is thus supposed to reduce the cell interference. However, the cell interference is still one of the biggest practical problems that TD-SCDMA equipment developers haven’t solved. [Interview: Prof. Zhang, Beijing University of Post and Telecommunication] [http://www.tdscdma-forum.org/en/resources/see.asp?id=12, document]
  • There has been lot of estimations that China Satcom and China Railcom would also get a 3G license, possibly TD-SCDMA. But then on the other hand, there are several unofficially announced (by MII official) requirements for licensees, such as a) Has to be Chinese b) Must have existing networks and subscriber base c) Must be financially stable d) Must be capable to build nation wide 3G network. China Railcom and China Satcom do not fulfill all these requirements.
  • TD-SCDMA research began at year 1995 and the current standard release 4 was released in March 2001. 1998 Siemens joined the development. Government is strongly supporting the development of TD-SCDMA in order to get bigger market share for domestic manufacturers. There are several domestic and foreign companies participating in the development work, in which Datang, ZTE, Huawei, Siemens and Philips are among the most active ones (Note: Most of these companies have R&amp;D in more than one 3G standard). There are also some Joint Ventures between domestic and foreign manufacturers focusing on TD-SCDMA R&amp;D (for example TD Tech by Huawei &amp; Siemens, T3G by Datang and Phillips, Nokia &amp; Putian JV ). Foreign companies are slowly increasing their interest in TD-SCDMA development; the latest news was that Eriksson announced to establish TD-SCDMA R&amp;D center to China. Compared to WCDMA and CDMA2000, this developer cluster is still very small. This is definitely one of TD-SCDMA’s weaknesses .
  • Standard development is far behind WCDMA and CDMA2000 Still lot of technical problems with both network equipments and terminals Immature TD-SCDMA is the biggest reason for delayed 3G (CDMA2000 and WCDMA are both regarded as FDD (frequency division duplex) systems.) Unlike other two standards, TD-SCDMA uses unpaired frequency bands, so it offers optimum efficiency for both symmetric and asymmetric data services. Due to its small bandwidth of 1.6 MHz this technology allows flexible allocation of the spectrum. TD-SCDMA uses Smart Antenna technology that is similar to MIMO. TD-SCDMA NEs (network equipments) can be inserted into existing GSM network, as it uses the same core network (this is also the case for WCDMA). Commonly TDD systems are said to fit better data transmission, but be less effective in voice connections. Spectrum is the market in mobile telecommunication system. A system with an effective spectrum will make its network construction and operating cost low. In many countries FDD spectrum is already mostly in use. TD-SCDMA only needs 1/3 of the bandwidth used by WCDMA. For asymmetrical operations such as Internet transmitting, it can change its asymmetry; and for symmetrical operations such as voice transmitting, it can change its symmetry. So, it increases the overall efficiency of the spectrum. (We must still remember, that when talking about standards and their features, we are more referring to theory than ready made and tested systems and applications.) Currently TD-SCDMA chips have been developed by T3G Technology, Chongqing Chongyou Information Technology and ZTE. There are around 20 handset models and among the domestic manufacturers at least ZTE, Huawei, Datang mobile, Putian, Lenovo, Hi-sense, CECT have developed TD-SCDMA models. Samsung’s HGH-T560 (powered by T3G’s chip) has proven video streaming and video calling funtionality. In network equipment side the biggest players are Datang, Huawei and ZTE, but also Motorola, Nortel and Eriksson have joined the group lately. ZTE has deployed a demo TD-SCDMA network in Romania.
  • Latest new members: With the approval of TD-SCDMA Forum Consortium, TCL Communications Co. Ltd has acquired the TD-SCDMA Forum Board Membership. Shanghai DBTEL Industry Co. Ltd and Spreadtrum Communications Technology Ltd. also joined the Forum as Senior Members. Source: TD-SCDMA Forum
  • By focusing on TD-SCDMA’s technologies the Alliance will: pursue the TD-SCDMA standard’s advancement and perfection as well as the TD-SCDMA industry’s management and collaboration; promote the share of resources and mutual benefits between enterprises; advise the government to adopt important industry policies in favor of TD-SCDMA development; and improve the collective competitiveness of the telecommunication enterprises within the Alliance. Within the TD-SCDMA Industry Alliance, the Alliance members operate the uniform Intellectual Property (IP) Rights policies, highly share the technology and market information with each other, frequently communicate with each other, and create a rational labor division, all in order to promote the rapid and healthy development of the TD-SCDMA telecommunication industry;
  • Besides the Mobile Communication Simulation Test Center, MTnet ( testing and simulation platform for GSM/ CDMA/ WCDMA/CDMA2000/TD-SCDMA ), CATR has two other test networks in their premises in Beijing, namely RTnet and EMC Lab.
  • equipment suppliers for each locations and operators. Each foreign supplier was restricted to supply one operator per each location only. Numbers shown in table tell the number of base stations in respectful network.
  • equipment suppliers for each locations and operators. Each foreign supplier was restricted to supply one operator per each location only. Numbers shown in table tell the number of base stations in respectful network.
  • Industry experts see that China Mobile needs to launch HSDPA in the most advanced market areas (like in the biggest cities in coastal area) to compete the data rates of China Unicom’s future EV-DO network. It is still unlikely that China Mobile would deploy HSDPA in large scale.
  • picoChip technology is being used by Intel and Airspan in their WiMAX basestation designs. Source: http://www.atlasventure.com/newsandevents/news.cfm?id=140 The Wireless Technology Innovation Institute, Beijing University of Posts and Telecommunications (WTI-BUPT), located in Beijing, China, is dedicated to the research in advanced wireless technologies. WTI-BUPT has cooperation with domestic and international commercial companies such as China Mobile, China Unicom, China Telecom, Huawei, ZTE, Datang Group, Ericssion, Simens, etc.
  • the system will operate with a minimum spectrum efficiency of 0.5 bit/(sec*Hz) and a typical efficiency of 3 bit/(sec*Hz) including error coding, hence providing a typical capacity of 18 Mbit/s in 6 MHz TV channel, 21Mbit/s in 7 MHz channel and 24 Mbit/s in 8 MHz TV channels in the forward direction. Source: IEEE
  • Natural Science Fund UWB research program Theory and key technology of ultra-wide band high speed wireless access Ultra-wide band wireless communication system has a lot of advantages such as high transmission rate, anti-multiple path interference, and sharing of the same frequency spectrum with existing systems, low power dissipation, easy full digitalization, etc. At present, it has become the first choice for high-speed data transmission. The project is to make breakthroughs in the theory and key technologies by studying some issues in relevant disciplines, to build an ultra-wide band wireless communication network demonstration system, thus laying foundations for a new generation of high speed personal domain network. Main research contents: 1) Optimum theory of designing ultra-wide band mini-antennae, and the combination of antennae and send-receive front end; 2) Transmission characteristics of ultra-wide band signal, especially that under the indoor density multi-path environment; 3) Theory and technology of high performance receiving system; 4) Technologies of frequency spectrum coexistence and compatibility of ultra-wide band system and other communication systems; 5) Communication network protocol based on ultra-wide band technology. source: http://www.nsfc.gov.cn/e_nsfc/2004/02gp/002kp/006.htm
  • Besides Datang Mobile, all the rest B3G research is under the FuTURE project and thus discussed in the same chapter
  • Communications Standard Research Institute communicates with 3GPP and ITU and offers consulting for MII. It also has s ome research cooperation with universities under the national research programs. Institute cooperates with private companies on standard research and drafting for China Communication Standard Association (CCSA) for domestic standardization. One of the core business areas is to offer testing services. The institute has two large-scale labs, i.e. &amp;quot;Communications Network Integrated Experiment Simulation Test Center ( RTNet)“ and &amp;quot;Mobile Communication Simulation Test Center ( MTNet ) &amp;quot;, with integrated test environment simulating fixed and mobile network, leading test instrument and software-simulated development tool, as well as a professional test team. RTnet is for fixed line testing, e.g. NGN and IPv6. and MTnet is for 3G testing. Institute also runs EMC Lab, that is for equipment approval certification testing. MTnet and RTnet are mainly for some high level project, EMC is closer to market. Testing business is the main income source for the Communications Standard Research Institute.
  • Source: http://www.ccsa.org.cn
  • “ In the future, NSFC will continue to focus its international cooperation and exchange on the major tasks of science funding, strive to further promote the funding for &amp;quot;research projects&amp;quot; and &amp;quot;talent training&amp;quot; by taking promoting fountainhead innovation as its guideline, and implement the strategic plan of creating a favorable environment for Chinese scientists to participate in international (regional) cooperation and exchange in an attempt to advance with times and obtain more productive and fruitful achievements in international cooperation. “ Source: NSF
  • source: http://www.nsfc.gov.cn/e_nsfc/2004/01au/02fs.htm In the past 15 years, NSFC has funded over 52,000 research projects of various categories by investing a total sum of 6.6 billion RMB, including 49,000 General Program projects, 1,369 Key Program projects, 188 Major Program projects and 3,000 Special Fund projects. More than 60,000 scientists are supported annually by NSFC to conduct basic research. In addition, 7,400 young researchers have been granted the Young Scientists Fund, 711 have been granted the National Science Fund for Distinguished Young Scholars, and 144 have been granted the Overseas, Hong Kong and Macao Young Scientists Cooperation Fund. With the consistent support from NSFC, a big number of major research achievements and breakthroughs have been obtained and NSFC has made important contributions in promoting the progress of Chinese basic research and talent training.
  • In 2002, the IT sector covered 20% of the whole 863 Program in terms of total expenditure and number of projects. 863 sub-projects were divided as follows: University and College 39% Research Institute 28% Enterprises of various types 30% Others 3% Applied technology development corresponded 64% and Applied basic research corresponded 33% of all the projects. In terms of expenditure, applied technology development corresponded 62% and applied basic research 23% of all the projects. Regional distribution of the projects was clearly highest in Beijing, which had 34.9% of all the projects (632 projects). Shanghai was number two, having 10.1% of all the projects. Source: MOST, 863 Annual Report 2002
  • Phase 1. In this phase, investigations on key technologies for air interface of beyond 3G/4G system and development of demo systems for verification of the key technologies will be finished; demonstration of various future wireless services on the demo system will be carried on; some corresponding proposals will be submitted to ITU. Phase 2. In this phase, researches on air interface of beyond 3G/4G system will continue to make it mature, and researches on systematic technologies (including technologies on the inter-connectivity with Ad hoc networks and nomadic wireless access network, etc.) will be carried on. Field trial of the demo system with the ability to bear beyond 3G/4G services inter-connected with other external networks will be carried out. Preliminary standardization documentation for beyond 3G systems will be submitted to ITU. Phase 3. In this phase, major special projects will be launched to support large-scale field trial and completion of standardization documentation for beyond 3G/4G system for universal radio environment.
  • Source: Professor Zhang Ping, Secretariat of Future Forum
  • It was previously the Wireless Communication Department of Simit ( Shanghai Institute of Microsystem and Information Technology ). Around 70% of the funding comes from government projects (1/3 of this is from CAS) and remaining 30% from private companies. The private sector projects are rather equally divided between foreign and domestic companies.
  • Transcript of "GIGA background study: mobile broadband in China"

    1. 1. for GIGA Technology Program Mikael Leinonen, Finpro Hong Kong Wireless Broadband in China November 30, 2005
    2. 2. Table of Content <ul><li>Introduction </li></ul><ul><li>Market overview </li></ul><ul><ul><li>Business volume </li></ul></ul><ul><ul><li>Network Operators </li></ul></ul><ul><li>Services </li></ul><ul><ul><li>VAS Figures </li></ul></ul><ul><ul><li>SMS & MMS </li></ul></ul><ul><ul><li>Ring Back Tones </li></ul></ul><ul><ul><li>M-Commerce </li></ul></ul><ul><ul><li>Games </li></ul></ul><ul><ul><li>Other services </li></ul></ul><ul><ul><li>Biggest Service Providers </li></ul></ul><ul><ul><li>Revenue sharing model </li></ul></ul><ul><li>Currently used Broadband technologies </li></ul><ul><ul><li>2.5G </li></ul></ul><ul><ul><li>EDGE </li></ul></ul><ul><ul><li>Wireless Local Loop </li></ul></ul><ul><ul><li>SCDMA </li></ul></ul><ul><ul><li>The Cuntong Project </li></ul></ul><ul><ul><li>WLAN </li></ul></ul><ul><li>3G </li></ul><ul><ul><li>General </li></ul></ul><ul><ul><li>Lisence issue </li></ul></ul><ul><ul><li>TD-SCDMA </li></ul></ul><ul><ul><li>3G testing </li></ul></ul><ul><ul><li>HSDPA </li></ul></ul><ul><li>Other future technologies </li></ul><ul><ul><li>Wimax </li></ul></ul><ul><ul><li>WRAN </li></ul></ul><ul><ul><li>DVB-H </li></ul></ul><ul><ul><li>Beyond 3G, 4G </li></ul></ul><ul><li>Policy making and public sector’s role </li></ul><ul><ul><li>CATR </li></ul></ul><ul><ul><li>Standard Association </li></ul></ul><ul><ul><li>CJK Standards meeting </li></ul></ul><ul><li>Public R&D programs </li></ul><ul><ul><li>General </li></ul></ul><ul><ul><li>NFS </li></ul></ul><ul><ul><li>863 </li></ul></ul><ul><ul><li>FuTURE </li></ul></ul><ul><ul><li>Notable research institutes </li></ul></ul><ul><li>Private sector R&D activities </li></ul><ul><ul><li>General </li></ul></ul><ul><ul><li>Network equipment manufacturers </li></ul></ul><ul><ul><li>Handset manufacturers </li></ul></ul><ul><li>Foreseeable radical changes </li></ul><ul><li>Finnish Companies’ possibilities in China </li></ul>
    3. 3. 1. Introduction
    4. 4. <ul><li>This report has been written for the GIGA program of Tekes, focusing on converging networks. The report provides information on the China wireless broadband markets. </li></ul><ul><li>This report discusses the following issues </li></ul><ul><ul><li>Overview of the China wireless broadband market </li></ul></ul><ul><ul><li>Competitive environment </li></ul></ul><ul><ul><li>Technology adoption and outlook </li></ul></ul><ul><ul><li>Available services </li></ul></ul><ul><ul><li>Government’s role in the development of the wireless broadband </li></ul></ul><ul><ul><li>Public & Private R&D activities for wireless broadband technologies </li></ul></ul><ul><ul><li>Opportunities for Finnish companies </li></ul></ul>1. Introduction
    5. 5. China in a Nutshell 1. Introduction Source: www.china.org.cn , CIA world factbook 9,600 000 km ² (Finland 338,000 km²) Land Area urban population: 41.8%; rural population: 58.2%. Metropolitan Population $5,600 (2004 est.) GDP per capita Shanghai Largest City 1.3 billion (Finland 5.3 million) Population China National Statistics 2004
    6. 6. 2. Market Overview 2.1 Business Volume 2.2 Network operators
    7. 7. General market information <ul><li>Telecom revenue reached USD 63 bln in 2004 </li></ul><ul><li>Mobile communications revenue: </li></ul><ul><ul><li>USD 27 bln </li></ul></ul><ul><ul><li>13.2% increase from 2003 </li></ul></ul><ul><ul><li>~43% of total telecom revenue </li></ul></ul><ul><li>Number of mobile phone users was 340 million by the End of 2004 </li></ul><ul><li>~25.9% user penetration by the end of 2004 </li></ul><ul><li>Mobile penetration is estimated to double itself by 2010 </li></ul>2. Market Overview 2.1 General market information
    8. 8. Market share: fixed vs. mobile <ul><li>Number of mobile phone users surpassed the number of fixed line users at June 2004 </li></ul><ul><li>Pure mobile operator China Mobile is the biggest in market share by revenue and subscribers </li></ul><ul><li>Two fixed line operators Telecom and Netcom are now achieving more market share with “quasi” mobile PHS service </li></ul>2. Market Overview 2.1 General market information
    9. 9. Number of mobile users per technology Mobile Users (Millions) per Operator & Technology 4Q/2004 2. Market Overview 2.1 General market information
    10. 10. Mobile subscribers Source: Ministry of Information Industry 2. Market Overview 2.1 General market information
    11. 11. Geographically diversified penetration <ul><li>Penetration rate only ~25.9% (2004) </li></ul><ul><li>Mobile phone density differs a lot in different areas. Wealthy East-coast is leading in subscriber numbers </li></ul>Comparison of new mobile subscribers in East-, Central- and Western China; 1/H 2003, 1/H 2004 and 1/H 2005 (Y-axis: subscribers 10.000 ). 2. Market Overview 2.1 General market information
    12. 12. New mobile users are mainly post paid customers <ul><li>In 2004 ~90% of the new mobile phone users were prepaid customers </li></ul><ul><li>This has caused the decrease in operators’ ARPU </li></ul>Comparison of Fixed Line and Mobile communication ARPU in 2003-2005 (Monthly ARPU, RMB) [ 1 CNY = 0.123793 USD (11/05) ] 2. Market Overview 2.1 General market information
    13. 13. Mobile Operators 2. Market Overview 2.1 General market information No mobile operating license! PHS in huge growth Total (including Fixed line): RMB 64.9 billion (US$ 7.8 billion) PHS: 20.08 mln PHS (LittleSmart) since 1997 China Netcom (No mobile license, but operates PHS) No mobile operating license! PHS in huge growth Total (including Fixed line): RMB 161.2 billion (US$ 19.4 billion) PHS: 39.12 mln PHS (LittleSmart) since 1997 China Telecom (No mobile license, but operates PHS) GSM-CDMA dual mode service since 2H/2004 RMB 79.33 billion (US$ 9.6 billion) GSM 88.76 mln CDMA 30.47 mln GSM since 1994, cdmaOne since 2002, CDMA2000 1X since late 2003 China Unicom Planning to launch EDGE in 2H/2005 RMB 192.4 billion (US$ 23,244 billion) GSM: 223.78 mln GSM since 1995, GPRS since 2002 China Mobile Note Operating revenue 2004 Users Network Operator
    14. 14. Mobile data revenues, 1Q 05 vs. 2Q 05 China Mobile and China Unicom 2005 1/Q 2005 2/Q Yearly change (%) Source: Informa, Mobile Media Analyst, Oct 05 2. Market Overview 2.1 General market information 79.03 85.48 14 116.67 15 120.33 China Unicom 101.2 110.52 21.4 515 18 416.67 China Mobile Data ARPU Data revenue/ month Data Share of Revenue (%) Data revenue/ month ($ milj.) Data Share of Revenue (%) Data revenue/ month ($ milj.)
    15. 15. Handset market <ul><li>2004: 73 million handsets sold </li></ul><ul><li>2005 (E): 88 million handsets sold (by CCID) </li></ul><ul><li>Over 1000 handset models in market </li></ul><ul><li>Nokia, Motorola, Samsung and Bird are leading the market </li></ul><ul><li>Domestic manufactures have less than 45% of the total market </li></ul>2. Market Overview 2.1 General market information
    16. 16. China Mobile CM has the right to use a total of 34 MHz of spectrum, for transmission and reception, respectively, in the 900 MHz frequency band and the 1800 MHz frequency band in Mainland China. Source: China Mobile 2. Market Overview 2.2 Network Operators Subscriber Base ( in thousands 23,070 22,220 850 Cumulative net additions 3,581 3,476 105 Net additions 227,362 166,625 60,737 Subscriber number Total subscriber Prepaid subscriber Contract subscriber   As of 31 July, 2005
    17. 17. China Mobile insight: July 04 – March 05 Source: China Mobile 2. Market Overview 2.2 Network Operators 85,621 88,127 90,771 Number of Employees 86.0% 83.6% 84.2% Network Utilisation Rate 226 million 244 million 254 million Network Capacity (Users) 40.0 billion 62.8 billion 59.1 billion * Short Message Services Usage Volume (Messages) 147.09 million 156.83 million 174.00 million Number of Users of Mobile Data Services 0.037 $ 0.035 $ 0.035 $ * Average Revenue per Minute (USD) 297 313 318 * Average Usage per User per Month (MOU) (Minutes/User/Month) 170.37 billion 188.27 billion 196.48 billion * Total Usage (Minutes) 11.14 $ 11.27 $ 11.02 $ * Average Revenue per User per Month (ARPU)(USD/User/Month) 8.91 million 9.91 million 9.58 million * Net increase in subscribers 194.38 million 204.29 million 213.87 million Number of Subscribers As at 30 September 2004/ For the period from 1 July 2004 to 30 September 2004 As at 31 December 2004/ For the period from 1 October 2004 to 31 December 2004 As at 31 March 2005/ For the period from 1 January 2005 to 31 March 2005
    18. 18. China Unicom <ul><li>The only operator in China to run two different networks of GSM and CDMA </li></ul><ul><li>Testing on CDMA EV-DO & CDMA EV-DV as 3G </li></ul><ul><li>(Tianjin and Shanghai has built EV-DO trail network) </li></ul><ul><li>Speculation that China Unicom can be split up two </li></ul><ul><li>Uni-Info, branded WAP portal. </li></ul><ul><li>Established UNISK Information Technology (together with SK Telecom) to engage in wireless value added service business </li></ul><ul><li>Uni-Java (developed with Qualcomm) and Brew are two application platforms for China Unicom </li></ul>2. Market Overview 2.2 Network Operators
    19. 19. China Unicom: strategies <ul><li>Boosted CDMA users thru calling discount, handset subsidy & prepaid service. </li></ul><ul><li>It CDMA targets more to Hi- & Mid-End users & business customers </li></ul><ul><li>“ World Wind”, a branded service of dual-mode phone services enables users to transfer between GSM and CDMA network automatically </li></ul><ul><li>Placing increasing attention to mobile applications as service differentiation eg: Mobile Wallet </li></ul>2. Market Overview 2.2 Network Operators
    20. 20. Fixed line operators <ul><li>China Telecom </li></ul><ul><li>Overview </li></ul><ul><li>One of the biggest operators in China market (No.2 for revenue). </li></ul><ul><li>Focus on fixed line, broadband service, etc. Its main business area is southern parts of China </li></ul><ul><li>China have 65.2 million Wireless Local Loop (WLL) user at the end of 2004, China Telecom occupies 60% WLL market </li></ul><ul><li>Plan to obtain 3G license in the future </li></ul><ul><li>China Netcom </li></ul><ul><li>Overview </li></ul><ul><li>Third largest operators in China. </li></ul><ul><li>Focus on fixed line, broadband service, WLL, etc </li></ul><ul><li>Main business area are north part of China </li></ul><ul><li>Occupy 40% WLL market share </li></ul><ul><li>Official partner of 2008 Olympic Games </li></ul>2. Market Overview 2.2 Network Operators
    21. 21. Fixed line operators <ul><li>China Railcom </li></ul><ul><li>Its focus on fixed line, broadband service, etc. </li></ul><ul><li>Its network cover whole country </li></ul><ul><li>Launched GSM-R trial network in 2004 </li></ul><ul><li>Testing 3G </li></ul><ul><li>China Satcom </li></ul><ul><li>Established in 2001, focus on satellite communication. </li></ul><ul><li>It devotes to develop satellite communication, broadcasting and related business </li></ul><ul><li>Testing 3G </li></ul>2. Market Overview 2.2 Network Operators
    22. 22. Service fees 2. Market Overview 2.2 Network Operators Prepaid: 0.07 USD per minute, Sms China Mobile network to Unicom is 0.018 USD and 0.012 USD from Unicom to China Mobile. 0.05 USD 6,19 USD 75 -370 USD GSM 0.05 USD 6,19 USD 150 - 370 USD CDMA <ul><li>Basic Plan: no monthly fee, usage is charged at 0.004 USD per kilobyte; </li></ul><ul><li>Economy Plan: 2.4 USD a month for 1MB free data volume, and 0.0012 USD for each additional kilobyte; </li></ul><ul><li>Elite Plan: 12 USD a month for 20MB; 4) Business Plan: 24 USD a month for unlimited usage. </li></ul>0- 0.04 USD per kilobyte 0-25 USD 250 USD or less GPRS 0.15 USD /hour, sms XLT- cellphone 0.01 USD p er message 0.014 3.09 USD 75 - 250 USD WLL service Value added services, sms, e-net, call forwarding Minute price Monthly fee Handsets Service
    23. 23. 3. Services 3.1 VAS figures 3.2 SMS & MMS 3.3 Ring Back Tones 3.4 M-Commerce 3.5 Games 3.6 Biggest Service Providers 3.7 Revenue Sharing model 3.6 Other services
    24. 24. <ul><li>Data services account roughly about 10% of operators’ revenue </li></ul><ul><li>Over 1000 Service Providers offering mobile VAS </li></ul><ul><li>Total market value of mobile VAS exceed 2 billion Euro in 2003 </li></ul><ul><li>VAS Market information at Q4 of 2004 </li></ul><ul><ul><li>WAP user reach 14.9 million, revenue 104 million Euro </li></ul></ul><ul><ul><li>Java and Brew games are smoothly increasing, revenues are 2.5 million and 1 million Euro </li></ul></ul><ul><ul><li>IVR market revenue 24.5 Euro </li></ul></ul><ul><ul><li>CRBT increase fast, user reach 22 million, expect to reach 60 million in 2005, revenue 33.6 million Euros </li></ul></ul>3. Services 3.1 VAS figures
    25. 25. <ul><li>SMS: </li></ul><ul><li>217 bln SMS sent in 2004, 2.69 bln USD of total revenue </li></ul><ul><li>57% of SMS are for chat & games, followed by ringtones, pictures, news, financial info, </li></ul><ul><li>CM’s top 5 SPs capture 57% revenue from WAP SMS. </li></ul><ul><li>Revenue from SMS is leveling off </li></ul><ul><li>MMS: </li></ul><ul><li>Both operators started MMS with branded content. </li></ul><ul><ul><li>Color messaging by CM </li></ul></ul><ul><ul><li>Color E by CU – MMS, IMAP (emails), LBS </li></ul></ul><ul><li>Number of MMS users reached 6.98 million, revenue 31.1 million USD </li></ul><ul><li>MMS is billed at USD 0.096 each (SMS is USD 0.012 each.) </li></ul><ul><li>Users also need to pay for MMS content downloaded from Internet portals. </li></ul>3. Services 3.2 SMS & MMS
    26. 26. Ring back tone – the next big hit? <ul><li>Color Ring Back tones: </li></ul><ul><li>CM’s “Color Ring”, ringback tone provided by WiseSpot’s WiseRing personalized VAS platform built on NMS Communications technology. </li></ul><ul><li>CU’s [email_address] offers a vast choice of different melodies for handset ringers. </li></ul><ul><li>Special effect ringtones account 40% of downloads. </li></ul><ul><li>Avg price: USD 0.25/download, USD 0.8/month fee </li></ul>3. Services 3.3 Ring Back Tone
    27. 27. <ul><li>M-Commerce: </li></ul><ul><li>CM’s Handset Purse </li></ul><ul><ul><li>Through SMS, IVR, WAP subscribers operate on bank accounts to purchase, transfer a/c, inquiry balance by SMS </li></ul></ul><ul><ul><li>Will expand to shopping, a/c transfer, online payment, security deal, etc. </li></ul></ul><ul><li>CU’s Mobile Wallet Service </li></ul><ul><ul><li>Cooperation with China Construction Bank </li></ul></ul><ul><ul><li>Online payment, money transfer via mobile phone </li></ul></ul>3. Services 3.4 M-Commerce
    28. 28. <ul><li>Mobile Games: </li></ul><ul><li>China is 2 nd largest market in APAC. </li></ul><ul><li>Role play & action games most popular. </li></ul><ul><li>Mobile gaming market topped USD $98 million, 150% growth from 2003 </li></ul><ul><li>Estimation for 2005: $ 177,5 million </li></ul><ul><li>Currently, majority of revenue comes from offline mobile games </li></ul><ul><li>Increasing Java and Brew support in mobile handsets is boosting the game market </li></ul><ul><li>Mobile games are mostly from Japan & Korea, few Finnish already in market </li></ul><ul><li>Price: 0.5-1 USD/download Java Game </li></ul>3. Services 3.5 Games
    29. 29. <ul><li>Mobile email service has not yet been launched in China </li></ul><ul><li>Market of the vertical market applications (professional use) is still in initials </li></ul><ul><li>Location Based Services have certain restrictions </li></ul><ul><li>Use of VoIP has been banned by China Telecom </li></ul>3. Services 3.6 Other services
    30. 30. <ul><li>Top 5 SP of Games </li></ul><ul><li>SMS Mobile Games </li></ul><ul><ul><li>Linktone, Sina, Sohu, Tom, Mtone, Any8, Tencent </li></ul></ul><ul><li>WAP Mobile Games </li></ul><ul><ul><li>Kongzhong, Nihon, Shenzhen Xuntian, Mobile NAVI, NewPalm </li></ul></ul><ul><li>Java Mobile Games </li></ul><ul><ul><li>Kongzhong, Shanda’s Digital Red, Magus, 5wan.com, BJ Mig </li></ul></ul><ul><li>Top 5 SP of SMS </li></ul><ul><ul><li>Tencent </li></ul></ul><ul><ul><li>Sina </li></ul></ul><ul><ul><li>TOM </li></ul></ul><ul><ul><li>Linktone </li></ul></ul><ul><ul><li>Sohu </li></ul></ul><ul><li>Top 5 Sp of IVR </li></ul><ul><ul><li>TOM </li></ul></ul><ul><ul><li>Mtone </li></ul></ul><ul><ul><li>Linktone </li></ul></ul><ul><ul><li>Sina </li></ul></ul><ul><ul><li>Tencent </li></ul></ul><ul><li>Top 5 SP of WAP (China Mobile) </li></ul><ul><ul><li>Kongzhong </li></ul></ul><ul><ul><li>TOM </li></ul></ul><ul><ul><li>Nihon Enterprise </li></ul></ul><ul><ul><li>GoodFeel (Sohu) </li></ul></ul><ul><ul><li>Xuntian </li></ul></ul>3. Services 3.7 Biggest Service Providers Top Service Providers in 2004
    31. 31. Example of mobile VAS Service Provider – Hurray! Group <ul><li>Hurray! Holding Co., Ltd. (Nasdaq: HRAY - News ), is one of the leading providers of advanced wireless value-added services and mobile telecommunication network software in the People's Republic of China </li></ul><ul><li>Financial results for the second quarter ended June 30, 2005: </li></ul><ul><ul><li>Total revenues: $15.0 million, growth of 25.1% year-over-year </li></ul></ul><ul><ul><li>2.5G services revenues: $8.8 million, growth of 21.7% year-over-year </li></ul></ul><ul><ul><li>2G services revenues: $4.6 million, growth of 28.7% year-over-year </li></ul></ul><ul><ul><li>Software and system integration services revenues: $1.6 million, growth of 34.1% year-over- year </li></ul></ul><ul><ul><li>Net income: $5.0 million, growth of 16.0% year-over-year </li></ul></ul><ul><li>In 2/Q 2005 short-term weakness in the 2.5G market due to WAP billing policy changes by China Mobile and slow CDMA user growth experienced by China Unicom </li></ul>Source: Hurray! Holding Co., Ltd. 3. Services 3.7 Biggest Service Providers
    32. 32. <ul><li>General revenue sharing model: </li></ul><ul><li>Revenue sharing model depends on nature of cooperation between operator and SP, SPs and CPs </li></ul><ul><li>Revenue sharing model is typically 15-20(operator):80-85(service provider) </li></ul><ul><li>Normally revenue sharing model between SP and CP is 50:50, some times depend on negotiation </li></ul><ul><li>Recent changes in the model </li></ul><ul><ul><li>China Mobile plans to use 3 different revenue share models with SPs in the future </li></ul></ul><ul><ul><ul><li>15:85 SPs will be responsible marketing </li></ul></ul></ul><ul><ul><ul><li>30:70 Operator will cooperate with SP for marketing for some good service </li></ul></ul></ul><ul><ul><ul><li>50:50 Operator will be responsible for Sales, marketing and support </li></ul></ul></ul><ul><ul><li>Operators are gaining greater control over SPs </li></ul></ul><ul><ul><li>Good for some small SPs if they have attracting services and applications. Operator will help them to do marketing. </li></ul></ul>3. Services 3.8 Revenue sharing model
    33. 33. 4. Currently used technologies 4.1 2.5G 4.3 Wireless Local Loop 4.4 SCDMA 4.2 EDGE 4.5 The Cuntong Project 4.6 WLAN
    34. 34. 2.5G as mobile broadband <ul><li>GPRS </li></ul><ul><ul><li>China Mobile started in 2002 </li></ul></ul><ul><ul><li>Covers 160 biggest cities (roaming in 73 countries) </li></ul></ul><ul><ul><li>Speed around 40 Kbps </li></ul></ul><ul><li>CDMA2000 1X </li></ul><ul><ul><li>China Unicom started at late 2003 </li></ul></ul><ul><ul><li>8.711 million subscribers in 2004 </li></ul></ul><ul><ul><li>Speed around 50-90 kbps </li></ul></ul><ul><li>Wireless Local Loop access service </li></ul><ul><ul><li>Fixed line operators China Telecom and China Netcom started at 1997, became very popular after 2002 </li></ul></ul><ul><ul><li>Internet connection with (theoretical) 32/64 Kbps (minimal use) </li></ul></ul>4. Currently used technologies 4.1 2.5G
    35. 35. China Mobile GPRS data card <ul><li>Starting on July 2004 China Mobile subscribers have had opportunity to use GPRS data adapter for laptop internet access </li></ul><ul><li>Service is called “Moving Wing” </li></ul><ul><li>China Mobile provides the service with Legend’s data card </li></ul><ul><li>Available in 160 cities </li></ul><ul><li>Mainly in business use </li></ul>4. Currently used technologies 4.1 2.5G
    36. 36. EDGE <ul><li>China Mobile is deploying EDGE in some selected areas, to better compete with the high data rates of China Unicom’s CDMA2000 1x network </li></ul><ul><li>China Mobile Guangdong branch has newly launched EDGE network in Guangdong province, servicing more than 18 million potential customers in cities throughout the Guangdong province. </li></ul><ul><li>Service is available with Sierra Wireless AirCard 775 wireless wide area network card </li></ul>4. Currently used technologies 4.2 EDGE
    37. 37. Wireless Local Loop <ul><li>Two fixed line operators China Telecom & China Netcom are operating “quasi” mobile Wireless Local Loop (WLL) service </li></ul><ul><li>It offers limited mobility within one metropolitan area </li></ul><ul><li>The cheap price of WLL service has created price war and is decreasing mobile operators’ (CM & CU) ARPU </li></ul><ul><li>There are two main technologies used for WLL: </li></ul><ul><ul><li>PHS, known as LittleSmart (or Xiao Ling Tong) </li></ul></ul><ul><ul><li>SCDMA, known as Village Wireless Communication (or Da Ling Tong) </li></ul></ul><ul><li>PHS is mainly used for cities and SCDMA for rural areas </li></ul><ul><li>SCDMA is gaining market share from PHS </li></ul><ul><li>August 2005: over 81 million WLL users (55.50 mln as of the end of June 2004) </li></ul><ul><li>Estimated to reach 100 million users by the end of 2005 </li></ul><ul><li>PHS Internet access (32/64Kbps) costs about USD 15 cents an hour </li></ul><ul><li>Average PHS handset price of USD 60 </li></ul><ul><li>LittleSmart also offers some simple mobile VAS and Internet access with the speed of 64 Kbps </li></ul><ul><li>WLL users are mainly low-end customers and use for internet access is minimal </li></ul><ul><li>However, industry experts believe that China Netcom and China Telecom can gradually shift their large WLL customer base into 3G, so it might have heavy impact on the coming 3G competition </li></ul>4. Currently used technologies 4.3 Wireless Local Loop
    38. 38. <ul><li>SCDMA, or Synchronous Code Division Multiple Access, is a Chinese home-grown wireless access technology </li></ul><ul><li>The main developer is Beijing Xinwei Telecom Technology, in cooperation with Datang, Putian Lingyun, TCL, Amoi, Skyworth, Zhenhua, Konka, Hisense, Lenovo, Jinpeng, etc. </li></ul><ul><li>SCDMA Alliance between domestic manufacturers was established in August 2004 </li></ul><ul><li>(MII) has designated the 23 megahertz frequency specially for the system </li></ul><ul><li>Currently the technology is deployed in 106 cities of 16 provinces across China </li></ul><ul><li>Currently SCDMA WLL (wireless local loop) networks have no broadband service, but the next evolution version of SCDMA will have a possibility to offer wireless broadband access </li></ul><ul><li>Government has formed a high-level working group to investigate SCDMA possibilities as an choice for wireless broadband access </li></ul>4. Currently used technologies 4.4 SCDMA SCDMA
    39. 39. The Cuntong project <ul><li>MII launched the &quot;Cuntong&quot; project in 2004 </li></ul><ul><li>Project aims to speed up telecommunications availability in central and western China and rural areas to ensure balanced development </li></ul><ul><li>The Chinese government is aiming to connect 95 per cent of villages to universal telecom services by the end of 2005 </li></ul><ul><li>The country's six major telecom operators are all participating in the program </li></ul><ul><li>Total of 628,000 villages have been connected so far, with 9,357 newly-connected last year </li></ul><ul><li>still more than 50,000 villages in China which remain unconnected </li></ul><ul><li>Teledensity in the rural areas is only 13 percent (compared to the whole China average of 23.7%) </li></ul><ul><li>SCDMA is being adopted by major telecom operators realizing the Cuntong project </li></ul><ul><li>Cuntong project gives SCDMA great market prospects </li></ul>4. Currently used technolgies 4.5 The Cuntong Project
    40. 40. WLAN <ul><li>Started in 2001, Large-scale deployment in 2002 by China Telecom, Netcom and China Mobile </li></ul><ul><li>Equipment market size about $54 million in 2004 </li></ul><ul><ul><li>Estimated to reach $160 million by 2008 (In-Stat: China's WLAN Market Analysis and Forecast 2003-2008) </li></ul></ul><ul><li>By the end of 2004, there were about 1,800 hotspots in China </li></ul><ul><ul><li>Mainly in upscale hotels, business centers and media organizations and other public venues </li></ul></ul><ul><li>There are about 120,000 registered WLAN customers </li></ul><ul><ul><li>About 80% are individual users </li></ul></ul><ul><ul><li>20% business users </li></ul></ul><ul><li>According to some estimations, the user penetration in urban areas is below 5% </li></ul><ul><li>Market is still in beginning, but expected to boom in next 5 years </li></ul><ul><li>Some private companies use wireless LANs, but universities are still the biggest user group </li></ul><ul><li>Only few domestic vendors. Biggest equipment developers are ZTE and Huawei, with joint research with some universities (SZPKU, Tsinghua Uni, South-East Uni) </li></ul>4. Currently used technologies 4.6 WLAN
    41. 41. WLAN <ul><li>China has developed own WLAN standard (came to effect in Dec 2003) </li></ul><ul><li>Standard is called GB15629.11-2003 </li></ul><ul><ul><li>similar to IEEE 802.11, but uses different security protocol </li></ul></ul><ul><ul><li>WAPI (WLAN Authentication and Privacy Infrastructure) </li></ul></ul><ul><li>Original deadline for vendors to sell only WAPI based equipments was June 2004 </li></ul><ul><li>To support WAPI, Foreign companies would need to co-product their equipments with Chinese manufacturers </li></ul><ul><li>Due to strong opposition from foreign countries (especially USA), China announced to delay WAPI requirements in April 2004 </li></ul><ul><li>WAPI is still unlikely to completely disappear, since number of manufacturers have already licensed it </li></ul>4. Currently used technologies 4.6 WLAN
    42. 42. 5. Third Generation mobile 5.1 General 5.2 License issue 5.3 TD-SCDMA 5.4 3G testing 5.5 HSDPA
    43. 43. 3G <ul><li>China has not yet adopted 3G </li></ul><ul><li>3G license decision is still open </li></ul><ul><li>Licenses are estimated to be granted during the 1/H of 2006 </li></ul><ul><li>Final decisions on 3G licenses are to be made in very high political level; probably above the telecom regulator Ministry of Information Industry (MII) </li></ul><ul><li>Possibly all 3 standards will be adopted </li></ul>5. Third Generation Mobile 5.1 General
    44. 44. <ul><li>Government is revealing very limited information about licenses in beforehand </li></ul><ul><li>Currently there is no official & reliable information available about the timetable or operator requirements </li></ul><ul><li>MII has already run several 3G tests to compare different technologies </li></ul>5. Third Generation Mobile 5.1 General
    45. 45. <ul><li>China has developed her own 3G standard, TD-SCDMA (see chapter 5.3) </li></ul><ul><li>A total of 155 MHz spectrum has been scheduled for TD-SCDMA </li></ul><ul><li>Country is big enough to support own standard. Goal is to keep the invested money (infrastructure, R&D) in China. </li></ul><ul><li>Mainly due to political reasons country will most likely also adopt CDMA2000 and WCDMA </li></ul>5. Third Generation Mobile 5.1 General
    46. 46. 3G licenses <ul><li>There will be no license auction </li></ul><ul><li>China Mobile favors WCDMA </li></ul><ul><li>China Unicom is already testing CDMA2000 EV-DV and EV-DO </li></ul><ul><li>Fixed line operators China Telecom and China Netcom are also likely to get 3G license </li></ul><ul><li>Smaller fixed line operators China Satcom and China Railcom will also get the license? </li></ul><ul><li>Lot of guesswork about licenses, whole industry is waiting </li></ul><ul><li>WTO membership should open doors for foreign operators, but that will take time </li></ul>5. Third Generation Mobile 5.2 License issue
    47. 47. TD-SCDMA development <ul><li>Datang Telecommunication technology (former China Academy of Telecommunication Technology) is the most active TD-SCDMA developer </li></ul><ul><li>The biggest manufacturers have formed number of Joint Ventures for TD-SCDMA R&D </li></ul><ul><li>The Chinese Government has already invested more than 1 billion (US$123.3 million) in the research and development (R&D) of TD-SCDMA </li></ul><ul><li>Domestic companies have got heavy public subsidies for TD-SCDMA development </li></ul>TD-SCDMA developer pool 5. Third Generation Mobile 5.3 TD-SCDMA
    48. 48. TD-SCDMA <ul><li>ITU standard, belongs to 3GPP </li></ul><ul><li>TDD technology, fully compatible with GSM and GPRS </li></ul><ul><li>Easy to upgrade from existing infrastructure </li></ul><ul><li>Efficient use of spectrum </li></ul><ul><li>Effective data transmission. Asynchronous uplink – downlink, suitable for Internet traffic </li></ul><ul><li>Use of Smart Antenna technology </li></ul><ul><li>Good mobility: > 120 km/h </li></ul><ul><li>Large cells, with diameter up to 40 km </li></ul><ul><li>Standard development far behind rivals. Standard is very immature, no commercial use so far </li></ul><ul><li>No large scale support from industry. Only few TD-SCDMA chips available </li></ul><ul><li>Lack of equipments and handsets. No mass production. </li></ul><ul><li>No uniform platform for applications -> No application developer “pool” </li></ul><ul><li>Some unsolved technical problems: </li></ul><ul><ul><li>Cell interference </li></ul></ul><ul><ul><li>large cell area functions </li></ul></ul><ul><ul><li>high speed mobility </li></ul></ul><ul><ul><li>poor stability of existing IC’s </li></ul></ul><ul><ul><li>Power consumption of handsets </li></ul></ul>Pros: Cons: 5. Third Generation Mobile 5.3 TD-SCDMA
    49. 49. TD-SCDMA forum <ul><li>Industry consortium devoted to develop and support TD-SCDMA technology </li></ul><ul><li>Established in Dec/2000 by China Mobile, China Telecom, China Unicom, Datang, Huawei, Motorola, Nortel and Siemens </li></ul><ul><li>More than 420 members </li></ul><ul><ul><li>16 Board Members </li></ul></ul><ul><ul><li>18 Senior Members </li></ul></ul><ul><ul><li>390 ordinary members </li></ul></ul>5. Third Generation Mobile 5.3 TD-SCDMA
    50. 50. TD-SCDMA Industry Alliance <ul><li>Formed in October 2002 by: </li></ul><ul><li>Datang Telecom Technology and Industry Group), Guangzhou Soutec (Group) Technology Co., Ltd., Holley Group Co., Ltd., Huawei Technologies Co. Ltd., Legend (Beijing) Ltd., ZTE Corporation, China Electronics Corporation, and China Pu Tian Corporation </li></ul><ul><li>Now 21 members, including: </li></ul><ul><li>UTStarcom, Alcatel Shanghai Bell, Hubei Zhongyou Technology Industry & Commerce Co., Ltd., Shanghai DBTEL, Beijing Envada Electric Power Engineering Technology Co., Ltd., Tongyu Communication Equipment Co., Ltd. and Beijing Zhong Chuang Telecom Test Co., Ltd. </li></ul><ul><li>Main goals are: </li></ul><ul><ul><li>to highly promote the TD-SCDMA industrialization process </li></ul></ul><ul><ul><li>to integrate and coordinate the industry resources </li></ul></ul><ul><ul><li>to lead the enterprises successfully into the third generation mobile communication market </li></ul></ul>Source: http://www.tdscdma-alliance.org 5. Third Generation Mobile 5.3 TD-SCDMA
    51. 51. 3G testing <ul><li>China Academy of Telecom Research (CATR) is running the 3G testing </li></ul><ul><li>3G test has been ran in two phases: 1) Laboratory testing in CATR test lab and 2) field test with all 6 national telecom operators </li></ul><ul><li>CATR 3G test laboratory in Beijing is called MTnet. All the field tests have been conducted and ran by CATR under the name of MTnet. </li></ul><ul><li>MII has Invested almost 25 Million USD on CATR testing facilities </li></ul><ul><li>First test (phase I & II, Core network and RAN) with all 3 standards was ran at 2001/6 to 2003/8 </li></ul><ul><ul><li>Results showed that TD-SCDMA was still too immature for commercial use </li></ul></ul><ul><li>Initial tests for WCDMA and CDMA2000 have been conducted already several years earlier </li></ul><ul><li>The special test for TD-SCDMA was arranged during May and June 2005 and completed successfully. More than 20 models of user terminals have gone through the test and results showed TD-SCDMA to be ready for commercialization </li></ul><ul><li>TD-SCDMA application level testing is still on-going in MTnet. </li></ul>5. Third Generation Mobile 5.4 3G Testing
    52. 52. Operators’ TD-SCDMA trial networks under the MTnet <ul><li>Problems with terminals, high-speed mobility and cell interference </li></ul><ul><li>Only one terminal (by Datang) was available for the phase1 field test </li></ul>5. Third Generation Mobile 5.4 3G Testing China Satcom China Railcom China Railcom China Unicom China Mobile China Mobile China Netcom China Telecom Chengdu ChongQing Shanghai Beijing
    53. 53. Operators’ WCDMA trial networks under the MTnet with network supplier information 5. Third Generation Mobile 5.4 3G Testing China Railcom (10) Eastcom China Telecom (10) Guangzhou Post & Telecom Equipment Co., Ltd China Netcom Lucent China Netcom (10) UT Starcom China Mobile (10) Motorola China Telcom (10) Alcatel China Netcom (10) Nortel China Mobile (10) Ericsson China Netcom (10) Nokia China Telecom (10) Siemens China Mobile (20) China Netcom (10) China Railcom (20) ZTE China Telecom (20) China Unicom (10) China Mobile (20) Huawei Guangzhou Shanghai Beijing Network Equipment Manufacturer
    54. 54. Operators’ CDMA2000 (EV-DO) trial networks under the MTnet with network supplier information 5. Third Generation Mobile 5.4 3G Testing China Unicom (10) Dalian LinkAir China Satcom (5) Putian Capitel China Netcom (10) Motorola China Mobile (10) Lucent China Telcom (10) Samsung China Netcom (10) Nortel China Mobile (10) Ericsson China Satcom (10) ZTE China Unicom (20) Huawei Operators in Guangzhou Operators in Shanghai Operators in Beijing Network Equipment Manufacturer
    55. 55. 3.5G <ul><li>Since China has been delaying 3G licenses so long, there will already be commercial HSDPA solutions available by the time Chinese operators start to build up their 3G networks </li></ul><ul><li>Operators will have change to jump directly to HSDPA in some selected areas </li></ul><ul><li>Huawei and ZTE have announced to launch commercial HSDPA solution in 2006 </li></ul><ul><li>NEC and Samsung will launch HSDPA handsets early 2006 </li></ul><ul><li>China Mobile will conduct HSDPA trials in Beijing in Dec 2005 with various vendors </li></ul><ul><li>Datang Mobile has announced to launch a single carrier HSDPA solution for TD-SCDMA in the 1/Q 2006 </li></ul><ul><li>Datang Mobile has partnered up with Alcatel Shanghai Bell to develop HSDPA solutions for TD-SCDMA </li></ul><ul><li>TD-Tech (Siemens—Huawei JV) has plans to launch commercial TD-SCDMA/HSDPA products in the 1/Q 2006 </li></ul><ul><li>T3G Technology (Datang-Phillips JV) will release the TD-SCDMA/HSDPA chipset and system solution (single carrier, data support up to 2.8Mbps) in the 2/Q 2006 </li></ul>5. Third Generation Mobile 5.5 HSDPA
    56. 56. 6. Other future technologies 6.1 Wimax 6.2 WRAN 6.3 DVB-H 6.4 Beyond 3G & 4G
    57. 57. Wimax <ul><li>Wimax has lot of potential in China, since the fixed line network penetration is still rather small </li></ul><ul><li>Government sees 3G and Wimax as complementary technologies and they have different demand on market. However, so far there is no clear action from government about Wimax </li></ul><ul><li>Biggest Chinese networks equipment manufacturers, ZTE and Huawei, are both very active on Wimax </li></ul><ul><li>Other active Wimax players in China are Intel and Alcatel Shanghai Belling </li></ul><ul><li>Many of the current research projects are focused on the interoperability of WLAN and Wimax </li></ul><ul><li>As a result from TD-SCDMA project and FuTURE project, there will be a need for a Chinese version of Wimax. Some research institutes and companies (such as Wireless Core, ZTE, Huawei) already have activities about this. Research for “Chinese Wimax” has just started recently and government has not yet given any official deadlines for forming the standard. Government is forming the responsible body to run the research </li></ul>6.1 Wimax 6. Other future technologies
    58. 58. <ul><li>The Wireless Technology Innovation Institute of Beijing University of Post and Telecommunication (WTI-BUPT) is one of the most active research institutes studying Wimax in China </li></ul><ul><li>WTI-BUPT has WiMAX Partnership Agreement with Picochip (UK) </li></ul><ul><li>WTI-BUPT will use picoChip's WiMAX reference designs and PC102 processor within its research programmes </li></ul><ul><li>Two parties will work together to develop commercial WiMAX systems optimised for the special needs of the Chinese market </li></ul><ul><li>picoChip has also signed a cooperation agreement with the Institute of Computing Technology (ICT) of the Chinese Academy of Sciences (CAS) to collaborate on the acceleration of WiMAX in China </li></ul>6.1 Wimax 6. Other future technologies
    59. 59. WRAN (IEEE 802.22) <ul><li>A Wireless Regional Area Network (WRAN) system based on 802.22 protocols is intended to make use, on a non-interfering basis, of unused TV broadcast channels to address, as a primary objective, rural and remote areas and low population density underserved markets with performance levels similar to those of broadband access technologies such as digital subscriber line (xDSL) technologies and Digital Cable modem service. A secondary objective is to have this system scale to serve denser population areas where spectrum is available. </li></ul><ul><li>The WRAN system must be capable of supporting a mix of data, voice and audio/video applications. </li></ul><ul><li>The target markets to be addressed by the 802.22 protocols in WRAN networks are single family residential, multi-dwelling units, SOHO, small businesses, multi-tenant buildings and public and private campuses.. </li></ul><ul><li>So far very few Chinese companies involved, but being similar to Wimax it has lot of potential market in China </li></ul>6.2 WRAN 6. Other future technologies
    60. 60. <ul><li>Currently the coming 3G is the big topic and mobile television is not widely discussed yet </li></ul><ul><li>Still no government decision about used standard so far (could also be DVB-H) </li></ul><ul><li>JV company of Shanghai SMG and 东方明珠 has recently begun the DMB Mobile TV trial in Shanghai </li></ul><ul><li>China is also developing own standard for mobile television </li></ul><ul><li>Several parties have propositions for standard; Tsinghua University is strongest among them </li></ul>6.3 DVB-H 6. Other future technologies Mobile TV
    61. 61. UWB <ul><li>UWB technology is most suitable for short range transmission, with distances up to 10-20 meters </li></ul><ul><li>In longer range transmitting UWB’s signal becomes too weak </li></ul><ul><li>Chinese government has no official plans about UWB, but </li></ul><ul><li>China Academy of Telecom Research (CATR) has some small scale UWB research going on for consultancy purpose to support government’s spectrum investigations </li></ul><ul><li>In 2004 NSF (Natural Science Fund) has published UWB research fund (1.8 million Yuan) for public bidding as one of the key programs of the NSF Department of Information Sciences </li></ul>6.4 UWB 6. Other future technologies
    62. 62. <ul><li>Currently Chinese research institutes are talking about B3G, not 4G </li></ul><ul><li>There are basically two branches of B3G research: </li></ul><ul><ul><li>Datang Mobile’s Beyond TD-SCDMA </li></ul></ul><ul><ul><li>B3G research under the FuTURE project </li></ul></ul><ul><li>B3G research in FuTURE Project will be discussed more in details in chapter 8.3 </li></ul>6.5 B3G, 4G 6. Other future technologies B3G – 4G
    63. 63. Datang Mobile – Beyond TD-SCDMA <ul><li>Improvement of the existing technology </li></ul><ul><ul><li>Joint Detection, Smart Antennas, Adaptive Array, MIMO </li></ul></ul><ul><ul><li>HSDPA (& later HSUPA) </li></ul></ul><ul><li>Long Term Evolution for TDD </li></ul><ul><li>Schemes proposed for LTE TDD </li></ul><ul><ul><li>MC TD-SCDMA </li></ul></ul><ul><ul><li>Smooth evolution, better Compatibility </li></ul></ul><ul><ul><li>LTE TDD OFDM </li></ul></ul><ul><ul><li>Totally new solution, for long future of TDD </li></ul></ul>6.5 B3G, 4G 6. Other future technologies
    64. 64. <ul><li>Multi-Carrier TD-SCDMA </li></ul><ul><li>Basic Technologies </li></ul><ul><ul><li>Joint Detection </li></ul></ul><ul><ul><li>Smart antenna </li></ul></ul><ul><ul><li>Uplink synchronization </li></ul></ul><ul><ul><li>DCA </li></ul></ul><ul><ul><li>HSDPA </li></ul></ul><ul><li>Enhanced Technologies </li></ul><ul><ul><li>E-UL, HSUPA </li></ul></ul><ul><ul><li>Enhanced JD, improving the cell-edge performance </li></ul></ul><ul><ul><li>Multiple carriers, based on LCR </li></ul></ul><ul><ul><li>MIMO, Include space multiplex & beamforming </li></ul></ul><ul><ul><li>MBMS, Include macro diversity </li></ul></ul><ul><ul><li>Others, … … … </li></ul></ul>Datang Mobile: Long Term Evolution for TDD 6.5 B3G, 4G 6. Other future technologies
    65. 65. 7. Policy making and public sector’s role 7.1 CATR 7.2 Communication Standard Association 7.3 CJK Standards Meeting
    66. 66. <ul><li>China has a planned economy , using 5-year plans </li></ul><ul><li>Each 5-year plan gives guidelines and goals for domestic industry </li></ul><ul><li>In the current 5-year plan (2000-2005) mobile industry has been selected as one of the key industries </li></ul><ul><li>Mobile industry is in a tight control of the Central government </li></ul><ul><li>Some of the biggest national research programs are also included in 5-year plans </li></ul><ul><li>All the operators and number of equipment manufacturers are either fully or partly government owned </li></ul>7. Policy making and public sector’s role
    67. 67. <ul><li>Ministry of Information Industry (MII) is the telecom regulator </li></ul><ul><li>Many of the research activities for wireless technologies are under the Ministry of Science and Technology (MOST) </li></ul><ul><li>Main focus of government’s research investments is in mobile technologies. Same goes to the state owned companies’ operations </li></ul>7. Policy making and public sector’s role
    68. 68. China Academy of Telecommunication Research, CATR <ul><li>Under MII </li></ul><ul><li>Telecom research and consulting to support MII’s policy making </li></ul><ul><li>The main body in organizing government’s research and funding programs for wireless technologies standardization and development </li></ul><ul><li>Core business divided into 7 department </li></ul>7.1 CATR 7. Policy making and public sector’s role
    69. 69. China Academy of Telecommunication Research Organization chart 7.1 CATR 7. Policy making and public sector’s role
    70. 70. Communications Standard Research Institute of CART <ul><li>Core Services: </li></ul><ul><ul><li>Supporting of governmental administration and regulation </li></ul></ul><ul><ul><li>Formulating national and industrial telecommunication standards </li></ul></ul><ul><ul><li>Technical and consultancy service for operators and manufacturers </li></ul></ul><ul><ul><li>Test and certification of telecommunication equipment </li></ul></ul><ul><ul><li>Technical trial of telecom technology and product </li></ul></ul><ul><li>Major study area: </li></ul><ul><ul><li>3G/B3G </li></ul></ul><ul><ul><li>next generation network ( NGN ) </li></ul></ul><ul><ul><li>network interconnection and interworking </li></ul></ul><ul><ul><li>telecom resources of numbers and radio frequency </li></ul></ul><ul><ul><li>intelligence network </li></ul></ul><ul><ul><li>Signaling network </li></ul></ul><ul><ul><li>PSTN </li></ul></ul><ul><ul><li>broadband packet network </li></ul></ul><ul><ul><li>IP network </li></ul></ul><ul><ul><li>optical transmission network </li></ul></ul><ul><ul><li>synchronous network </li></ul></ul><ul><ul><li>access network </li></ul></ul><ul><ul><li>mobile communications network </li></ul></ul><ul><ul><li>paging, trunk and cordless technology </li></ul></ul><ul><ul><li>microwave and satellite system </li></ul></ul>7.1 CATR 7. Policy making and public sector’s role
    71. 71. The Research Institute of Communications Policy of CATR <ul><li>The Research Institute of Communications Policy is the specialized policy-making consulting department of CATR under MII. This Institute is the main supporting organ serving China communications competent authorities in the policy-making work. It has in-depth participation in telecom industry policies, regulatory policies, laws & regulations and telecom industry development plan stipulation for a long period of time. </li></ul><ul><li>Customers: </li></ul><ul><ul><li>Ministry of Information Industry </li></ul></ul><ul><ul><li>State Development and Reform Commission </li></ul></ul><ul><ul><li>Ministry of Science and Technology </li></ul></ul><ul><ul><li>The governments at various levels including provincial and municipal Communications Administrations </li></ul></ul><ul><ul><li>Telecom operators and manufacturers </li></ul></ul><ul><ul><li>Monetary securities & investment institutions </li></ul></ul><ul><ul><li>R & D institutions at home and abroad </li></ul></ul>7.1 CATR 7. Policy making and public sector’s role
    72. 72. China Communication Standard Association, CCSA <ul><li>With the approval of the MII and Standardization Administration of China and the Civil Affairs Ministry, China Communications Standards Association (CCSA) was founded in December 18, 2002 </li></ul><ul><li>Also foreign companies and foreign-investment enterprises can apply for joining in CCSA </li></ul><ul><li>Scope of activities </li></ul><ul><ul><li>To promulgate the state laws, regulations and policies on standardization and to facilitate the communication between its members and the Authorities </li></ul></ul><ul><ul><li>To carry out research and survey activities on communications standardization system ; to organize its members into participating in such activities as drafting standards, soliciting comments, coordination, verification, standards consistency testing, and interconnection and interworking tests </li></ul></ul><ul><ul><li>To promote the implementation of communications standards through carrying out related activities, such as promulgation of communications standards, consultation, service and training; </li></ul></ul><ul><ul><li>To organize national and international technical seminars as well as activities of cooperation and exchanges </li></ul></ul><ul><ul><li>To undertake work related to standardization commissioned by the relevant Authorities, its members and other organizations </li></ul></ul>7.2 CCSA 7. Policy making and public sector’s role
    73. 73. CJK Standards Meeting <ul><li>CJK (China-Japan-Korea) Meeting on Information and Telecommunication Standards started on June 2002 with an initiative of 4 Standards Development Organizations from the respective countries (CCSA as one of them) </li></ul><ul><li>Background: mutual understanding and cooperation was necessary to promote sound growth and development of the information and telecommunication industries </li></ul><ul><li>The purpose of CJK Standards Meeting is </li></ul><ul><ul><li>to mutually exchange views and information on the status of Information and Telecommunication industries in the three countries </li></ul></ul><ul><ul><li>to contribute to the works of standards organizations of regional and global levels </li></ul></ul><ul><ul><li>to encourage mutual support and assistance among four SDOs </li></ul></ul><ul><li>Contribution to the international standards organizations </li></ul>7.3 CJK Standards Meeting 7. Policy making and public sector’s role
    74. 74. 8. Public R&D programs 8.1 General 8.2 NSF 8.3 863 8.4 FuTURE 8.5 Notable research institutes
    75. 75. <ul><li>There are 4 governmental entities launching nationwide public research funding projects: MOST, National Planning and Reform Bureau, MII and China Academy of Science (CAS) </li></ul><ul><li>Each of them have their provincial departments, who have the right to fund regional level research projects. Beijing, Shanghai and Shenzhen are most active cities in launching regional projects </li></ul><ul><li>Typically in government’s research projects there is an expert group that initiates the project, which is then published for public bidding </li></ul><ul><li>Usually any companies and research institutes can apply for these projects </li></ul><ul><li>In communication technologies largest projects include research on 3G Networks, TD-SCDMA, FuTURE (B3G), CDMA2000, WCDMA, NGN, LAS-CDMA… </li></ul><ul><li>In government funded projects company’s self-funding ratio is usually 50% </li></ul><ul><li>Sino-foreign JV’s can also get public funding, if the majority (51% or more) of the investment and ownership is domestic. </li></ul>8.1 General 8. Public R&D programs
    76. 76. <ul><li>In national level there are currently 5 main research programs going on in China (NSF, 863, 973, Starfire & Torch). </li></ul><ul><li>Among them, NSF & 863 include funding for wireless technology development </li></ul><ul><li>Additionally there are large number of regional research projects </li></ul><ul><li>Many cities have public funds for SME’s high technology R&D </li></ul>8.1 General 8. Public R&D programs
    77. 77. NSF – Natural Science Fund <ul><li>Covers whole china </li></ul><ul><li>Wireless technology development is one of the targets </li></ul><ul><li>Funding for private companies </li></ul><ul><li>Activities include joint research projects and international academic conferences in China and abroad </li></ul><ul><li>Up to now, it has signed cooperative agreements and MOU with 60 science funding organizations and national research institutions in 35 countries and regions and raised its budget for international cooperation and exchange from 0.37 million USD (1987) to 10.15 million USD (2004) </li></ul>8.2 NSF 8. Public R&D programs
    78. 78. NSF - Natural Science Fund <ul><li>In the past 15 years, NSFC has funded over 52,000 research projects of various categories by investing a total sum of 0.81 billion USD </li></ul><ul><li>In 2004 NSF funded 26 Key Program projects, with the average funding about 0.22 million USD </li></ul><ul><li>The Division of Information Science had number of projects regarding wireless communication technologies, such as UWB, Mobile service Platforms, etc. </li></ul>8.2 NSF 8. Public R&D programs
    79. 79. source: http://www.nsfc.gov.cn/e_nsfc/2004/01au/02fs.htm 8.2 NSF 8. Public R&D programs 1 CNY = 0.123793 USD (11/05)
    80. 80. 863 Program <ul><li>The National High Technology and Development Program of China </li></ul><ul><li>Started first time in March 1986 </li></ul><ul><li>Original program was temporary, but is now continuous and covers whole country </li></ul><ul><li>6 main research sectors, including Information Technology </li></ul><ul><li>In IT sector, Wireless technology falls under the sub-branche of Communication Technology </li></ul><ul><li>Annually 3-5 major projects in each main sector </li></ul><ul><li>Single project funding are between 0.12-2.5 Million USD </li></ul><ul><li>About 80% of the projects are around 1.2M USD </li></ul><ul><li>Some projects involve foreign companies as well </li></ul><ul><li>The most important sub-program for wireless technologies is called FuTURE project </li></ul>8.3 863 8. Public R&D programs
    81. 81. The FuTURE Project <ul><li>China begun developing B3G technologies in 2001, when FuTURE project started </li></ul><ul><li>Fu ture T echnologies for U niversal R adio E nvironment </li></ul><ul><li>FuTURE is under the Communication part of the National 863 Program </li></ul><ul><li>Launched by Ministry of Science and Technology (MOST) </li></ul><ul><li>The first phase was launched for the 10 th 5-years plan (2001-2005), including FuTURE and FuTURE+ phases </li></ul>8.4 FuTURE 8. Public R&D programs
    82. 82. The FuTURE Project <ul><li>The Mission is to “establish universal radio experiment environment that can meet the application demands and technique trends headed for the years around 2010” </li></ul><ul><li>Integrates layered wireless communication systems via IPv6 core networks </li></ul><ul><li>In broadband side it focuses on Cellular Layer (B3G/4G mobile) and Areas Layer; WxAN (WLAN/WPAN/WHAN) </li></ul>8.4 FuTURE 8. Public R&D programs
    83. 83. The FuTURE Project <ul><li>The 1 st phase included vision, spectrum and technology trend evaluations (FuTURE) and Demo systems and application development and standard candidate proposals (FuTURE+) </li></ul><ul><li>2 nd Phase, FuTURE II (2005-2010) is for trial & pre-commercial systems and standardization work </li></ul>8.4 FuTURE 8. Public R&D programs
    84. 84. The FuTURE Project <ul><li>863 / Communication Subject / Wireless communication branch / FuTURE project </li></ul><ul><li>It aims at: </li></ul><ul><ul><li>meeting the trends and needs in the field of wireless telecommunications in the next 10 years </li></ul></ul><ul><ul><li>to carry out investigations on key technologies for air interface of beyond 3G/4G mobile communication system </li></ul></ul><ul><ul><li>to set up demo systems to verify the key technologies that can support future wireless services </li></ul></ul><ul><ul><li>to improve Chinas overall research capabilities in mobile communications </li></ul></ul><ul><ul><li>Enhance China’s international competitiveness during the standardization process of future beyond 3G/4G wireless communication systems </li></ul></ul>8.4 FuTURE 8. Public R&D programs
    85. 85. The FuTURE Project <ul><li>FuTURE project Coordination Committee undertakes the scientific research management and technological coordination </li></ul><ul><li>project will organize international and domestic specialists to carry out research into the B3G system, network structure, and operational demands </li></ul><ul><li>It cooperates closely with China Wireless Telecommunication Standards (CWTS) and spectrum distribution </li></ul><ul><li>Goal is to keep pace with the development of ITU </li></ul>Source: http://www.chinab3g.org/english/futureproject.htm 8.4 FuTURE 8. Public R&D programs
    86. 86. FuTURE’s working targets 8.4 FuTURE 8. Public R&D programs
    87. 87. FuTURE technology framework <ul><li>OFDM/GMC + TDMA/FDMA based multiple access </li></ul><ul><li>Distributed radio architecture for improved coverage </li></ul><ul><li>IDMA for better multiple cell frequency use </li></ul><ul><li>Add-on techniques: </li></ul><ul><ul><li>Powerful iterative receiver (turbo receiver) </li></ul></ul><ul><ul><li>Advanced Turbo/LDPC channel coding/decoding </li></ul></ul><ul><ul><li>Unified MIMO and adaptive time slot structure </li></ul></ul>8.4 FuTURE 8. Public R&D programs
    88. 88. Achievements <ul><li>Active international cooperation on research and standardization </li></ul><ul><li>Cooperation with Japan and South-Korea </li></ul><ul><li>Big number of patents from funded sub projects </li></ul><ul><li>FuTURE B3G test network in Shanghai </li></ul>8.4 FuTURE 8. Public R&D programs
    89. 89. FuTURE Forum <ul><li>Established in 2004 </li></ul><ul><li>Non-Governmental & non-profit organization </li></ul><ul><li>Jointly founded by operators, equipment providers, universities and research institutions both in China and abroad </li></ul><ul><li>Objectives: </li></ul><ul><ul><li>to clarify the vision of future mobile communication development; </li></ul></ul><ul><ul><li>to assess new trends and new technologies, and to promote the research in B3G field; </li></ul></ul><ul><ul><li>to realize the sustainable development of mobile communication through international cooperation between China and the rest of the world </li></ul></ul>Source: http://www.chinab3g.org/english/futureproject.htm 8.4 FuTURE 8. Public R&D programs
    90. 90. FuTURE Forum <ul><li>Working scopes: </li></ul><ul><ul><li>To report to governments and relevant organizations the viewpoints and suggestions proposed by Forum members; </li></ul></ul><ul><ul><li>To provide suggestions to initiate the R&D projects as well as the standardization research </li></ul></ul><ul><ul><li>To promote international cooperation between the Chinese and overseas organizations by organizing conferences and seminars </li></ul></ul><ul><ul><li>To organize research and discussion activities of the Forum members and to publish professional reports and white papers </li></ul></ul><ul><ul><li>To communicate and work with other international consortium </li></ul></ul><ul><ul><li>To sort and provide with the latest relevant information </li></ul></ul>8.4 FuTURE 8. Public R&D programs
    91. 91. Notable research institutes for wireless technology <ul><li>The Wireless Technology Innovation Institute of Beijing University of Post and Telecom (WTI of BUPT) </li></ul><ul><li>Tsinghua University in Beijing </li></ul><ul><li>South-East University in Nanjing and Xi’an JiaoTong University </li></ul><ul><li>Shanghai Wireless Communication Research Center (Wireless Core) </li></ul>8.5 Notable research institutes 8. Public R&D programs
    92. 92. Wireless Core <ul><li>Shanghai Research Center for Wireless Communications is a Non-profitable organization established in 2003 by Ministry of Science and Technology (MOST), Chinese Academy of Science (CAS) and Shanghai Municipal Government. SHRCWC annual research budget is a pprox. 3 million Euros and mainly funded by conducting research projects for government. </li></ul><ul><li>Wireless Core is focused on B3G research and is a member of the FuTURE project. Wireless Core operates the FuTURE B3G test bed in Shanghai. Research is focused on physical layer. </li></ul><ul><li>It has active cooperation with private companies and its partners include for example China Netcom, Huawei, ZTE, Nokia, Ericsson, Siemens, Motorola and key universities. </li></ul><ul><li>Wireless core has around 100 employees and the total number (including students) is around 160. About 80 of the permanent employees are researchers. </li></ul>8. Public R&D programs 8.5 Notable research institutes
    93. 93. 9. Private sector R&D activities 9.1 General 9.2 Network equipment manufacturers 9.3 Handset manufacturers
    94. 94. <ul><li>State owned companies are mainly focusing on 3G and B3G research </li></ul><ul><li>Majority of the companies still having very limited R&D resources </li></ul><ul><li>Most of the wireless technology companies buy the core technology from foreign (U.S., Taiwan) companies </li></ul><ul><li>Most prominent companies in terms of R&D include ZTE, Huawei, Datang and Putian </li></ul><ul><li>Current trend is to establish Joint Ventures with foreign companies </li></ul><ul><ul><li>Examples: T3G by Datang and Philips, JV by Huawei and Siemens ( $100 million- plus ), JV by Putian and Nokia ($111 million) , R&D lab by Nortel & Datang </li></ul></ul>9. Private sector R&D activities 9.1 General
    95. 95. <ul><li>Network equipment manufacturers: </li></ul><ul><li>ZTE: GSM, CDMA2000 3X, WCDMA, TD-SCDMA, WLAN, Wimax, PHS </li></ul><ul><li>Huawei: GSM, GPRS, CDMA, WCDMA, TD-SCDMA, WLAN, Wimax </li></ul><ul><li>Putian Capitel: CDMA2000 1X, WCDMA, TD-SCDMA </li></ul><ul><li>Datang: GSM, CDMA, TD-SCDMA, BTD-SCDMA </li></ul>9. Private sector R&D activities 9.2 Network equipment manufacturers
    96. 96. Mobile phone manufacturers <ul><li>China has granted 38 mobile phone manufacturing license </li></ul><ul><li>Private companies R&D activities vary a lot </li></ul><ul><ul><li>Tier 1 manufacturers: core technology designed in-house, heavy investments on R&D. e.g. Huawei, ZTE, Datang, Putian </li></ul></ul><ul><ul><li>Tier 2 manufacturers: up to 50% design in-house. Mostly big consumer electronic companies who have in early stage been using design houses, but nowadays investing more on own R&D. e.g. Konka, TCL, Ningbo Bird, Haier, Soutec and Kejian. Core technology still outsourced. </li></ul></ul><ul><ul><li>Tier 3 manufacturers: own R&D very limited, usually only plastic coating, etc. Buy solutions and components outside and only assembles the phones. e.g. Kejien, Telsda, taxian, Panda Mobile </li></ul></ul><ul><li>Generally speaking domestic manufacturers have too much focus on production capacity at the expense of R&D investments </li></ul>9. Private sector R&D activities 9.3 Handset manufacturers
    97. 97. 10. Foreseeable radical changes
    98. 98. Market is rapidly growing and opening <ul><li>Rapid growth of urban population: over 200 million people are estimated to move from countryside to the big cities during the next decade </li></ul><ul><li>Annual economic growth (around 10%) will continue </li></ul><ul><li>Improving living standard changes consuming habits </li></ul><ul><li>Market is opening for foreign companies </li></ul><ul><li>WTO membership is gradually forcing China to open the mobile market for foreign operators and service providers </li></ul>10. Foreseeable radical changes
    99. 99. <ul><li>3G licenses will probably be granted in 1/Q 2006 </li></ul><ul><li>The whole industry is waiting to get confirmed information </li></ul><ul><li>License decision will determine: </li></ul><ul><ul><li>Scale of TD-SCDMA adoption </li></ul></ul><ul><ul><li>WCDMA vs. CDMA2000 </li></ul></ul><ul><ul><li>Winners and losers among manufacturers </li></ul></ul>10. Foreseeable radical changes
    100. 100. Big operator reform before 3G license granting? <ul><li>In order to avoid duplicate investment in telecommunication industry, the government is now considering to reform the operators. </li></ul><ul><li>One possible plan is: </li></ul><ul><ul><li>Split China Unicom into two: GSM part and CDMA part </li></ul></ul><ul><ul><li>Split China Railcom into South part and North part </li></ul></ul><ul><ul><li>China Telecom + China Unicom GSM part + China Railcom North part = China Telecom </li></ul></ul><ul><ul><li>China Unicom CDMA part + China Netcom +China Railcom South part = China Unicom </li></ul></ul><ul><ul><li>China Mobile + China Satcom = China Mobile </li></ul></ul><ul><li>This new plan will affect the situation of China Telecommunication industry and 3G license issue. </li></ul>10. Foreseeable radical changes
    101. 101. <ul><li>Consolidation among service providers is expected to happen in near future due to changes in revenue scheme </li></ul><ul><li>New Telecom law to be released in 2006? </li></ul><ul><ul><li>will likely outline the gradual opening of VoIP services for foreign players in China </li></ul></ul><ul><ul><li>Other changes and outlines </li></ul></ul><ul><li>Domestic manufacturers to partner up more and more with foreign players </li></ul><ul><li>Government’s decisions will remain unpredictable </li></ul>Other… 10. Foreseeable radical changes
    102. 102. 11. Finnish companies possibilities in China
    103. 103. Finnish companies possibilities in China <ul><li>China’s mobile market is of huge size and still growing rapidly. At the same time the market is highly competed by domestic and foreign companies </li></ul><ul><li>More and more domestic companies are investing on R&D and manufacturing facilities in China </li></ul><ul><li>Market for bulk products and services is getting saturated -> Finnish companies need to find the niche market with high quality products. Unique content/application or innovative technology can success. </li></ul>11. Finnish companies possibilities in China
    104. 104. Huge demand of Mobile VAS market <ul><li>Booming VAS market creates huge need for premium content and innovative applications </li></ul><ul><li>Branded content and high quality games </li></ul><ul><li>Market for professionally used applications is starting to grow </li></ul><ul><li>Localization is required (language and culture)! </li></ul>11. Finnish companies possibilities in China
    105. 105. Fulfill the needs of operators <ul><li>Near future, especially the coming 3G era, will see a boom on network investments </li></ul><ul><ul><li>Both “green field” and upgrades </li></ul></ul><ul><li>Already need for reliable and effective billing, provisioning and CRM systems </li></ul><ul><li>DRM systems </li></ul><ul><li>Tools for network planning and optimizing </li></ul><ul><li>Sharing the experiences in 3G business model </li></ul>11. Finnish companies possibilities in China
    106. 106. Converging the diversified infrastructure <ul><li>Multiple standards need interoperability </li></ul><ul><li>Multimode handsets </li></ul><ul><li>Unified platforms </li></ul><ul><li>Services for different platforms </li></ul>11. Finnish companies possibilities in China
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