Telecom sector rings in changes
By Liu BaijiaUpdated: 2006-12-15 09:48
Now, they have found out it is not wise to build their own networks, with
equity investment becoming the dominant form of tapping the benefits of the
world's largest market in terms of subscribers.
China Mobile, the world's
largest mobile operator, teamed up with Vodafone; China Unicom, a smaller
competitor of China Mobile, formed a joint venture with SK Telecom from South
Korea; China Unicom, the second-largest fixed-line operator, brought Spanish
counterpart Telefonica on board as its largest strategic investor.
The
only firm left for foreign investment among the top four operators is China
Telecom, which has many large international operators pursuing it, such as
Telstra, Japan's NTT and France Telecom.
"China is a very unique market:
just like its economy, no other country has gone from having the most primitive
communication tools to the most advanced telecom system in the world in such a
short period of time," said Charles Yen, managing partner of China northern
region with Deloitte.
Yi Mingyu, a senior analyst with CCID Consulting Co
Ltd under the Ministry of Information Industry, agreed with Yen and said foreign
investors and operators must have a realistic attitude when operating in the
Chinese market.
Brightman from Deloitte said that when foreign investors
come, they must find areas where they can add value, but Chinese operators are
now already very strong and technologically is sophisticated, so the
opportunities for foreign participants to have a dominant say are
minimal.
One area in which they can offer value and attract Chinese
counterparts is their international expertise, as Chinese operators are trying
to expand to overseas markets and increase the share of value-added services for
higher profits.
That is why Vodafone, Telefonica and SK Telecom have
become strategic investors. Vodafone and Telefonica both have strong
international businesses in Europe, Asia, and Latin America, while SK Telecom
has rich experience in developing value-added services.
Brightman said
new opportunities may arise with technological breakthroughs such as the third
generation (3G) mobile communication system, which has a higher efficiency and a
faster Internet connection speed.
China is expected to issue 3G licences
very soon. What services operators bring to consumers will be the key to their
success in this business.
Areas like cost efficiency and content on a 3G
network may be something that foreign operators and investors should use to
attract Chinese operators and consumers.
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