BEIJING, March 26 /Xinhua-PRNewswire/ -- CCID Consulting Co., Ltd, China's leading research, consulting and IT outsourcing service provider, the first Chinese consulting firm listed in Hong Kong, releases its 2006-2007 Annual Report on China's Data Communications Market.
In 2006, data communications in China made big strides, demonstrating strong growth potential among the numerous telecom services available. Fixed operators lost their advantages in voice services. To ease their business pressures, operators highlighted broadband as a business area for key development and continued to open new broadband applications. Meanwhile, to change their current services structure, mobile operators further increased the percentage of data services as well as started to enter the media field and develop the fifth media.
I. Broadband is the core driving force for data communication services
In the first 3 quarters of 2006, the number of broadband users in China grew by 11.226 million, bringing the total to 48.576 million. Yet, the growth momentum was still strong. By the end of 2006, the number of broadband users in the country topped 51 million to reach 51.617 million. The main driving forces for the growth of broadband services in China mainly include the penetration of Internet applications, the continuous drop in broadband fee rates and the persistent efforts made by fixed operators.
Fig. Number of Broadband Users in China, 2002-2006:
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II. SMS is a new driving force for data communication services
In the first 3 quarters of this year, the number of mobile users in China reached 443 million, showing a momentum of continuous and stable growth. During the same period, the number of mobile grouping users reached 117.207 million. Of the total mobile users, the percentage of mobile grouping users grew to 26.4% in September from 19.10% in January. As new applications like mobile phone TV, mobile phone media and mobile phone advertising continue to be brought to the market, the number of mobile grouping users will grow steadily.
In the mobile communications field, mobile data services have been growing fast, accounting for 20% of the total revenues from mobile communications services. Among the mobile data services, SMS is the fastest growing, accounting for over 70% of the overall revenues from mobile services. In 2006Q3, SMS volume reached 107.44 billion, up by 35.6% year-on-year. Due to the huge number of mobile phone users, various mobile phone-based business models have continued to emerge. Most of the business models are realized via SMS. The most typical example is what is called the "Super Girl" economy. As SMS services continue to penetrate into various fields such as mobile advertising, there will still be plenty of room for growth ahead.
III. IPTV has become a new favorite, and operators have started trial operations
China Telecom and China Netcom have both attached high hopes to IPTV. Fixed operators have long been facing the constraints of continuously declining voice services and "lack of content". IPTV provides a new way out: it uses the rich content resources provided by TV stations and other content providers to offer users rich and personalized TV programs. What is more important is that IPTV is an integrated value-added services platform. It can not only receive TV programs but also realize interactive programs such as video IP phone, video conferencing and online games. This makes IPTV a sharp weapon for fixed operators to increase their business revenues.
Starting from 2006Q1, China Telecom used new technologies to reconstruct its ADSL networks in 18 provincial-level regions in South China and 8 provincial-level regions in North China. These provinces and municipalities include Guangdong, Shanghai, Sichuan, Zhejiang, Fuzhou, Heilongjiang and Inner Mongolia. Through reconstructing and upgrading its broadband networks, China Telecom has been able to ensure that its users enjoy high quality broadband services, such as high-speed Internet access, video conferencing, IPTV and other multimedia services. The network upgrading also lays a broadband foundation for China Telecom to develop IPTV services.
In the IPTV field, China Netcom certainly does not want to fall behind China Telecom. China Netcom started trial operations of IPTV in Harbin a long time ago. Through cooperation with SMG, China Netcom pioneered in operating large-scale IPTV services in Harbin, and offered over 7,000 hours of on demand programming. By the end of July this year, China Netcom attracted 66,000 IPTV users in Harbin and made revenues of 16.38 million Yuan.
IV. Fixed operators have sought new technologies to develop mobile data services
In 2006Q1, China Netcom tested its Wi-Fi dual mode mobile phone and passed the inspection undertaken by the Ministry of Information Industry. Since China has yet to issue 3G licenses, China Netcom and China Telecom urgently need to develop a new kind of service to fend off competition from mobile operators, and make transformations and innovations themselves. They have therefore put their sight on Wi-Fi.
The Wi-Fi dual mode mobile phone has shown great appeal abroad. This has become an important reason why it is favored by fixed network operators and equipment manufacturers. Starting from 2005, China Netcom focused on Wi-Fi and began switchover tests between the two networks. China Telecom has also long introduced a kind of service similar to Wi-Fi. Its "Wireless LAN" service is an example of fixed network operators' use of Wi-Fi technology. Users only need to install a WLAN network card on their PC or PDA to access China Telecom's broadband Internet. Fixed network operators pin their hopes on the Wi-Fi dual mode mobile phone's entry into the mobile communications field. In addition to the intervention from mobile operators, the biggest problems facing the product are immaturity of Wi-Fi technology and instability of user groups. Lack of user groups restricts the development of Wi-Fi dual mode mobile phones. Currently, users who truly need to use Wi-Fi for their wireless communications consist primarily of business people. The average ordinary consumer does not actually need Wi-Fi.
V. Mobile operators have entered the media field to "harvest eggs from other's hen"
On June 12, 2006, China Mobile acquired 19.9% of Phoenix TV's shares from Star Group Limited. According to the agreement and MOU signed between the two parties, Phoenix Satellite TV will give priority to providing its TV and entertainment resources to China Mobile.
As a new kind of media, mobile phones are now changing our lives and speeding up the integration between the telecommunications industry and the media industry. Today, people's pace of life is quickening. With the emergence of a fast food-like reading culture, mobile phones have now become one of the most important carriers for people to get news and entertainment. The huge customer group enables China Mobile to have a foundation to build up its media empire strategy. Meanwhile, it also forms the foundation for the company to cooperate with the media. However, to become involved in the media industry, the telecommunications industry still has a very long way to go. China Mobile currently has no license to operate media services. It can only operate media services through cooperation with others. For example, SMG spent a huge amount of money to buy the exclusive mobile phone digital rights from FIFA to cover the 2006 German World Cup in the China Region. Through its collaborative mobile phone TV platform with China Mobile, it sent World Cup matches to users' mobile phones.
It is widely known that competition in the 3G market will be very fierce. Relying on voice services alone is bound to put operators into a disadvantageous position. The advantage of 3G lies in the development of data services. With the government just about to issue 3G licenses, China Mobile has unveiled a strategy to build its mobile phone media empire in an effort to continue maintaining its strong position in the 3G market. China Mobile has acquired shares of Phoenix Satellite TV just to serve its media empire ambitions. Meanwhile, this is also an important measure for China Mobile to extend its industry chain. In fact, China Mobile has long been exploring the data services development model of DOCOMO and expanding its sphere of influence on the industry chain. It has directly cooperated with content providers and acted as both an operator and an SP.
About CCID Consulting
CCID Consulting Co., Ltd (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.
Based on four major competitive areas of the powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research.
