The new China United Communications Corp. (China Unicom) and China Telecommunications Corp. (China Telecom) will focus their businesses on broadband Internet and fixed mobile convergence (FMC) to take on China Mobile Communications Corp. (China Mobile), an industry official told Interfax on Oct. 30

"With the construction of FTTx (Fiber to the x) networks and the development of integrated fixed-line and mobile services, the new China Unicom and China Telecom will be competitive among other operators," Tang Xiongyan, a top engineer from former China Netcom Group Broadband Service Applications Co. Ltd., said.

Before the restructuring of China's six big telecom operators, China Mobile dominated the industry. In 2007, it generated 47.5 percent of total telecom revenues, according to Tang. Since the restructuring, however, China Telecom and China Unicom have taken a bigger piece of the pie, benefiting from the rapid growth of broadband Internet in China.

China Telecom and China Unicom made 59.2 percent and 32.2 percent respectively of the total broadband access revenues in 2008, Tang said.

China had 90.7 million broadband users in January 2007, and 162 million users in January 2008. As of July 2008, that number had grown to 214 million.

"China's fixed-line broadband market, in which China Telecom and China Unicom have become leaders, will continue to grow," Tang said. "In addition, a market for mobile broadband has started to emerge."
About 73.11 million mobile phone users now use mobile Internet, Tang said. The introduction of 3G technologies will hasten the development of mobile Internet, allowing operators to offer various new data services, such as mobile SNS (Social Networking Service), gaming, bill payment and location-based services.

"Of the 3G technologies, WCDMA, favored by China Unicom, is the most mature. China Unicom will benefit from the whole WCDMA eco-system. It will have more choices of equipment and handsets and more developed technology. This means a better network, lower costs and more mobile phones for users to chose from," Tang said.

China Telecom and China Unicom also have the advantage in FMC, Tang said. China Mobile still makes most of its money, about 95 percent, from mobile phone communication. In 2007, fixed-line and broadband services accounted for 2.8 percent and 2.1 percent of its revenue respectively.

FMC allows operators to provide different combinations of wireless, fixed-line, broadband and video services to customers.

Source: INTERFAX-CHINA