3G Wireless Will Reshape China's Telecom Landscape, New Report Finds
October 13 2005 - 4:07PM
PR Newswire (US)
Capex increases and carrier realignment are likely once China's
government awards licenses to offer 3G services, says new report
issued by Heavy Reading NEW YORK, Oct. 13 /PRNewswire/ -- China's
telecom services market will undergo dramatic changes over the next
three years, once the national government awards licenses to offer
third-generation (3G) wireless services -- changes that will
include a short-term increase in capital spending and probable
carrier consolidation, according to a new report released today by
Heavy Reading (http://www.heavyreading.com/), Light Reading Inc.'s
market research division. Telecom in China: Carrier Capex Trends
delivers a thorough analysis of China's telecom services market by
examining technology and service deployments and capital
expenditure data for China's largest incumbent and competitive
carriers. The report, created by a team of independent analysts
within China, presents hard data on subscribers, service revenues,
and capex for China's major carriers and analyzes service rollout
plans to determine which network technologies are most likely to
attract the carrier capex in the months and years ahead. China's
largest network operators will make significant shifts in their
capex plans as they ramp up for the next phase of network
modernization, according to the report. These shifts in capex will
have significant ramifications for telecom technology suppliers
worldwide as they look to establish themselves in the world's
largest national telecom market. "Western telecom equipment vendors
are scrambling to line up local partners in China to have their 3G
play in place as soon as licenses are awarded," notes Dennis
Mendyk, Managing Director of Heavy Reading. "China's delay in
announcing the 3G winners has helped some Western vendors by buying
them a little more time to pull deals together." Nokia (NYSE:NOK)
is the latest Western vendor to announce a partnership with a
domestic 3G manufacturer in China, joining incumbent suppliers
Nortel Networks (NYSE/Toronto: NT), Alcatel (NYSE: ALA; Paris:
CGEP.PA), Ericsson (NASDAQ:ERICY), and Siemens (NYSE: SI;
Frankfurt: SIE) in the China 3G partnership race. China's big
telecom carriers have curtailed capital expenditures over the past
two years, partly in anticipation of the spending spree that will
come when 3G licenses are awarded, according to the new report. And
at least one of China's top four top network operators is likely to
be shut out of the 3G licensing contest, prompting a carrier
realignment that could result in the breakup of one of those
operators, the report concludes. Other key findings from Telecom in
China: Carrier Capex Trends include the following: 3G is critical
to China's telecom carriers, because despite healthy subscriber
growth rates, China's network operators are facing flat or
declining revenues due to intense price competition. Average
revenue per user (ARPU) has declined significantly since 2003, due
not only to competition among wireless operators, but also to
personal handyphone system (PHS) subscribers being signed up by
fixed-line service providers. The immediate future for 3G licensing
remains unclear. All of China's major operators are pursuing 3G
licenses, but the timing of their issuance by the national
government remains unclear. Recent reports suggest that 3G licenses
may not be awarded until sometime in 2006. China's network
operators expect capex to grow in 2007. This year's decline is
expected to level off in 2006, as carriers being spending on 3G
network buildouts. The combination of 3G buildout and final
preparations for the Beijing Olympics is expected to increase capex
by about 5 percent in 2007. Telecom in China: Carrier Capex Trends,
a 49-page report, costs $3,495 and is published in PDF format. The
price includes an enterprise license covering all of the employees
at the purchaser's company. For more information, or to request a
free executive summary, contact: Dave Williams Sales Director,
Heavy Reading 858-485-8870 Press/analyst contact: Dennis Mendyk
Managing Director, Heavy Reading 201-587-2154 About Heavy Reading
Heavy Reading is an independent market research organization
offering quantitative analysis of telecom technology to service
providers, vendors, and investors. Its mandate is to provide the
comprehensive competitive analysis needed today for the deployment
of profitable networks based on next-generation hardware and
software. DATASOURCE: Heavy Reading CONTACT: Dave Williams, Sales
Director, Heavy Reading, +1-858-485-8870, ; Press, analyst contact
- Dennis Mendyk, Managing Director, Heavy Reading, +1-201-587-2154,
Web site: http://www.heavyreading.com/
Copyright