Crossroads 3G

When 3G licenses issued? Send a few?
3G telecom restructuring process and how the interaction will occur?
Where 3G market demand? How the business model?
What intellectual property will face the problem? Patent disputes will arise?
May 17, 2005 - the 37th "World Telecommunication Day." Heat gain in the global fired long earthshaking of 3G, the industry is still the most popular topic. Faces a dynamic change for the telecommunications industry is concerned, 3G is not cards, but the domino array that will be spread out in the first card.
At the crossroads of 3G, is undergoing pre-delivery pains.


Licence: Arrow in the string without hair


"Obviously, the attitude of the Government of the 3G licenses, or 'do not worry'." An R & D TD-SCDMA chip company president privately told reporters. In the April 26 meeting of the "2005 TD-SCDMA International Summit", the Ministry of Science, Development and Reform Commission, Ministry of Information Industry, the SAC and other related departments at all level, but the topic of most concern for the 3G's "license payment "were not mentioned. It seems many companies are expected to be so, so everyone seems like they are not disappointed.

"License" is undoubtedly the largest Chinese 3G drama suspense and yeast. When hair? Send a few? To whom? Projected version of the countless. Last year, once popular "Telecommunication Day 2005 release," Today has proved unfounded claims. Before the formal opening of the Government, it seems that not all who said.

Still ready to go unresolved license issue. TD-SCDMA was once considered the delay in 3G licenses issued an important reason, in the "2005 TD-SCDMA International Summit", the display of the TD-SCDMA terminals, nearly 20. 3G The third phase of testing will be completed. 3G voice more and more mature, the government seems to be no reason to "drag" down.

Came in 2005, has been issuing licenses to people linked with the telecommunications restructuring. SASAC's role is gradually being attention. "SASAC leadership has made clear that will not interfere with the standard adopted by operators." Wu Hequan Chinese works in the interview with this reporter said, the license issuance and somewhat far-fetched to link the telecommunications restructuring. But he also believes that issuing a license will consider the effectiveness of the future of telecommunications competition.

In the end there are several 3G operators are suitable? When asked if the 45 operators in the 3G will result in duplication, waste of resources, time, GSM Association, China General Manager of thunder with a smile before answering: "If from the user point of view, of course, the better competition, competitive prices to fall down. "

CATR, deputy chief engineer Yang Peifang is that 45 carriers are not necessarily the most advantageous to the user. "The telecommunications industry itself does not have sufficient competitive conditions, can only be an effective competitive market, the industry's in scale with the natural, namely the formation of a certain size, to achieve the profit and loss Pingheng point profit." He Ren Wei, Wang Luo and one with a large certainly not the cost of a small network, as if every company is small, the cost is difficult to come down, so trying to get 45 carriers reduce rates through market competition is unlikely.

Yang Peifang also pointed out that China's current mobile market duopoly competition pattern in fact would have been the result of the national macro-control. As the scale of China Unicom and China Mobile network coverage significantly better than, the cost would be higher, the price of services is higher accordingly, so if cost pricing, the market is certainly the result of competition wins China Mobile. "If the market fully open, after a survival of the fittest will certainly be quickly restored to a monopoly."

He stressed that regardless of the telecommunications market completely, drift not, ultimately requires state control, both to prevent the small number of operators as well as lack of competition, but also to prevent excessive amount of lead to excessive competition, to ensure the existence of effective competition structure.

In mid-March, China Mobile announced a substantial increase in the existing GSM network expansion investment, from the original estimate of 5.3 billion U.S. dollars budget for the upgrade to 78 million. By contrast, China Unicom in 2005 about 40 billion yuan investment, optimize network coverage. Experts believe that China Mobile and China Unicom, as the two existing mobile operators, both obvious advantages, and its current start of 2.5G, 2.75G and 3G almost the same business, their 3G licenses in no hurry. China Telecom and China Netcom are repeated on various occasions expressed the desire for mobile licenses.

Not only to domestic carriers have their own calculations, foreign operators are closely watching every move the Chinese government. NTT DoCoMo Inc. He Xianqing, deputy director of Beijing office that the great China market, foreign investors and operators are concerned, "DoCoMo very concerned about China's licenses issued by the specific time, knew early preparations can see what we can do , may have the opportunity. "

Test: "The last sprint"
In order to demonstrate the maturity of 3G, Telecom Research organized a three-stage test: the first phase of tests carried out mainly in the laboratory; the second phase of testing (last year in April to September) is largely outside the field test; s three-phase commercial trial network will be the test (until June this year), which is to start operations before the operator must have work. Can be said that the third stage is the 3G industry chain link push.

Once considered the bottleneck of 3G terminals in the year received much development. Domestic manufacturers such as Huawei, ZTE, Hisense, and Amoi have launched WCDMA terminals. Tell Laboratory Wireless Communications Bo that, WCDMA terminals both in type, function, or business, have greatly improved. But it is undeniable that the terminal is compatible with the network, the terminal is compatible with the terminal, as well as the stability of the terminal there still exist some problems. "For now, WCDMA terminals have been able to complete the circuit well within the call, that call within the circuit and short message service, as well as video telephony business. But in WCDMA video telephony interoperability between terminals still some problems. "

The development of relatively backward TD-SCDMA terminals also made significant progress. "2005TD-SCDMA International Summit" The biggest bright spot is that Datang Mobile, Huawei, DBTEL, Bird, Samsung, LG and other handset manufacturers a voice and some 3G features a live demonstration. TD-SCDMA Industry Alliance, to participate in the enterprise has increased from the beginning of the 8, 21, had adopted the attitude of many multinational companies have begun to join the Industry Alliance.

According to Datang Telecom System Integration Test Wensheng Xu, General Manager Introduction: There are 15 terminal manufacturers 20 models participated in the TD-SCDMA handsets by the end of Telecom Research Organization tests, including the four-chip manufacturers. Some foreign companies also participated in the development of TD terminals, currently concentrated in the chip area, such as Philips, Motorola, Samsung. Six basic telecommunications operators have been involved in TD-SCDMA testing.

Tell laboratory Hegui Li said in an interview, present three different problems in different technologies. For TD-SCDMA, the chip is more crucial issue, we are working hard to overcome it. WCDMA and CDMA2000, the main face may not be the chip, but the problem in the process of multimedia transmission, mobile phones and networking issues, interoperability issues.

Three different 3G technology standards, are preparing the final sprint.

Applications: "killer" Where?

"3G can do, people can not see." Some experts criticized. 3G is the most attractive high-speed data services, while mobile phone users in China the demand for this piece of content and what kind? What is attractive to 3G from 2G to allow users to transplant? Unique based on 3G business there is still no clear style.

"China has not spotted how to get 3G in China in the end there is no such need for the government is unclear." Thunder in an interview that very clear. Other experts believe that China has not yet become effective for the 3G market demand. Consumption structure of China telecommunications and developed countries is totally different, but at present stage in the problems of poverty, data communications throughout the telecommunications business income accounted for only 5.4% of revenue, the public need is voice and text messages. "China's per capita GDP was only 1,000 dollars, while in Western Europe, North America, South Korea, Japan and other countries, China's per capita GDP are higher than an order of magnitude, it is difficult to imagine such a low per capita GDP of the country and 3G mobile multimedia and other business needs to have much. "

In addition, the level of urban and rural telecommunication development gap between the large telecommunications in rural areas, the level is still relatively backward, the country did not pass on the phone compared to 9.1% of administrative villages, on average, at present China's rural telephone penetration rate is about 11%, only one-third of the city level, while the developed countries of basic telephone penetration rate above 100%. Basic universal in reach, based on the consumption of these countries should focus on data, video, games, and more value-added business change. Even so, in addition to other countries outside South Korea and Japan, 3G data services development is not very good.

Of course, there are different views. "China is not without needs of users, but did not train together. Many of us have camera phones, Internet and other functions, but not used." Serving a particular content provider, a source said. He suggested that operators should change our thinking, from the user's interests, change the "not customize the deductions" and other short-term interest from the irrational behavior. Custom cell phone operator is the future trend, terminal operators, vendors to customize certain features of the phone can support and give support in the business, it is easy to disseminate and business. NTT DoCoMo Inc. He Xianqing also said he had also tried to use the mobile Internet, but slow, not very stable. "Inexpensive mobile phone, rates drop, the network connection is fast and stable, good performance, these are the premise of user data services." He thought.

Technically speaking, 3G data services can provide a good platform. Content-based platform, then what? China has emerged at this stage quite a lot of quantitative value-added service providers, as at the end of June 2004, in a total payment of various Zengzhi telecommunications business license has more than 11,000. However, due to traffic on 2G and 3G in the difference, thunder that must be to the 3G value-added services can really develop. Air network is a content provider in China, its business product market manager for Liu Shuwen Development Department believe that although Henduoshuju Ye Wu in the present web, to provide, Dan Shi by network bandwidth, Xian Zhi, video on demand Deng pair of high rate of business Zhiyou to Yaoqiu 3G can be fully realized.

"Once the 3G launched, content providers out of the content is not difficult, existing business, you can go directly transplanted to the 3G platform, but to provide a good content is difficult. If 2G is how to spell the content to reach users channel, the contents of the coming fight is the quality and uniqueness. "Liushu Wen said in an interview. To air network, for example, now mainly pictures, ring tones, text messaging and other services, video on demand service also, but mainly used for 3G testing. He believes that data services can not be launched because of 3G, while showing explosive growth, mainly at this stage the user will be transplanted in the past.

3G charging content providers as well as new challenges. At present, China is only one channel, that is, from the two mobile operators charge the Shang Dynasty, and in charge of foreign channels that are many, such as credit card fees charged by EBay and other on-line. China's pricing mechanism, if not open, content providers can not recover the cost of providing unique content will be lost momentum. "Content homogeneous, there is no personalized service, this is the current status of competition in the market." Liu Shuwen think. He also predicted by the current flow of charges, fees collected information on earnings is sure to be replaced by content charging models. "For 3G, the network bandwidth itself is not a bottleneck."

The first quarter of 2005, the total messages sent in China has reached 67.21 billion, an increase of 39%. This figure is probably the phone has just started in China, no one can expect. The value-added service content development, the emergence of a successful business model, rules of the game, after the opening should be in the 3G market can really be. How to use our existing 2.5G, 2.75G network to promote data services, user training needs and the user must scale well for the market to prepare the arrival of 3G, operators and content providers that should be considered.

"3G is the future applications. Before the Internet came out, we do not know what the Internet application. If you ask a user, I will be on what product, how you could use it to use, the user must not tell. unless he is a genius. potential applications need to be explored. "Frost & Sullivan China, said Wang Yuquan, general manager.

Patents: the need to face the hidden dangers

Li Shihe Datang Mobile's chief scientist, said in an interview, TD-SCDMA can be technically more mature, but the business still does not work, intellectual property rights have not been resolved.
Worried about not only the patent Li Shihe. Beijing University of Posts and Information Engineering, Professor, Lee Road, the said companies on patent issues before the performance is very sad. "I went to England to meet the United Kingdom, said China is the 'cloning' superpowers, such as DVD. China's mobile phone market is now the largest in the world one in every three phones is the Chinese people, but they have to pay How much royalty ah! "

Called the Chinese standard TD-SCDMA, but the Telecommunications Research Institute under the Ministry of Information Industry in 2003 statistical report, the TD-SCDMA patent distribution is 32% of Nokia, Ericsson 23% Siemens 11%, Datang only 7%.

Not currently commercial TD-SCDMA, has not yet surfaced on the patent dispute. Once the formal business, patent disputes will be highlighted. In the commercial front, the patents deal with the problem clearly, can reduce future problems.

The reason why China to develop China's 3G standard TD-SCDMA, is to avoid repeating the 2G on to foreign companies to pay huge royalties in the past. However, if the TD-SCDMA patent issues do not deal with, lay hidden dangers for the future development.

National Development and Reform Commission Zhang Xiaoqiang, director of the TD-SCDMA Summit, said the issue of intellectual property must have aroused attention, some businesses or interest groups with monopolistic advantages of technology, set unfair conditions, charging unreasonably high cost of access to excess monopoly profits, which actually impede innovation and development of technology, protection of intellectual property rights against the original purpose of promoting scientific and technological progress. The summit in two days before the Ministry of Information Industry Xi Guohua, vice minister of the Boao Forum for Asia in Hainan, also said that some multinational companies from charging excessive costs of intellectual property rights, which would create a monopoly, is not conducive to the development of the industry.

Business Model: 3G how to make money?


"I attended a council in the UK, directors everyone has a 3G phone. I asked them not to use, they said gave me, these 3G phones as others gave them, they do not buy. I stayed in the UK a very long time, people rarely 3G phone. "Lee Road this talk about 3G in the UK, said the application of state, he said, did not understand why the 3G-known in China, so ring.

To October 1, 2001 NTT DoCoMo launched 3G in Japan business signs, 3G is gradually extended to the world. However, in the past four years, 3G business development is not easy. Until 2004, it achieved rapid global 3G development. To NTT DoCoMo's case, as of September 2003, it is less than one million 3G users, but this year the figure reached 11 million, using 3G mobile phone users all mobile phone users in the proportion of the more to larger firms, according to NTT DoCoMo Inc., deputy director of Beijing He Xianqing estimated end of this year, 3G subscribers in Japan may be more than 2G users.

According to publicly available data, as of February 2005, there were already 64 WCDMA and 18 CDMA20001x EV-DO commercial networks in operation. In 3G applications, as of December 2004, the global 3G users (including CDMA2000 users) has reached 159 million, accounting for the total number of mobile subscribers to 9.3%, the industry agreed that the development of the situation getting better 3G. However, 3G has experienced in the development of the global market into a long period, not very mature yet profitable.

Thunder that open markets abroad, is worth our study. "Abroad to promote the development of market forces, companies are private, by the shareholders to decide whether to invest in a project, cast the wrong result in their loss, if loss of the 3G business, the company responsible to shareholders. The Chinese carriers are state assets, it is difficult to decide, where to vote the money in the end. "thunder, but also put forward, not blind to the experiences learned to take a comprehensive approach, from the creation of the content value-added services and business models, because each country different national conditions, China can not copy foreign, can only reference.

"China's national conditions and the user base and the Japanese are not the same, hard to say what Japan can learn from the experience," He Xianqing said in an interview. "While mobile multi-media business development in Japan was quite good, but before and Japan launched 3G mobile phone users to use more Internet business has a relationship with the Japanese major subway and bus travel in China is also the main board." He also pointed out that Chinese mobile phone users are using this business to more junior SMS-based value-added business, China should consider the combination of national circumstances, development of rich and attractive value-added services, training for the 3G business user market.

"The biggest lesson is that foreign countries engaged in anti-profit model, and trying to serve a small number of high-class, with a high price to make more money." Yang Peifang told reporters. "Singapore's CDMA is a precedent. Service in high-end, with so few customers to support such a large network, the end definitely not do." He pointed out that China Unicom's CDMA Fazhanchuqi also taken this route, had to change the strategy in practice . One-time cost of the telecommunications industry is high, but the network once built, whether or not phone calls, the cost is the same, adding a multi-user, the cost does not increase, the marginal cost is almost zero. Therefore, the larger the lower the cost. Telecom should be based on the general public, to seize the general user market, both rich and poor service, this is the road to profitability.







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