Convergence is on the way in China – or is it?

A recent announcement by China’s State Council sets out a clear timetable for convergence and requests comprehensive government policies and national implementation plans (including financing, administration, tax incentives and technology standardization) to support its implementation.

 

It will allow broadcasters to provide telecoms infrastructure services in addition to value-added services – the latter having been deregulated since the beginning of 2008 – and telcos to provide broadcasting content production and delivery services. Although the removal of regulatory barriers has long been discussed and is mentioned in the draft of the Telecommunications Law (which is currently being reviewed by the Chinese legislative authority), to date the barriers betweens telecoms and broadcasting have not been removed nationwide.

 

In 2009 several local regulators of broadcasting and telecoms, including Shanxi province and Hubei province, issued policies to allow existing players to move gradually into each other’s markets. However, the result has been sluggish development of services such as IPTV and mobile TV.

 

The new policies will stimulate nationwide fiber investment from both cable operators and telcos. In the meantime, they will speed up cable network digitization and network rollout. As early as 2008 the broadcasting regulator, the State Administration of Radio, Film and Television (SARFT), announced its plans for government investment to build a nationwide next-generation network (NGN).

 

The NGN, combining fixed-line and wireless networks, will provide voice, broadband and broadcasting services via a “super highway” of 1000Gbps for core transmission and 100–200Mbps for end-users – 100 times faster than current broadband speeds.

 

To strengthen multiplay services (mobile, fixed, broadband and TV) in order to compete with the NGN, telcos will increase investment to roll out their own fiber networks. The three major telecoms players already have their own fiber deployment plans, some of which are discussed in our recent report Overview of NGA development and related policies in China.

 

The Chinese cable operators face strong challenges to provide converged services. Since January 2008, broadcasting operators have been allowed to provide value-added telecoms services and broadband services.