According to CCID, in 2006, various telecom enterprises in China successfully completed their strategic transformation. The communications industry experienced a year of harmony and change, seeing in 2006 the rise of production value, changes in competition pattern, penetration of mobile communications, and advancement of the Village Connected Project and consumers' deepening understanding of communication services.
The fast growth of China's communications industry has mainly benefited from the rapid growth of the national economy, the implementation of the strategy of using IT Applications to spur industrialization and the adoption of a series of robust and practical development policies for the industry. In addition, while deepening internal reforms, changing operational mechanisms and improving services quality, operation enterprises have also enhanced their marketing efforts to tap market potentials, innovate operation models, which effectively stimulated demand and activated the market.
In the first three quarters of 2006, nationwide fixed assets investments in communications amounted to 144.31 billion Yuan, up 17.7% year-on-year. Fixed assets investments in telecommunications amounted to 142.48 billion Yuan, up 17.7% year-on-year.
There are many factors that determine changes in such investment in China. These include enterprises' adjustment of investment structure and directions. Increased investments in communications have promoted network building and business development. Given that business revenues are slowing down at present, the action that communications enterprises increase investment not only accords with the rule of the market economy and belongs to normal structural adjustment, but also reflects that enterprises are now being more pragmatic and practical in their operations and investment.
During the same period, mobile communication revenues in China grew by 18.3%, accounting for 47.1% of the total telecom business revenue. This accounted for the steady growth of telecom business revenue. The number of mobile users in China reached 443 million, maintaining steady growth. In the same period, the number of mobile grouping data users reached 117.207 million. The percentage of the total mobile users was up to 26.4% in September from 19.10% in January. In the mobile communication field, mobile data businesses grew rapidly, accounting for 21.0% of the mobile communication business revenue. There was a negative growth in the fixed local call volume, down 2.9% year-on-year. However, mobile local call duration was up 33.6% year-on- year, showing that mobile local call services have a strong effect of substitution for fixed local services.
Percentages of fixed local call and long-distance call business revenues among the total revenue dropped by 2.49% and 1.06% respectively, while mobile communication and data communication business revenues saw a rise of 2.89% and 0.71% among the total revenue respectively. Among the fixed local call volume, percentage of wireless local calls rose to 25.7% from 24.9% year-on- year. The growth rate fell rapidly to 0.2% from 25.3% year-on-year, showing a weakening trend in its role in driving up fixed local call volume.
In the first three quarters of 2006, the number of broadband users in China grew by 11.226 million, bringing the total to 48.576 million, with the number still growing fast. Broadband users in China are expected to reach 51 million by the end of this year.
Developments in broadband services in China can be attributed to the penetration of Internet applications, the continuous drop in broadband fees rate and the persistent efforts of fixed operators. With the continuous expansion of certified equipment for WiMAX, granting of permit to frequency resources and gradual solution of the chip bottleneck problem, more and more operators have also taken part in the industrialization of WiMAX. Overall the Chinese market responded to the globally WiMAX trend actively in 2006.
Data communication revenue grew by 22.2% year-on-year, twice the growth of main telecom business revenue. In 2006, data communication made major progress in China and showed strong growth potentials among the various telecom services. As fixed operators lost their advantages in voice services, to ease business pressures, broadband was chosen as the key business for development, with more new broadband applications invested and developed.
Developments in 2006 included H.264, which gradually became the mainstream IPTV business standard in 2006, and that China's own standard AVS won strong support from China Netcom. By the end of December, IPTV users in China reached 550,000, up 106% year-on-year. Meanwhile, in an effort to change current business structure, mobile operators have further raised the percentage of data services, of which the revenue accounts for 20% of their mobile communication business revenues. In the third quarter of 2006, SMS volume reached 107.44 billion, up 35.6% year-on-year. With the continuous introduction of new applications such as mobile phone TV, mobile phone media and mobile phone advertisement, the number of mobile grouping data users are expected to grow steadily.
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Photo Xiaoxian, China by Robbie Sproule. Creative Commons License Attribution 2.0
