"China Telecommunications Report Q2 2014" now available at Fast Market Research

From: Fast Market Research, Inc.
Published: Thu Mar 27 2014

The Chinese telecommunications industry is the biggest in the world in terms of existing size and growth potential, with the 1.2bn mobile subscriptions representing only a penetration rate of 87.3% at the end of September 2013. There are substantial growth opportunities in rural regions, where markets are still untapped, and the arrival of MVNO operators should catalyse competition for these lower value subscribers. Meanwhile at the other end of the market, demand for 3G and 4G services is growing rapidly, particularly in urban areas. Domestic operators are tapping this trend, and with the liberalisation of the VAS segment foreign investors can now also gain exposure. There is however downside to this bullish outlook due to the heavy investment burden in the telecoms industry, a capability that could weaken if the broader economy deteriorates.

Key Data

Full Report Details at
- http://www.fastmr.com/prod/782491_china_telecommunications_report_q2_2014.aspx?afid=302

* The latest data from operators show the mobile market continued to expand in 9M13, with total subscriptions increasing to 1.209bn at the end of September 2013.
* The decline in fixed-line subscriptions accelerated in 2013, with the total number falling 4% to a low of 267mn at YE13.
* Fixed broadband still has strong growth momentum, with total subscriptions up 7.8% in 2013 to 188.9mn at YE13.

Key Trends And Developments

Regulatory developments of great significance for the mobile market occurred in late 2013 and early 2014. The licensing of MVNOs took place in December 2013 and January 2014, a development BMI expects to catalyse subscription growth as new players target underserved rural and low income consumer groups. MVNO licenses were awarded to 19 operators, including Suzhou Snail Digital Technology, Love Strickland, Changjian Times Communications, 35 Internet, Telling and Alibaba Group.

At the high end of the market, the provision of 4G LTE licenses to China Mobile, China Telecom and China Unicom in December 2013 is of greater significance. Operators have been awaiting licenses to capitalise on demand for higher capacity wireless data services. The rapidly expanding high value market, particularly in coastal urban areas, is also a potential boom for foreign investors. In January 2014 it was widely reported that the Chinese government was planning to permit foreign investment and full foreign ownership in several telecoms VAS segments, namely app stores, call centres, domestic multi-party communication, forwarding services and home internet access providers. The government will also allow foreign investors to collectively own up to 55% of online data and dealing analysis services. Although the rules state that foreign entities need to be based in Shanghai Free Trade Zone, it is understood that this does not preclude the foreign enterprises from providing services to the entire country.

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