Wireless Broadband China Leinonen

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Published on October 12, 2007

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Slide1:  for GIGA Technology Program Mikael Leinonen, Finpro Hong Kong Wireless Broadband in China November 30, 2005 Table of Content:  Table of Content Introduction Market overview Business volume Network Operators Services VAS Figures SMS & MMS Ring Back Tones M-Commerce Games Other services Biggest Service Providers Revenue sharing model Currently used Broadband technologies 2.5G EDGE Wireless Local Loop SCDMA The Cuntong Project WLAN 3G General Lisence issue TD-SCDMA 3G testing HSDPA Other future technologies Wimax WRAN DVB-H Beyond 3G, 4G Policy making and public sector’s role CATR Standard Association CJK Standards meeting Public R&D programs General NFS 863 FuTURE Notable research institutes Private sector R&D activities General Network equipment manufacturers Handset manufacturers Foreseeable radical changes Finnish Companies’ possibilities in China Slide3:  1. Introduction Slide4:  This report has been written for the GIGA program of Tekes, focusing on converging networks. The report provides information on the China wireless broadband markets. This report discusses the following issues Overview of the China wireless broadband market Competitive environment Technology adoption and outlook Available services Government’s role in the development of the wireless broadband Public & Private R&D activities for wireless broadband technologies Opportunities for Finnish companies 1. Introduction China in a Nutshell:  China in a Nutshell 1. Introduction Slide6:  2. Market Overview 2.1 Business Volume 2.2 Network operators General market information:  General market information Telecom revenue reached USD 63 bln in 2004 Mobile communications revenue: USD 27 bln 13.2% increase from 2003 ~43% of total telecom revenue Number of mobile phone users was 340 million by the End of 2004 ~25.9% user penetration by the end of 2004 Mobile penetration is estimated to double itself by 2010 2. Market Overview 2.1 General market information Market share: fixed vs. mobile:  Market share: fixed vs. mobile Number of mobile phone users surpassed the number of fixed line users at June 2004 Pure mobile operator China Mobile is the biggest in market share by revenue and subscribers Two fixed line operators Telecom and Netcom are now achieving more market share with “quasi” mobile PHS service 2. Market Overview 2.1 General market information Number of mobile users per technology:  Number of mobile users per technology Mobile Users (Millions) per Operator & Technology 4Q/2004 2. Market Overview 2.1 General market information Mobile subscribers:  Mobile subscribers Source: Ministry of Information Industry 2. Market Overview 2.1 General market information Geographically diversified penetration:  Geographically diversified penetration Penetration rate only ~25.9% (2004) Mobile phone density differs a lot in different areas. Wealthy East-coast is leading in subscriber numbers Comparison of new mobile subscribers in East-, Central- and Western China; 1/H 2003, 1/H 2004 and 1/H 2005 (Y-axis: subscribers 10.000 ). 2. Market Overview 2.1 General market information New mobile users are mainly post paid customers:  New mobile users are mainly post paid customers In 2004 ~90% of the new mobile phone users were prepaid customers This has caused the decrease in operators’ ARPU Comparison of Fixed Line and Mobile communication ARPU in 2003-2005 (Monthly ARPU, RMB) [1 CNY = 0.123793 USD (11/05) ] 2. Market Overview 2.1 General market information Mobile Operators:  Mobile Operators 2. Market Overview 2.1 General market information Mobile data revenues, 1Q 05 vs. 2Q 05 China Mobile and China Unicom:  Mobile data revenues, 1Q 05 vs. 2Q 05 China Mobile and China Unicom 2005 1/Q 2005 2/Q Yearly change (%) Source: Informa, Mobile Media Analyst, Oct 05 2. Market Overview 2.1 General market information Handset market:  Handset market 2004: 73 million handsets sold 2005 (E): 88 million handsets sold (by CCID) Over 1000 handset models in market Nokia, Motorola, Samsung and Bird are leading the market Domestic manufactures have less than 45% of the total market 2. Market Overview 2.1 General market information China Mobile:  China Mobile CM has the right to use a total of 34 MHz of spectrum, for transmission and reception, respectively, in the 900 MHz frequency band and the 1800 MHz frequency band in Mainland China. Source: China Mobile 2. Market Overview 2.2 Network Operators Slide17:  China Mobile insight: July 04 – March 05 Source: China Mobile 2. Market Overview 2.2 Network Operators China Unicom:  China Unicom The only operator in China to run two different networks of GSM and CDMA Testing on CDMA EV-DO & CDMA EV-DV as 3G (Tianjin and Shanghai has built EV-DO trail network) Speculation that China Unicom can be split up two Uni-Info, branded WAP portal. Established UNISK Information Technology (together with SK Telecom) to engage in wireless value added service business Uni-Java (developed with Qualcomm) and Brew are two application platforms for China Unicom 2. Market Overview 2.2 Network Operators China Unicom: strategies:  China Unicom: strategies Boosted CDMA users thru calling discount, handset subsidy & prepaid service. It CDMA targets more to Hi- & Mid-End users & business customers “World Wind”, a branded service of dual-mode phone services enables users to transfer between GSM and CDMA network automatically Placing increasing attention to mobile applications as service differentiation eg: Mobile Wallet 2. Market Overview 2.2 Network Operators Fixed line operators:  Fixed line operators China Telecom Overview One of the biggest operators in China market (No.2 for revenue). Focus on fixed line, broadband service, etc. Its main business area is southern parts of China China have 65.2 million Wireless Local Loop (WLL) user at the end of 2004, China Telecom occupies 60% WLL market Plan to obtain 3G license in the future China Netcom Overview Third largest operators in China. Focus on fixed line, broadband service, WLL, etc Main business area are north part of China Occupy 40% WLL market share Official partner of 2008 Olympic Games 2. Market Overview 2.2 Network Operators Fixed line operators:  Fixed line operators China Railcom Its focus on fixed line, broadband service, etc. Its network cover whole country Launched GSM-R trial network in 2004 Testing 3G China Satcom Established in 2001, focus on satellite communication. It devotes to develop satellite communication, broadcasting and related business Testing 3G 2. Market Overview 2.2 Network Operators Service fees:  Service fees 2. Market Overview 2.2 Network Operators Slide23:  3. Services 3.1 VAS figures 3.2 SMS & MMS 3.3 Ring Back Tones 3.4 M-Commerce 3.5 Games 3.6 Biggest Service Providers 3.7 Revenue Sharing model 3.6 Other services Slide24:  Data services account roughly about 10% of operators’ revenue Over 1000 Service Providers offering mobile VAS Total market value of mobile VAS exceed 2 billion Euro in 2003 VAS Market information at Q4 of 2004 WAP user reach 14.9 million, revenue 104 million Euro Java and Brew games are smoothly increasing, revenues are 2.5 million and 1 million Euro IVR market revenue 24.5 Euro CRBT increase fast, user reach 22 million, expect to reach 60 million in 2005, revenue 33.6 million Euros 3. Services 3.1 VAS figures Slide25:  SMS: 217 bln SMS sent in 2004, 2.69 bln USD of total revenue 57% of SMS are for chat & games, followed by ringtones, pictures, news, financial info, CM’s top 5 SPs capture 57% revenue from WAP SMS. Revenue from SMS is leveling off MMS: Both operators started MMS with branded content. Color messaging by CM Color E by CU – MMS, IMAP (emails), LBS Number of MMS users reached 6.98 million, revenue 31.1 million USD MMS is billed at USD 0.096 each (SMS is USD 0.012 each.) Users also need to pay for MMS content downloaded from Internet portals. 3. Services 3.2 SMS & MMS Ring back tone – the next big hit?:  Ring back tone – the next big hit? Color Ring Back tones: CM’s “Color Ring”, ringback tone provided by WiseSpot’s WiseRing personalized VAS platform built on NMS Communications technology. CU’s ringtone@Yamaha offers a vast choice of different melodies for handset ringers. Special effect ringtones account 40% of downloads. Avg price: USD 0.25/download, USD 0.8/month fee 3. Services 3.3 Ring Back Tone Slide27:  M-Commerce: CM’s Handset Purse Through SMS, IVR, WAP subscribers operate on bank accounts to purchase, transfer a/c, inquiry balance by SMS Will expand to shopping, a/c transfer, online payment, security deal, etc. CU’s Mobile Wallet Service Cooperation with China Construction Bank Online payment, money transfer via mobile phone 3. Services 3.4 M-Commerce Slide28:  Mobile Games: China is 2nd largest market in APAC. Role play & action games most popular. Mobile gaming market topped USD $98 million, 150% growth from 2003 Estimation for 2005: $177,5 million Currently, majority of revenue comes from offline mobile games Increasing Java and Brew support in mobile handsets is boosting the game market Mobile games are mostly from Japan & Korea, few Finnish already in market Price: 0.5-1 USD/download Java Game 3. Services 3.5 Games Slide29:  Mobile email service has not yet been launched in China Market of the vertical market applications (professional use) is still in initials Location Based Services have certain restrictions Use of VoIP has been banned by China Telecom 3. Services 3.6 Other services Slide30:  Top 5 SP of Games SMS Mobile Games Linktone, Sina, Sohu, Tom, Mtone, Any8, Tencent WAP Mobile Games Kongzhong, Nihon, Shenzhen Xuntian, Mobile NAVI, NewPalm Java Mobile Games Kongzhong, Shanda’s Digital Red, Magus, 5wan.com, BJ Mig Top 5 SP of SMS Tencent Sina TOM Linktone Sohu Top 5 Sp of IVR TOM Mtone Linktone Sina Tencent Top 5 SP of WAP (China Mobile) Kongzhong TOM Nihon Enterprise GoodFeel (Sohu) Xuntian 3. Services 3.7 Biggest Service Providers Top Service Providers in 2004 Example of mobile VAS Service Provider – Hurray! Group:  Example of mobile VAS Service Provider – Hurray! Group Hurray! Holding Co., Ltd. (Nasdaq: HRAY - News), is one of the leading providers of advanced wireless value-added services and mobile telecommunication network software in the People's Republic of China Financial results for the second quarter ended June 30, 2005: Total revenues: $15.0 million, growth of 25.1% year-over-year 2.5G services revenues: $8.8 million, growth of 21.7% year-over-year 2G services revenues: $4.6 million, growth of 28.7% year-over-year Software and system integration services revenues: $1.6 million, growth of 34.1% year-over- year Net income: $5.0 million, growth of 16.0% year-over-year In 2/Q 2005 short-term weakness in the 2.5G market due to WAP billing policy changes by China Mobile and slow CDMA user growth experienced by China Unicom Source: Hurray! Holding Co., Ltd. 3. Services 3.7 Biggest Service Providers Slide32:  General revenue sharing model: Revenue sharing model depends on nature of cooperation between operator and SP, SPs and CPs Revenue sharing model is typically 15-20(operator):80-85(service provider) Normally revenue sharing model between SP and CP is 50:50, some times depend on negotiation Recent changes in the model China Mobile plans to use 3 different revenue share models with SPs in the future 15:85 SPs will be responsible marketing 30:70 Operator will cooperate with SP for marketing for some good service 50:50 Operator will be responsible for Sales, marketing and support Operators are gaining greater control over SPs Good for some small SPs if they have attracting services and applications. Operator will help them to do marketing. 3. Services 3.8 Revenue sharing model Slide33:  4. Currently used technologies 4.1 2.5G 4.3 Wireless Local Loop 4.4 SCDMA 4.2 EDGE 4.5 The Cuntong Project 4.6 WLAN 2.5G as mobile broadband:  2.5G as mobile broadband GPRS China Mobile started in 2002 Covers 160 biggest cities (roaming in 73 countries) Speed around 40 Kbps CDMA2000 1X China Unicom started at late 2003 8.711 million subscribers in 2004 Speed around 50-90 kbps Wireless Local Loop access service Fixed line operators China Telecom and China Netcom started at 1997, became very popular after 2002 Internet connection with (theoretical) 32/64 Kbps (minimal use) 4. Currently used technologies 4.1 2.5G China Mobile GPRS data card:  China Mobile GPRS data card Starting on July 2004 China Mobile subscribers have had opportunity to use GPRS data adapter for laptop internet access Service is called “Moving Wing” China Mobile provides the service with Legend’s data card Available in 160 cities Mainly in business use 4. Currently used technologies 4.1 2.5G EDGE:  EDGE China Mobile is deploying EDGE in some selected areas, to better compete with the high data rates of China Unicom’s CDMA2000 1x network China Mobile Guangdong branch has newly launched EDGE network in Guangdong province, servicing more than 18 million potential customers in cities throughout the Guangdong province. Service is available with Sierra Wireless AirCard 775 wireless wide area network card 4. Currently used technologies 4.2 EDGE Wireless Local Loop:  Wireless Local Loop Two fixed line operators China Telecom & China Netcom are operating “quasi” mobile Wireless Local Loop (WLL) service It offers limited mobility within one metropolitan area The cheap price of WLL service has created price war and is decreasing mobile operators’ (CM & CU) ARPU There are two main technologies used for WLL: PHS, known as LittleSmart (or Xiao Ling Tong) SCDMA, known as Village Wireless Communication (or Da Ling Tong) PHS is mainly used for cities and SCDMA for rural areas SCDMA is gaining market share from PHS August 2005: over 81 million WLL users (55.50 mln as of the end of June 2004) Estimated to reach 100 million users by the end of 2005 PHS Internet access (32/64Kbps) costs about USD 15 cents an hour Average PHS handset price of USD 60 LittleSmart also offers some simple mobile VAS and Internet access with the speed of 64 Kbps WLL users are mainly low-end customers and use for internet access is minimal However, industry experts believe that China Netcom and China Telecom can gradually shift their large WLL customer base into 3G, so it might have heavy impact on the coming 3G competition 4. Currently used technologies 4.3 Wireless Local Loop Slide38:  SCDMA, or Synchronous Code Division Multiple Access, is a Chinese home-grown wireless access technology The main developer is Beijing Xinwei Telecom Technology, in cooperation with Datang, Putian Lingyun, TCL, Amoi, Skyworth, Zhenhua, Konka, Hisense, Lenovo, Jinpeng, etc. SCDMA Alliance between domestic manufacturers was established in August 2004 (MII) has designated the 23 megahertz frequency specially for the system Currently the technology is deployed in 106 cities of 16 provinces across China Currently SCDMA WLL (wireless local loop) networks have no broadband service, but the next evolution version of SCDMA will have a possibility to offer wireless broadband access Government has formed a high-level working group to investigate SCDMA possibilities as an choice for wireless broadband access 4. Currently used technologies 4.4 SCDMA SCDMA The Cuntong project :  The Cuntong project MII launched the "Cuntong" project in 2004 Project aims to speed up telecommunications availability in central and western China and rural areas to ensure balanced development The Chinese government is aiming to connect 95 per cent of villages to universal telecom services by the end of 2005 The country's six major telecom operators are all participating in the program Total of 628,000 villages have been connected so far, with 9,357 newly-connected last year still more than 50,000 villages in China which remain unconnected Teledensity in the rural areas is only 13 percent (compared to the whole China average of 23.7%) SCDMA is being adopted by major telecom operators realizing the Cuntong project Cuntong project gives SCDMA great market prospects 4. Currently used technolgies 4.5 The Cuntong Project WLAN:  WLAN Started in 2001, Large-scale deployment in 2002 by China Telecom, Netcom and China Mobile Equipment market size about $54 million in 2004 Estimated to reach $160 million by 2008 (In-Stat: China's WLAN Market Analysis and Forecast 2003-2008) By the end of 2004, there were about 1,800 hotspots in China Mainly in upscale hotels, business centers and media organizations and other public venues There are about 120,000 registered WLAN customers About 80% are individual users 20% business users According to some estimations, the user penetration in urban areas is below 5% Market is still in beginning, but expected to boom in next 5 years Some private companies use wireless LANs, but universities are still the biggest user group Only few domestic vendors. Biggest equipment developers are ZTE and Huawei, with joint research with some universities (SZPKU, Tsinghua Uni, South-East Uni) 4. Currently used technologies 4.6 WLAN WLAN:  WLAN China has developed own WLAN standard (came to effect in Dec 2003) Standard is called GB15629.11-2003 similar to IEEE 802.11, but uses different security protocol WAPI (WLAN Authentication and Privacy Infrastructure) Original deadline for vendors to sell only WAPI based equipments was June 2004 To support WAPI, Foreign companies would need to co-product their equipments with Chinese manufacturers Due to strong opposition from foreign countries (especially USA), China announced to delay WAPI requirements in April 2004 WAPI is still unlikely to completely disappear, since number of manufacturers have already licensed it 4. Currently used technologies 4.6 WLAN Slide42:  5. Third Generation mobile 5.1 General 5.2 License issue 5.3 TD-SCDMA 5.4 3G testing 5.5 HSDPA 3G:  3G China has not yet adopted 3G 3G license decision is still open Licenses are estimated to be granted during the 1/H of 2006 Final decisions on 3G licenses are to be made in very high political level; probably above the telecom regulator Ministry of Information Industry (MII) Possibly all 3 standards will be adopted 5. Third Generation Mobile 5.1 General Slide44:  Government is revealing very limited information about licenses in beforehand Currently there is no official & reliable information available about the timetable or operator requirements MII has already run several 3G tests to compare different technologies 5. Third Generation Mobile 5.1 General Slide45:  China has developed her own 3G standard, TD-SCDMA (see chapter 5.3) A total of 155 MHz spectrum has been scheduled for TD-SCDMA Country is big enough to support own standard. Goal is to keep the invested money (infrastructure, R&D) in China. Mainly due to political reasons country will most likely also adopt CDMA2000 and WCDMA 5. Third Generation Mobile 5.1 General 3G licenses:  3G licenses There will be no license auction China Mobile favors WCDMA China Unicom is already testing CDMA2000 EV-DV and EV-DO Fixed line operators China Telecom and China Netcom are also likely to get 3G license Smaller fixed line operators China Satcom and China Railcom will also get the license? Lot of guesswork about licenses, whole industry is waiting WTO membership should open doors for foreign operators, but that will take time 5. Third Generation Mobile 5.2 License issue TD-SCDMA development:  TD-SCDMA development Datang Telecommunication technology (former China Academy of Telecommunication Technology) is the most active TD-SCDMA developer The biggest manufacturers have formed number of Joint Ventures for TD-SCDMA R&D The Chinese Government has already invested more than 1 billion (US$123.3 million) in the research and development (R&D) of TD-SCDMA Domestic companies have got heavy public subsidies for TD-SCDMA development TD-SCDMA developer pool 5. Third Generation Mobile 5.3 TD-SCDMA TD-SCDMA:  TD-SCDMA ITU standard, belongs to 3GPP TDD technology, fully compatible with GSM and GPRS Easy to upgrade from existing infrastructure Efficient use of spectrum Effective data transmission. Asynchronous uplink – downlink, suitable for Internet traffic Use of Smart Antenna technology Good mobility: > 120 km/h Large cells, with diameter up to 40 km Standard development far behind rivals. Standard is very immature, no commercial use so far No large scale support from industry. Only few TD-SCDMA chips available Lack of equipments and handsets. No mass production. No uniform platform for applications -> No application developer “pool” Some unsolved technical problems: Cell interference large cell area functions high speed mobility poor stability of existing IC’s Power consumption of handsets Pros: Cons: 5. Third Generation Mobile 5.3 TD-SCDMA TD-SCDMA forum:  TD-SCDMA forum Industry consortium devoted to develop and support TD-SCDMA technology Established in Dec/2000 by China Mobile, China Telecom, China Unicom, Datang, Huawei, Motorola, Nortel and Siemens More than 420 members 16 Board Members 18 Senior Members 390 ordinary members 5. Third Generation Mobile 5.3 TD-SCDMA TD-SCDMA Industry Alliance:  TD-SCDMA Industry Alliance Formed in October 2002 by: Datang Telecom Technology and Industry Group), Guangzhou Soutec (Group) Technology Co., Ltd., Holley Group Co., Ltd., Huawei Technologies Co. Ltd., Legend (Beijing) Ltd., ZTE Corporation, China Electronics Corporation, and China Pu Tian Corporation Now 21 members, including: UTStarcom, Alcatel Shanghai Bell, Hubei Zhongyou Technology Industry & Commerce Co., Ltd., Shanghai DBTEL, Beijing Envada Electric Power Engineering Technology Co., Ltd., Tongyu Communication Equipment Co., Ltd. and Beijing Zhong Chuang Telecom Test Co., Ltd. Main goals are: to highly promote the TD-SCDMA industrialization process to integrate and coordinate the industry resources to lead the enterprises successfully into the third generation mobile communication market Source: http://www.tdscdma-alliance.org 5. Third Generation Mobile 5.3 TD-SCDMA 3G testing:  3G testing China Academy of Telecom Research (CATR) is running the 3G testing 3G test has been ran in two phases: 1) Laboratory testing in CATR test lab and 2) field test with all 6 national telecom operators CATR 3G test laboratory in Beijing is called MTnet. All the field tests have been conducted and ran by CATR under the name of MTnet. MII has Invested almost 25 Million USD on CATR testing facilities First test (phase I & II, Core network and RAN) with all 3 standards was ran at 2001/6 to 2003/8 Results showed that TD-SCDMA was still too immature for commercial use Initial tests for WCDMA and CDMA2000 have been conducted already several years earlier The special test for TD-SCDMA was arranged during May and June 2005 and completed successfully. More than 20 models of user terminals have gone through the test and results showed TD-SCDMA to be ready for commercialization TD-SCDMA application level testing is still on-going in MTnet. 5. Third Generation Mobile 5.4 3G Testing Operators’ TD-SCDMA trial networks under the MTnet:  Operators’ TD-SCDMA trial networks under the MTnet Problems with terminals, high-speed mobility and cell interference Only one terminal (by Datang) was available for the phase1 field test 5. Third Generation Mobile 5.4 3G Testing Slide53:  Operators’ WCDMA trial networks under the MTnet with network supplier information 5. Third Generation Mobile 5.4 3G Testing Slide54:  Operators’ CDMA2000 (EV-DO) trial networks under the MTnet with network supplier information 5. Third Generation Mobile 5.4 3G Testing 3.5G:  3.5G Since China has been delaying 3G licenses so long, there will already be commercial HSDPA solutions available by the time Chinese operators start to build up their 3G networks Operators will have change to jump directly to HSDPA in some selected areas Huawei and ZTE have announced to launch commercial HSDPA solution in 2006 NEC and Samsung will launch HSDPA handsets early 2006 China Mobile will conduct HSDPA trials in Beijing in Dec 2005 with various vendors Datang Mobile has announced to launch a single carrier HSDPA solution for TD-SCDMA in the 1/Q 2006 Datang Mobile has partnered up with Alcatel Shanghai Bell to develop HSDPA solutions for TD-SCDMA TD-Tech (Siemens—Huawei JV) has plans to launch commercial TD-SCDMA/HSDPA products in the 1/Q 2006 T3G Technology (Datang-Phillips JV) will release the TD-SCDMA/HSDPA chipset and system solution (single carrier, data support up to 2.8Mbps) in the 2/Q 2006 5. Third Generation Mobile 5.5 HSDPA Slide56:  6. Other future technologies 6.1 Wimax 6.2 WRAN 6.3 DVB-H 6.4 Beyond 3G & 4G Wimax:  Wimax Wimax has lot of potential in China, since the fixed line network penetration is still rather small Government sees 3G and Wimax as complementary technologies and they have different demand on market. However, so far there is no clear action from government about Wimax Biggest Chinese networks equipment manufacturers, ZTE and Huawei, are both very active on Wimax Other active Wimax players in China are Intel and Alcatel Shanghai Belling Many of the current research projects are focused on the interoperability of WLAN and Wimax As a result from TD-SCDMA project and FuTURE project, there will be a need for a Chinese version of Wimax. Some research institutes and companies (such as Wireless Core, ZTE, Huawei) already have activities about this. Research for “Chinese Wimax” has just started recently and government has not yet given any official deadlines for forming the standard. Government is forming the responsible body to run the research 6.1 Wimax 6. Other future technologies Slide58:  The Wireless Technology Innovation Institute of Beijing University of Post and Telecommunication (WTI-BUPT) is one of the most active research institutes studying Wimax in China WTI-BUPT has WiMAX Partnership Agreement with Picochip (UK) WTI-BUPT will use picoChip's WiMAX reference designs and PC102 processor within its research programmes Two parties will work together to develop commercial WiMAX systems optimised for the special needs of the Chinese market picoChip has also signed a cooperation agreement with the Institute of Computing Technology (ICT) of the Chinese Academy of Sciences (CAS) to collaborate on the acceleration of WiMAX in China 6.1 Wimax 6. Other future technologies WRAN (IEEE 802.22):  WRAN (IEEE 802.22) A Wireless Regional Area Network (WRAN) system based on 802.22 protocols is intended to make use, on a non-interfering basis, of unused TV broadcast channels to address, as a primary objective, rural and remote areas and low population density underserved markets with performance levels similar to those of broadband access technologies such as digital subscriber line (xDSL) technologies and Digital Cable modem service. A secondary objective is to have this system scale to serve denser population areas where spectrum is available. The WRAN system must be capable of supporting a mix of data, voice and audio/video applications. The target markets to be addressed by the 802.22 protocols in WRAN networks are single family residential, multi-dwelling units, SOHO, small businesses, multi-tenant buildings and public and private campuses.. So far very few Chinese companies involved, but being similar to Wimax it has lot of potential market in China 6.2 WRAN 6. Other future technologies Slide60:  Currently the coming 3G is the big topic and mobile television is not widely discussed yet Still no government decision about used standard so far (could also be DVB-H) JV company of Shanghai SMG and 东方明珠 has recently begun the DMB Mobile TV trial in Shanghai China is also developing own standard for mobile television Several parties have propositions for standard; Tsinghua University is strongest among them 6.3 DVB-H 6. Other future technologies Mobile TV UWB:  UWB UWB technology is most suitable for short range transmission, with distances up to 10-20 meters In longer range transmitting UWB’s signal becomes too weak Chinese government has no official plans about UWB, but China Academy of Telecom Research (CATR) has some small scale UWB research going on for consultancy purpose to support government’s spectrum investigations In 2004 NSF (Natural Science Fund) has published UWB research fund (1.8 million Yuan) for public bidding as one of the key programs of the NSF Department of Information Sciences 6.4 UWB 6. Other future technologies Slide62:  Currently Chinese research institutes are talking about B3G, not 4G There are basically two branches of B3G research: Datang Mobile’s Beyond TD-SCDMA B3G research under the FuTURE project B3G research in FuTURE Project will be discussed more in details in chapter 8.3 6.5 B3G, 4G 6. Other future technologies B3G – 4G Datang Mobile – Beyond TD-SCDMA:  Datang Mobile – Beyond TD-SCDMA Improvement of the existing technology Joint Detection, Smart Antennas, Adaptive Array, MIMO HSDPA (& later HSUPA) Long Term Evolution for TDD Schemes proposed for LTE TDD MC TD-SCDMA Smooth evolution, better Compatibility LTE TDD OFDM Totally new solution, for long future of TDD 6.5 B3G, 4G 6. Other future technologies Slide64:  Multi-Carrier TD-SCDMA Basic Technologies Joint Detection Smart antenna Uplink synchronization DCA HSDPA Enhanced Technologies E-UL, HSUPA Enhanced JD, improving the cell-edge performance Multiple carriers, based on LCR MIMO, Include space multiplex & beamforming MBMS, Include macro diversity Others, … … … Datang Mobile: Long Term Evolution for TDD 6.5 B3G, 4G 6. Other future technologies Slide65:  7. Policy making and public sector’s role 7.1 CATR 7.2 Communication Standard Association 7.3 CJK Standards Meeting Slide66:  China has a planned economy, using 5-year plans Each 5-year plan gives guidelines and goals for domestic industry In the current 5-year plan (2000-2005) mobile industry has been selected as one of the key industries Mobile industry is in a tight control of the Central government Some of the biggest national research programs are also included in 5-year plans All the operators and number of equipment manufacturers are either fully or partly government owned 7. Policy making and public sector’s role Slide67:  Ministry of Information Industry (MII) is the telecom regulator Many of the research activities for wireless technologies are under the Ministry of Science and Technology (MOST) Main focus of government’s research investments is in mobile technologies. Same goes to the state owned companies’ operations 7. Policy making and public sector’s role China Academy of Telecommunication Research, CATR:  China Academy of Telecommunication Research, CATR Under MII Telecom research and consulting to support MII’s policy making The main body in organizing government’s research and funding programs for wireless technologies standardization and development Core business divided into 7 department 7.1 CATR 7. Policy making and public sector’s role China Academy of Telecommunication Research Organization chart:  China Academy of Telecommunication Research Organization chart 7.1 CATR 7. Policy making and public sector’s role Communications Standard Research Institute of CART:  Communications Standard Research Institute of CART Core Services: Supporting of governmental administration and regulation Formulating national and industrial telecommunication standards Technical and consultancy service for operators and manufacturers Test and certification of telecommunication equipment Technical trial of telecom technology and product Major study area: 3G/B3G next generation network(NGN) network interconnection and interworking telecom resources of numbers and radio frequency intelligence network Signaling network PSTN broadband packet network IP network optical transmission network synchronous network access network mobile communications network paging, trunk and cordless technology microwave and satellite system 7.1 CATR 7. Policy making and public sector’s role The Research Institute of Communications Policy of CATR:  The Research Institute of Communications Policy of CATR The Research Institute of Communications Policy is the specialized policy-making consulting department of CATR under MII. This Institute is the main supporting organ serving China communications competent authorities in the policy-making work. It has in-depth participation in telecom industry policies, regulatory policies, laws & regulations and telecom industry development plan stipulation for a long period of time. Customers: Ministry of Information Industry State Development and Reform Commission Ministry of Science and Technology The governments at various levels including provincial and municipal Communications Administrations Telecom operators and manufacturers Monetary securities & investment institutions R & D institutions at home and abroad 7.1 CATR 7. Policy making and public sector’s role China Communication Standard Association, CCSA:  China Communication Standard Association, CCSA With the approval of the MII and Standardization Administration of China and the Civil Affairs Ministry, China Communications Standards Association (CCSA) was founded in December 18, 2002 Also foreign companies and foreign-investment enterprises can apply for joining in CCSA Scope of activities To promulgate the state laws, regulations and policies on standardization and to facilitate the communication between its members and the Authorities To carry out research and survey activities on communications standardization system ; to organize its members into participating in such activities as drafting standards, soliciting comments, coordination, verification, standards consistency testing, and interconnection and interworking tests To promote the implementation of communications standards through carrying out related activities, such as promulgation of communications standards, consultation, service and training; To organize national and international technical seminars as well as activities of cooperation and exchanges To undertake work related to standardization commissioned by the relevant Authorities, its members and other organizations 7.2 CCSA 7. Policy making and public sector’s role CJK Standards Meeting:  CJK Standards Meeting CJK (China-Japan-Korea) Meeting on Information and Telecommunication Standards started on June 2002 with an initiative of 4 Standards Development Organizations from the respective countries (CCSA as one of them) Background: mutual understanding and cooperation was necessary to promote sound growth and development of the information and telecommunication industries The purpose of CJK Standards Meeting is to mutually exchange views and information on the status of Information and Telecommunication industries in the three countries to contribute to the works of standards organizations of regional and global levels to encourage mutual support and assistance among four SDOs Contribution to the international standards organizations 7.3 CJK Standards Meeting 7. Policy making and public sector’s role Slide74:  8. Public R&D programs 8.1 General 8.2 NSF 8.3 863 8.4 FuTURE 8.5 Notable research institutes Slide75:  There are 4 governmental entities launching nationwide public research funding projects: MOST, National Planning and Reform Bureau, MII and China Academy of Science (CAS) Each of them have their provincial departments, who have the right to fund regional level research projects. Beijing, Shanghai and Shenzhen are most active cities in launching regional projects Typically in government’s research projects there is an expert group that initiates the project, which is then published for public bidding Usually any companies and research institutes can apply for these projects In communication technologies largest projects include research on 3G Networks, TD-SCDMA, FuTURE (B3G), CDMA2000, WCDMA, NGN, LAS-CDMA… In government funded projects company’s self-funding ratio is usually 50% Sino-foreign JV’s can also get public funding, if the majority (51% or more) of the investment and ownership is domestic. 8.1 General 8. Public R&D programs Slide76:  In national level there are currently 5 main research programs going on in China (NSF, 863, 973, Starfire & Torch). Among them, NSF & 863 include funding for wireless technology development Additionally there are large number of regional research projects Many cities have public funds for SME’s high technology R&D 8.1 General 8. Public R&D programs NSF – Natural Science Fund:  NSF – Natural Science Fund Covers whole china Wireless technology development is one of the targets Funding for private companies Activities include joint research projects and international academic conferences in China and abroad Up to now, it has signed cooperative agreements and MOU with 60 science funding organizations and national research institutions in 35 countries and regions and raised its budget for international cooperation and exchange from 0.37 million USD (1987) to 10.15 million USD (2004) 8.2 NSF 8. Public R&D programs NSF - Natural Science Fund:  NSF - Natural Science Fund In the past 15 years, NSFC has funded over 52,000 research projects of various categories by investing a total sum of 0.81 billion USD In 2004 NSF funded 26 Key Program projects, with the average funding about 0.22 million USD The Division of Information Science had number of projects regarding wireless communication technologies, such as UWB, Mobile service Platforms, etc. 8.2 NSF 8. Public R&D programs Slide79:  source: http://www.nsfc.gov.cn/e_nsfc/2004/01au/02fs.htm 8.2 NSF 8. Public R&D programs 1 CNY = 0.123793 USD (11/05) 863 Program:  863 Program The National High Technology and Development Program of China Started first time in March 1986 Original program was temporary, but is now continuous and covers whole country 6 main research sectors, including Information Technology In IT sector, Wireless technology falls under the sub-branche of Communication Technology Annually 3-5 major projects in each main sector Single project funding are between 0.12-2.5 Million USD About 80% of the projects are around 1.2M USD Some projects involve foreign companies as well The most important sub-program for wireless technologies is called FuTURE project 8.3 863 8. Public R&D programs The FuTURE Project:  The FuTURE Project China begun developing B3G technologies in 2001, when FuTURE project started Future Technologies for Universal Radio Environment FuTURE is under the Communication part of the National 863 Program Launched by Ministry of Science and Technology (MOST) The first phase was launched for the 10th 5-years plan (2001-2005), including FuTURE and FuTURE+ phases 8.4 FuTURE 8. Public R&D programs The FuTURE Project:  The FuTURE Project The Mission is to “establish universal radio experiment environment that can meet the application demands and technique trends headed for the years around 2010” Integrates layered wireless communication systems via IPv6 core networks In broadband side it focuses on Cellular Layer (B3G/4G mobile) and Areas Layer; WxAN (WLAN/WPAN/WHAN) 8.4 FuTURE 8. Public R&D programs The FuTURE Project:  The FuTURE Project The 1st phase included vision, spectrum and technology trend evaluations (FuTURE) and Demo systems and application development and standard candidate proposals (FuTURE+) 2nd Phase, FuTURE II (2005-2010) is for trial & pre-commercial systems and standardization work 8.4 FuTURE 8. Public R&D programs The FuTURE Project:  The FuTURE Project 863 / Communication Subject / Wireless communication branch / FuTURE project It aims at: meeting the trends and needs in the field of wireless telecommunications in the next 10 years to carry out investigations on key technologies for air interface of beyond 3G/4G mobile communication system to set up demo systems to verify the key technologies that can support future wireless services to improve Chinas overall research capabilities in mobile communications Enhance China’s international competitiveness during the standardization process of future beyond 3G/4G wireless communication systems 8.4 FuTURE 8. Public R&D programs The FuTURE Project:  The FuTURE Project FuTURE project Coordination Committee undertakes the scientific research management and technological coordination project will organize international and domestic specialists to carry out research into the B3G system, network structure, and operational demands It cooperates closely with China Wireless Telecommunication Standards (CWTS) and spectrum distribution Goal is to keep pace with the development of ITU Source: http://www.chinab3g.org/english/futureproject.htm 8.4 FuTURE 8. Public R&D programs FuTURE’s working targets:  FuTURE’s working targets 8.4 FuTURE 8. Public R&D programs FuTURE technology framework:  FuTURE technology framework OFDM/GMC + TDMA/FDMA based multiple access Distributed radio architecture for improved coverage IDMA for better multiple cell frequency use Add-on techniques: Powerful iterative receiver (turbo receiver) Advanced Turbo/LDPC channel coding/decoding Unified MIMO and adaptive time slot structure 8.4 FuTURE 8. Public R&D programs Achievements:  Achievements Active international cooperation on research and standardization Cooperation with Japan and South-Korea Big number of patents from funded sub projects FuTURE B3G test network in Shanghai 8.4 FuTURE 8. Public R&D programs FuTURE Forum:  FuTURE Forum Established in 2004 Non-Governmental & non-profit organization Jointly founded by operators, equipment providers, universities and research institutions both in China and abroad Objectives: to clarify the vision of future mobile communication development; to assess new trends and new technologies, and to promote the research in B3G field; to realize the sustainable development of mobile communication through international cooperation between China and the rest of the world Source: http://www.chinab3g.org/english/futureproject.htm 8.4 FuTURE 8. Public R&D programs FuTURE Forum:  FuTURE Forum Working scopes: To report to governments and relevant organizations the viewpoints and suggestions proposed by Forum members; To provide suggestions to initiate the R&D projects as well as the standardization research To promote international cooperation between the Chinese and overseas organizations by organizing conferences and seminars To organize research and discussion activities of the Forum members and to publish professional reports and white papers To communicate and work with other international consortium To sort and provide with the latest relevant information 8.4 FuTURE 8. Public R&D programs Notable research institutes for wireless technology:  Notable research institutes for wireless technology The Wireless Technology Innovation Institute of Beijing University of Post and Telecom (WTI of BUPT) Tsinghua University in Beijing South-East University in Nanjing and Xi’an JiaoTong University Shanghai Wireless Communication Research Center (Wireless Core) 8.5 Notable research institutes 8. Public R&D programs Wireless Core:  Wireless Core Shanghai Research Center for Wireless Communications is a Non-profitable organization established in 2003 by Ministry of Science and Technology (MOST), Chinese Academy of Science (CAS) and Shanghai Municipal Government. SHRCWC annual research budget is approx. 3 million Euros and mainly funded by conducting research projects for government. Wireless Core is focused on B3G research and is a member of the FuTURE project. Wireless Core operates the FuTURE B3G test bed in Shanghai. Research is focused on physical layer. It has active cooperation with private companies and its partners include for example China Netcom, Huawei, ZTE, Nokia, Ericsson, Siemens, Motorola and key universities. Wireless core has around 100 employees and the total number (including students) is around 160. About 80 of the permanent employees are researchers. 8. Public R&D programs 8.5 Notable research institutes Slide93:  9. Private sector R&D activities 9.1 General 9.2 Network equipment manufacturers 9.3 Handset manufacturers Slide94:  State owned companies are mainly focusing on 3G and B3G research Majority of the companies still having very limited R&D resources Most of the wireless technology companies buy the core technology from foreign (U.S., Taiwan) companies Most prominent companies in terms of R&D include ZTE, Huawei, Datang and Putian Current trend is to establish Joint Ventures with foreign companies Examples: T3G by Datang and Philips, JV by Huawei and Siemens ($100 million- plus), JV by Putian and Nokia ($111 million) , R&D lab by Nortel & Datang 9. Private sector R&D activities 9.1 General Slide95:  Network equipment manufacturers: ZTE: GSM, CDMA2000 3X, WCDMA, TD-SCDMA, WLAN, Wimax, PHS Huawei: GSM, GPRS, CDMA, WCDMA, TD-SCDMA, WLAN, Wimax Putian Capitel: CDMA2000 1X, WCDMA, TD-SCDMA Datang: GSM, CDMA, TD-SCDMA, BTD-SCDMA 9. Private sector R&D activities 9.2 Network equipment manufacturers Mobile phone manufacturers:  Mobile phone manufacturers China has granted 38 mobile phone manufacturing license Private companies R&D activities vary a lot Tier 1 manufacturers: core technology designed in-house, heavy investments on R&D. e.g. Huawei, ZTE, Datang, Putian Tier 2 manufacturers: up to 50% design in-house. Mostly big consumer electronic companies who have in early stage been using design houses, but nowadays investing more on own R&D. e.g. Konka, TCL, Ningbo Bird, Haier, Soutec and Kejian. Core technology still outsourced. Tier 3 manufacturers: own R&D very limited, usually only plastic coating, etc. Buy solutions and components outside and only assembles the phones. e.g. Kejien, Telsda, taxian, Panda Mobile Generally speaking domestic manufacturers have too much focus on production capacity at the expense of R&D investments 9. Private sector R&D activities 9.3 Handset manufacturers Slide97:  10. Foreseeable radical changes Market is rapidly growing and opening:  Market is rapidly growing and opening Rapid growth of urban population: over 200 million people are estimated to move from countryside to the big cities during the next decade Annual economic growth (around 10%) will continue Improving living standard changes consuming habits Market is opening for foreign companies WTO membership is gradually forcing China to open the mobile market for foreign operators and service providers 10. Foreseeable radical changes Slide99:  3G licenses will probably be granted in 1/Q 2006 The whole industry is waiting to get confirmed information License decision will determine: Scale of TD-SCDMA adoption WCDMA vs. CDMA2000 Winners and losers among manufacturers 10. Foreseeable radical changes Big operator reform before 3G license granting? :  Big operator reform before 3G license granting? In order to avoid duplicate investment in telecommunication industry, the government is now considering to reform the operators. One possible plan is: Split China Unicom into two: GSM part and CDMA part Split China Railcom into South part and North part China Telecom + China Unicom GSM part + China Railcom North part = China Telecom China Unicom CDMA part + China Netcom +China Railcom South part = China Unicom China Mobile + China Satcom = China Mobile This new plan will affect the situation of China Telecommunication industry and 3G license issue. 10. Foreseeable radical changes Slide101:  Consolidation among service providers is expected to happen in near future due to changes in revenue scheme New Telecom law to be released in 2006? will likely outline the gradual opening of VoIP services for foreign players in China Other changes and outlines Domestic manufacturers to partner up more and more with foreign players Government’s decisions will remain unpredictable Other… 10. Foreseeable radical changes Slide102:  11. Finnish companies possibilities in China Finnish companies possibilities in China:  Finnish companies possibilities in China China’s mobile market is of huge size and still growing rapidly. At the same time the market is highly competed by domestic and foreign companies More and more domestic companies are investing on R&D and manufacturing facilities in China Market for bulk products and services is getting saturated -> Finnish companies need to find the niche market with high quality products. Unique content/application or innovative technology can success. 11. Finnish companies possibilities in China Huge demand of Mobile VAS market:  Huge demand of Mobile VAS market Booming VAS market creates huge need for premium content and innovative applications Branded content and high quality games Market for professionally used applications is starting to grow Localization is required (language and culture)! 11. Finnish companies possibilities in China Fulfill the needs of operators:  Fulfill the needs of operators Near future, especially the coming 3G era, will see a boom on network investments Both “green field” and upgrades Already need for reliable and effective billing, provisioning and CRM systems DRM systems Tools for network planning and optimizing Sharing the experiences in 3G business model 11. Finnish companies possibilities in China Converging the diversified infrastructure :  Converging the diversified infrastructure Multiple standards need interoperability Multimode handsets Unified platforms Services for different platforms 11. Finnish companies possibilities in China

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