China Telecoms Faces Power Struggle, Half-Baked 4G 中国电信行业遭遇政府监管权利斗争
Storm clouds are brewing on two separate fronts for China’s telecoms sector, with a power struggle shaping up between 2 major government agencies over an anti-monopoly investigation, while leading wireless carrier China Mobile (HKEx: 941; NYSE: CHL) rushes hastily ahead with new trials for its homegrown 4G technology. First the looming power struggle, which will pit China’s powerful state planner, the National Development and Reform Commission (NDRC), against the telecoms regulator, the MIIT, over an investigation into monopolistic practices in China’s broadband market by the nation’s second and third largest carriers, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA). Chinese media are reporting the telecoms regulator, the Ministry of Industry and Information Technology (MIIT) is preparing its own investigation into monopolistic practices in the broadband space by China Telecom and Unicom, following the NDRC’s high profile announcement last week that it was conducting its own probe. (Chinese article) This kind of turf war is quite common in China, although one seldom sees it at such a high level as this involving such major state-run companies. Look for major friction as the NDRC aggressively pursues its anti-monopoly case, while the MIIT, many of whose former officials now work at China Telecom and Unicom, is likely to defend current industry practices. Meantime on a second unrelated front, China Mobile executives have come out and said in very high profile manner that they are launching second-phase large scale trials for their homegrown 4G standard, TD-LTE, with an aim to wrapping those trials up by next June. (English article) It made the announcement even as the initial phase of trials ran into major problems when two of the vendors fell way behind schedule, meaning the trials couldn’t be properly completed. (previous post) China Mobile is clearly rushing ahead with these trials as it wants to commercialize its 4G standard as soon as possible, allowing it to quietly retire its problem-plagued 3G network based on another homegrown technology called TD-SCDMA. But this kind of rushing ahead while earlier work remains incomplete hardly seems like the right way to proceed, and I see major problems popping up in the future for TD-LTE that could delay the technology for months or even years if China Mobile isn’t careful.
Bottom line: Storm clouds are looming for China’s telecoms sector in the form of a government power struggle over industry regulation, and a rush to develop a homegrown 4G standard.
Related postings 相关文章:
◙ Telecoms Investigation Signals Profit Erosion 电信联通遭反垄断调查或侵蚀利润
◙ China Mobile’s TD 3G Fading Fast 中国移动3G网络前景黯淡
◙ China Mobile: Poor 3G Approach Yields Weak Results 中移动3G策略不当 拖累公司三季度业绩
