Monthly Archives: May 2008

Wire[less]ing China

Guangzhou is one the latest municipality announcing the deployment of more than 1,000 wireless broadband access points around the city - the number is expected to hit 2,500 by the end of 2008. By 2010 the wireless coverage should be extended to all urban areas and part of the rural areas of Guangzhou with 10,000 hot spots!

Besides Guangzhou, Beijing, Shanghai, Shenzhen and Nanjing are also building up their city-wide wireless broadband networks – 25 large and medium-sized cities have signed up for similar development plans. They all tend to follow a 3-phases approach: inner city, outer city and rural areas so as to eventually cover an entire municipal area. Depending on the operators, hotspots are located in hospitals, government office areas, street lights or traffic lights and use Wi-Fi, Wi-Fi Mesh and Wi-MAX technologies

Even if the companies do not need a license when building the Wi-Fi networks, the government agencies are never far away: content is regulated by the Ministry of Culture while access is regulated by the Ministry of Information Industry. The municipalities are also reaching profit-sharing agreement with the network builders for value-added services: some of the early experiments included webpage browsing, video surveillance, video on demand and voice communication while Baidu, China’s largest search engine, is developing a wireless search services.

China’s Premier Debuts on Facebook

A supporter of China’s prime minister, Wen Jiabao, has set up a page on Facebook. His page already has close to 25,000 fans (as of May 29, 6PM GMT) underlining his growing popularity in the aftermath of the earthquake – Mr. Wen drew much praise when he flew to Sichuan in the hours after the earthquake and traveled around to hard-hit towns to express sympathy with victims. It is unclear who the supporter is and whether he or she has ties to the government since there has been no official comment by the government in the official media.

Want to be Wen’s pal and help him catch up with Obama’s 800’000+ supporters, go to Facebook

Count:
- 45’000 as of June 3
- 50’000 as of June 13
- 55’000 as of July 30

7 million new consumers … per month

Once again, China Mobile added more than 7 million subscribers in April. Even if this represents a “small” decrease compared to February and March (the decline is officially caused byseasonal weakness), the company is well on track to reach its target of adding 80 millions users by the end of the year. Its rival, China Unicom gained “only” 1.5 million mobile phone users in April, down from 1.62 million a month earlier. This leaves us with 400 million mobile users for China Mobile and 168 million for China Mobile.

Who are these new consumers? Mainly low-end users (in rural areas) which is leading to a decrease in the average revenue per minute of usage. Average revenue per user (ARPU) is logically falling: it fell by 10% since last December to under USD 10 per month. Though worrying, China Mobile maintained an EBITDA margins above 50% in 2007.

At the same time the fixed operators keep losing customers. China Telecom fixed-line subscribers fall by around 1 million per month (half a million for China Netcom). Both companies are compensating with gains in broadband users (around 500’000 per month).

Online mourning

The State Council (China’s top executive agency) launched an online mouring campaign: as part of three day mourning period related to the Sichuan earthquake, ALL websites were ordered to take down entertainment and game sections and to redirect to ones dedicated to commemorating earthquake victims. Some of the largest portals (Sina, Netease) immediately followed, re-directing frontpage entertainement.

In a sense, this reflects what is happening in other broadcasting media. For instance all TV stations suspended normal programming and only broadcast CCTV programs. Public entertainment will not be allowed either for the next 3 days.

Of phones and earthquakes

The dramatic earthquake in Sichuan has revealed the incredible resilience of Chinese telecommunication operators. China’s telecom industry as a whole had dispatched 15,000 staff, 520 satellite phones and 650 sets of emergency telecommunication equipment. While China Telecom was working hard on restoring its fiber optics network, China Unicom launched satellite communication services in the region. China Mobile set up three temporary mobile communication base stations at the rescue command center. China Mobile’s Sichuan branch also opened sites in areas with dense populations in Sichuan Province so that people affected by the earthquake can keep in touch with their families and friends around the nation. By May 14, it had set up more than 2100 such sites to provide free telephone service, free mobile phone battery charging and free drinking water.

Analysts estimate that operators might have to spend as much as USD 200 million to reconstruct or replace up to 2,600 base stations which may have been destroyed or badly damaged by the earthquake. The use of alternative communication technologies  also highlighted the importance of redundancy. Xiaolingtong phones (aka “little smart”) are being extensively used in place of the mobile phones. China Satellite Communications Corporation is importing 1,000 satellite phones amid efforts to support the disaster areas in addition to the 350 satellite phones alrady dispatched to rescue personnel.

P.S.: The crisis has also prompted most players in the sector to donate either equipment or cash.

Hacktivism against China

China Red HeartAccording to the BBC, overseas hackers have been disrupting Chinese websites for the past month. At stake in this online battle? The independence of Tibet and other politically sensible topics that have brought China to the center of media attention.

One the latest targets of the cyber-attacks has been “Red Heart”, a website movement in which 7 million Chinese MSN users added a patriotic red heart to their usernames. The hackers posted the Tibet independence flag on 5sai.com, the site that initiated the movement. The hacking also came with the usual “denial of service” (DoS). The attackers’ IP addresses were in some cases attributed to Europe - although one should keep in mind that it is notoriously difficult to determine with a high level of precision who is behind a cyber-attack. As the Olympics come closer and tension does not seem to decrease it looks like, for once, it is time to look West.

Spontaneous patriotic campaigns by Internet users are not unheard of, even in China. The (mistaken?) bombing of the Belgrade embassy by the US air force had prompted a number of serious hackings of american governmental websites – including the homepage of the U.S. embassy in Beijing and U.S. Department of Interior. It is however one of the first large-scale hacktivist movement against Chinese sites. It looks like the Games have already started on the Internet.

Emergence of global mobile operators?

Will widgets (software applications) allow the emergence of truly global mobile operators? Last week Vodafone and China Mobile (600 million subscribers together) joined with Softbank to launch the Joint Innovation Lab (JIL). Their focus is on improving mobile’s user interface, and in particular enable different widgets and applications to run smoothly on different handset platforms and operating systems across different mobile operators.

Behind JIL’s widgets project something more profound is taking place. Remember that the world’s two largest mobile phone operators entered into a strategic alliance in 2000 (sealed by Vodafone’s USD 2.5 billion acquisition of 2% of China Mobile). They have been collaborating on a number of projects over the years – more recently they jointly backed LTE, preparing the ground for 4G. At stake this time is no less than the development of a universal software specification.

So is this the signal that the two operators are finally coming out of the woods and prepared to use their huge subscriber base to drive the future of the mobile industry? For sure, cooperation will be useful to speed the roll-out of mobile internet services. It will also allow them to better face the upcoming battle with Google and Yahoo  – who are also keen to occupy the mobile space. It is also interesting for China Mobile – and China in general – since it will be one of the first attempt to approach standardization in a bottom-up fashion - from the market – rather than top-down – from the government. We may be witnessing China Mobile’s first steps into becoming a global mobile operator…