Monthly Archives: January 2012

Ready for 4G?

Here we go again with Chinese telecommunication standards and regulatory procedures.

According to Caixin the very much expected roll-out of 4G networks may run into delays. Results of network testing conducted by China Mobile are being withheld and, instead of the usual group approach, the Chinese carrier appears to be holding one-on-one discussion with network equipment vendors.

The process is somehow reminding us of the 3G saga in which operating licenses were given out once domestic firms had managed to offer a working standard that could match the established European and American standard.

Being a state-owned carrier may not always secure a competitive advantage, in particular when the regulator interferes with the market.

Not losing their bearings

Some may remember the temporary removal of the LIttle Mermaid from the Copenhagen harbor so that it could be showcased at the Shanghai Expo in 2010.

The friendship between Denmark and China may well be entering a new stage. A recent article by the Wall Street Journal draws attention on the diplomatic courting by Danemark who apparently supports giving China permanent membership on the Arctic Council.

If geography serves me right (and unless the earth was suddenly to tilt on its axis), China’s latitude does not exactly qualify it as an Arctic Ocean Coastal State. There is of course China’s scientific interest in the sea. But to really explain this rapprochement one needs to search no further than economics. The Arctic is indeed home to countless minerals. In addition, the summer route between Shanghai and Hamburg (via the Bering Strait) is 6400 kilometers shorter than via the Suez Canal, reducing both time and cost for shipping goods by sea.

No better way to summarize China

Capturing the diversity and dynamism of a country the size of China is not an easy feat.

This week’s announcement from the People’s Daily is likely to achieve it: the online avatar of the Chinese Communist Party’s (People’s Daily Online) is going to be listed on the Shanghai stock exchange.

For many one of the CCP’s mouthpieces embracing capitalism may seem a contradiction in terms or, worse, the proof that the Party has definitevely distanced itself from Marxism-Leninism. It shouldn’t. Symbolism aside, the People’s Daily is not very much different than any other state-owned enterprise listed on the stock exchange: it is majority-owned (and controlled) by the government raising capital where it is available. In fact, it is a similar story than with the Internet where the government has always shown its intent to embrace it while controlling it.

One can’t get more pragmatic than that!

Abroad, mobile but virtual

China Telecom, the largest fixed-line provider in China, is going mobile in the UK…

Neither the mode of entry via a mobile virtual network operator (MVNO) nor the segment targeted (Chinese tourists) may sound very threatening to established mobile operators like Vodafone or O2. While such a low-key market entry carries little downside risks, it also provides little upside benefits. Nevertheless, it sends a mighty signal to carriers across the world that Chinese operators are no longer only concerned about their domestic market.

In spite of China’s accession to the WTO a decade ago and the ensuing  ”liberalization” of the telecommunication market no foreign operator has really ever managed to crack the Chinese market. Competition may now take place elsewhere and, given the deep pockets of Chinese operators, it may be fierce.