By Telecom Lead Team:
As large enterprises in China have fewer sites connected to their wide area
networks (WAN) and a smaller international presence than their counterparts in
other regions, the Chinese enterprise network services market is still
relatively immature. However, it does offer a number of good prospects for
service providers, according to Ovum.
65 percent of the
Chinese companies surveyed had less than five sites connected to their WAN, and
only 11 percent extended their WAN to sites outside the country of their
corporate headquarters. This was the lowest rate among all the countries
covered in Ovum’s large-enterprise survey.
demonstrate that national service providers are currently well placed to serve
the majority of large enterprises in China, and can hold off on their
international expansion plans in the short term,” said Jane Wang, Ovum telecoms
analyst and author of the survey.
The expectation is
higher for Ethernet services, and they will provide the greatest opportunity
for service providers in China. Ethernet private lines and Ethernet VPN are
considered to be the main WAN technologies for future deployments as they
provide good value for money and high security for enterprises.
This is a strong
requirement for many large Chinese enterprises in specific industry verticals,
such as the manufacturing and energy sectors, as 72.5 percent of large Chinese
enterprises expect Ethernet private lines and Ethernet VPN to become their key
WAN technologies in the next two years. As a result, service providers in China
should put Ethernet at the core of their network services strategies.
High definition (HD)
video is the most important application over WAN for large enterprises in
China, and is expected to drive the adoption of new network technologies and
services. China has a high adoption rate of HD video over WAN as Chinese
employees, especially high-level management and decision makers, prefer
face-to-face meetings with stakeholders and staff in different offices.
The popularity of HD
video is a result of a number of direct business and use cases. China has the
lowest adoption rate of voice over IP and critical business applications over
WAN. As a result, service providers will need to work hard to develop
successful case studies to convince customers about the benefits of supporting
these networked applications.
Meanwhile, the telecom capital expenditure of Chinese service providers
has gone up to $45.71 billion in 2011 from $39.397 billion in 2010, clocking 16
However, telecom Capex in 2011 is
lower than their capital expenditure in 2009. In 2009, telecom operators spent
$47.39 billion for adding wireline and wireless infrastructure.
Chinese telecom operator Capex
increases 16% to $46 billion in 2011
Mobile expenditure has gone up from
$27.65 billion to $30.44 billion in 2011. Fixed line expenditure has also
increased from $11.73 billion in 2010 to $15.27 billion in 2011.
In the year of 2009, the fixed line
expenditure stood at $15.12 billion.
In mobile sector, China Mobile tops
the Capex chart in 2011 with $20.34 billion in 2011, followed by China Unicom,
which spent $3.86 billion for the same year.
In the year 2011, China Telecom’s
expenditure stood at $2.38 billion, which went up from $1.46 billion in 2010.