Regulation blocks telecom-media convergence in China


industry players’ eagerness to offer converged services in China such as IPTV
and mobile TV, the development of converged services between telecoms and media
was a long time coming, primarily because of the significant regulatory
barriers in China, according to Ovum.


biggest barrier is from diverse regulation and the long-standing conflict
between the two regulators governing the sectors (telecoms and media) as a
result of the lack of a Telecommunications Act, and also the lack of a new
regulatory framework designed by the State Council.


two key regulators – the Ministry of Industry and Information Technology (MIIT)
and the State Administration of Radio, Film and Television (SARFT) – have
hindered the uptake of these converged services.


addition, all the key players in the telecoms and media markets, hundreds of
regional broadcasters (cable operators), and three telcos (China Telecom, China
Mobile, and China Unicom) are state-owned companies. Due to insufficient
liberalization and privatization, this is another barrier to achieving fair
competition between broadcasters and telcos in the convergence market.


State Council should impose further regulation such as interconnection and
anti-monopoly regulation, and remove regulatory barriers between telecoms and
media such as the current complex license grant and management mechanism on
converged services,” said Charice Wang, analyst at Ovum.


it should do so soon, in order to avoid missing its target. The first
Telecommunications Act also needs to become effective immediately, as this is
an essential move to promote convergence in China,” Wang added.


on current trials, Ovum expects forthcoming convergence to have significant
impacts on next-generation network investment by both telecoms operators and
broadcasters, promoting market competition.


telcos and broadcasters will enhance their investment in next-generation core
and access networks. Part of this investment will come from public funds. The
Chinese government focuses on developing telecoms infrastructure, with total
investments reaching $308.7bn, in which broadband development would account for
80 percent according to the twelfth Five-Year Plan (2011-15).


Five-Year Plans are a series of economic development initiatives which set
growth targets for economic development for each period of five years. The
broadcasters are expanding their next-generation broadcasting (NGB) networks,
over which a wide range of converged services such as fixed telephony,
broadband, and media will be provided.


competition will be intense, particularly in the broadband and VAS markets. The
NGB networks will help broadcasters to enter the fixed and mobile broadband
markets and compete head-on with the three major telecoms operators. Telcos are
developing their own strategies and responses to the converged environment.


some Asian countries, the converged regulators such as the National
Communications Commission in Taiwan (which came into operation in early 2006)
and the Korea Communications Commission (established in February 2008) were set
up to concentrate their efforts on regulatory convergence.


move of setting up the converged regulators helped to promote converged
telecoms and media services. A new regulator integrating the current MIIT and
SARFT should be launched in the near future, possibly in 2013 when next China’s
government restructuring happens.

By Team

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