Capex increases and carrier realignment are likely once China's government
awards licenses to offer 3G services, says new report issued by Heavy Reading
NEW YORK, Oct. 13 /PRNewswire/ -- China's telecom services market will
undergo dramatic changes over the next three years, once the national
government awards licenses to offer third-generation (3G) wireless services --
changes that will include a short-term increase in capital spending and
probable carrier consolidation, according to a new report released today by
Heavy Reading (http://www.heavyreading.com), Light Reading Inc.'s market research
division.
Telecom in China: Carrier Capex Trends delivers a thorough analysis of
China's telecom services market by examining technology and service
deployments and capital expenditure data for China's largest incumbent and
competitive carriers. The report, created by a team of independent analysts
within China, presents hard data on subscribers, service revenues, and capex
for China's major carriers and analyzes service rollout plans to determine
which network technologies are most likely to attract the carrier capex in the
months and years ahead.
China's largest network operators will make significant shifts in their
capex plans as they ramp up for the next phase of network modernization,
according to the report. These shifts in capex will have significant
ramifications for telecom technology suppliers worldwide as they look to
establish themselves in the world's largest national telecom market.
"Western telecom equipment vendors are scrambling to line up local
partners in China to have their 3G play in place as soon as licenses are
awarded," notes Dennis Mendyk, Managing Director of Heavy Reading. "China's
delay in announcing the 3G winners has helped some Western vendors by buying
them a little more time to pull deals together."
Nokia (NYSE: NOK) is the latest Western vendor to announce a partnership
with a domestic 3G manufacturer in China, joining incumbent suppliers Nortel
Networks (NYSE/Toronto: NT), Alcatel (NYSE: ALA; Paris: CGEP.PA), Ericsson
(Nasdaq: ERICY), and Siemens (NYSE: SI; Frankfurt: SIE) in the China 3G
partnership race.
China's big telecom carriers have curtailed capital expenditures over the
past two years, partly in anticipation of the spending spree that will come
when 3G licenses are awarded, according to the new report. And at least one of
China's top four top network operators is likely to be shut out of the 3G
licensing contest, prompting a carrier realignment that could result in the
breakup of one of those operators, the report concludes.
Other key findings from Telecom in China: Carrier Capex Trends include the
following:
3G is critical to China's telecom carriers, because despite healthy
subscriber growth rates, China's network operators are facing flat or
declining revenues due to intense price competition. Average revenue per user
(ARPU) has declined significantly since 2003, due not only to competition
among wireless operators, but also to personal handyphone system (PHS)
subscribers being signed up by fixed-line service providers.
The immediate future for 3G licensing remains unclear. All of China's
major operators are pursuing 3G licenses, but the timing of their issuance by
the national government remains unclear. Recent reports suggest that 3G
licenses may not be awarded until sometime in 2006.
China's network operators expect capex to grow in 2007. This year's
decline is expected to level off in 2006, as carriers being spending on 3G
network buildouts. The combination of 3G buildout and final preparations for
the Beijing Olympics is expected to increase capex by about 5 percent in 2007.
Telecom in China: Carrier Capex Trends, a 49-page report, costs $3,495 and
is published in PDF format. The price includes an enterprise license covering
all of the employees at the purchaser's company.
For more information, or to request a free executive summary, contact:
Dave Williams
Sales Director, Heavy Reading
858-485-8870
dave.williams@heavyreading.com
Press/analyst contact:
Dennis Mendyk
Managing Director, Heavy Reading
201-587-2154
mendyk@heavyreading.com
About Heavy Reading
Heavy Reading is an independent market research organization offering
quantitative analysis of telecom technology to service providers, vendors, and
investors. Its mandate is to provide the comprehensive competitive analysis
needed today for the deployment of profitable networks based on
next-generation hardware and software.
SOURCE Heavy Reading
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Related links:
http://www.heavyreading.com
CONTACT:
Dave Williams, Sales Director, Heavy Reading,
+1-858-485-8870, dave.williams@heavyreading.com; Press, analyst
contact - Dennis Mendyk, Managing Director, Heavy Reading,
+1-201-587-2154, mendyk@heavyreading.com
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