Slide1 : for GIGA Technology Program
Mikael Leinonen, Finpro Hong Kong Wireless Broadband in China November 30, 2005
Table of Content : Table of Content Introduction
Market overview
Business volume
Network Operators
Services
VAS Figures
SMS & MMS
Ring Back Tones
M-Commerce
Games
Other services
Biggest Service Providers
Revenue sharing model
Currently used Broadband technologies
2.5G
EDGE
Wireless Local Loop
SCDMA
The Cuntong Project
WLAN
3G
General
Lisence issue
TD-SCDMA
3G testing
HSDPA Other future technologies
Wimax
WRAN
DVB-H
Beyond 3G, 4G
Policy making and public sector’s role
CATR
Standard Association
CJK Standards meeting
Public R&D programs
General
NFS
863
FuTURE
Notable research institutes
Private sector R&D activities
General
Network equipment manufacturers
Handset manufacturers
Foreseeable radical changes
Finnish Companies’ possibilities in China
Slide3 : 1. Introduction
Slide4 : This report has been written for the GIGA program of Tekes, focusing on converging networks. The report provides information on the China wireless broadband markets.
This report discusses the following issues
Overview of the China wireless broadband market
Competitive environment
Technology adoption and outlook
Available services
Government’s role in the development of the wireless broadband
Public & Private R&D activities for wireless broadband technologies
Opportunities for Finnish companies 1. Introduction
China in a Nutshell : China in a Nutshell 1. Introduction
Slide6 : 2. Market Overview 2.1 Business Volume 2.2 Network operators
General market information : General market information Telecom revenue reached USD 63 bln in 2004
Mobile communications revenue:
USD 27 bln
13.2% increase from 2003
~43% of total telecom revenue
Number of mobile phone users was 340 million by the End of 2004
~25.9% user penetration by the end of 2004
Mobile penetration is estimated to double itself by 2010 2. Market Overview 2.1 General market information
Market share: fixed vs. mobile : Market share: fixed vs. mobile Number of mobile phone users surpassed the number of fixed line users at June 2004
Pure mobile operator China Mobile is the biggest in market share by revenue and subscribers
Two fixed line operators Telecom and Netcom are now achieving more market share with “quasi” mobile PHS service
2. Market Overview 2.1 General market information
Number of mobile users per technology : Number of mobile users per technology Mobile Users (Millions) per Operator & Technology 4Q/2004 2. Market Overview 2.1 General market information
Mobile subscribers : Mobile subscribers Source: Ministry of Information Industry 2. Market Overview 2.1 General market information
Geographically diversified penetration : Geographically diversified penetration Penetration rate only ~25.9% (2004)
Mobile phone density differs a lot in different areas. Wealthy East-coast is leading in subscriber numbers Comparison of new mobile subscribers in East-, Central- and Western China;
1/H 2003, 1/H 2004 and 1/H 2005 (Y-axis: subscribers 10.000 ). 2. Market Overview 2.1 General market information
New mobile users are mainly post paid customers : New mobile users are mainly post paid customers In 2004 ~90% of the new mobile phone users were prepaid customers
This has caused the decrease in operators’ ARPU Comparison of Fixed Line and Mobile communication ARPU in 2003-2005
(Monthly ARPU, RMB) [1 CNY = 0.123793 USD (11/05) ] 2. Market Overview 2.1 General market information
Mobile Operators : Mobile Operators 2. Market Overview 2.1 General market information
Mobile data revenues, 1Q 05 vs. 2Q 05 China Mobile and China Unicom : Mobile data revenues, 1Q 05 vs. 2Q 05 China Mobile and China Unicom 2005 1/Q 2005 2/Q Yearly change (%) Source: Informa, Mobile Media Analyst, Oct 05 2. Market Overview 2.1 General market information
Handset market : Handset market 2004: 73 million handsets sold
2005 (E): 88 million handsets sold (by CCID)
Over 1000 handset models in market
Nokia, Motorola, Samsung and Bird are leading the market
Domestic manufactures have less than 45% of the total market 2. Market Overview 2.1 General market information
China Mobile : China Mobile CM has the right to use a total of 34 MHz of spectrum, for transmission and reception, respectively, in the 900 MHz frequency band and the 1800 MHz frequency band in Mainland China. Source: China Mobile 2. Market Overview 2.2 Network Operators
Slide17 : China Mobile insight: July 04 – March 05 Source: China Mobile 2. Market Overview 2.2 Network Operators
China Unicom : China Unicom The only operator in China to run two different networks of GSM and CDMA
Testing on CDMA EV-DO & CDMA EV-DV as 3G
(Tianjin and Shanghai has built EV-DO trail network)
Speculation that China Unicom can be split up two
Uni-Info, branded WAP portal.
Established UNISK Information Technology (together with SK Telecom) to engage in wireless value added service business
Uni-Java (developed with Qualcomm) and Brew are two application platforms for China Unicom 2. Market Overview 2.2 Network Operators
China Unicom: strategies : China Unicom: strategies Boosted CDMA users thru calling discount, handset subsidy & prepaid service.
It CDMA targets more to Hi- & Mid-End users & business customers
“World Wind”, a branded service of dual-mode phone services enables users to transfer between GSM and CDMA network automatically
Placing increasing attention to mobile applications as service differentiation eg: Mobile Wallet 2. Market Overview 2.2 Network Operators
Fixed line operators : Fixed line operators China Telecom
Overview
One of the biggest operators in China market (No.2 for revenue).
Focus on fixed line, broadband service, etc. Its main business area is southern parts of China
China have 65.2 million Wireless Local Loop (WLL) user at the end of 2004, China Telecom occupies 60% WLL market
Plan to obtain 3G license in the future
China Netcom
Overview
Third largest operators in China.
Focus on fixed line, broadband service, WLL, etc
Main business area are north part of China
Occupy 40% WLL market share
Official partner of 2008 Olympic Games
2. Market Overview 2.2 Network Operators
Fixed line operators : Fixed line operators China Railcom
Its focus on fixed line, broadband service, etc.
Its network cover whole country
Launched GSM-R trial network in 2004
Testing 3G
China Satcom
Established in 2001, focus on satellite communication.
It devotes to develop satellite communication, broadcasting and related business
Testing 3G 2. Market Overview 2.2 Network Operators
Service fees : Service fees 2. Market Overview 2.2 Network Operators
Slide23 : 3. Services 3.1 VAS figures 3.2 SMS & MMS 3.3 Ring Back Tones 3.4 M-Commerce 3.5 Games 3.6 Biggest Service Providers 3.7 Revenue Sharing model 3.6 Other services
Slide24 : Data services account roughly about 10% of operators’ revenue
Over 1000 Service Providers offering mobile VAS
Total market value of mobile VAS exceed 2 billion Euro in 2003
VAS Market information at Q4 of 2004
WAP user reach 14.9 million, revenue 104 million Euro
Java and Brew games are smoothly increasing, revenues are 2.5 million and 1 million Euro
IVR market revenue 24.5 Euro
CRBT increase fast, user reach 22 million, expect to reach 60 million in 2005, revenue 33.6 million Euros
3. Services 3.1 VAS figures
Slide25 : SMS:
217 bln SMS sent in 2004, 2.69 bln USD of total revenue
57% of SMS are for chat & games, followed by ringtones, pictures, news, financial info,
CM’s top 5 SPs capture 57% revenue from WAP SMS.
Revenue from SMS is leveling off
MMS:
Both operators started MMS with branded content.
Color messaging by CM
Color E by CU – MMS, IMAP (emails), LBS
Number of MMS users reached 6.98 million, revenue 31.1 million USD
MMS is billed at USD 0.096 each (SMS is USD 0.012 each.)
Users also need to pay for MMS content downloaded from Internet portals.
3. Services 3.2 SMS & MMS
Ring back tone – the next big hit? : Ring back tone – the next big hit? Color Ring Back tones:
CM’s “Color Ring”, ringback tone provided by WiseSpot’s WiseRing personalized VAS platform built on NMS Communications technology.
CU’s ringtone@Yamaha offers a vast choice of different melodies for handset ringers.
Special effect ringtones account 40% of downloads.
Avg price: USD 0.25/download, USD 0.8/month fee 3. Services 3.3 Ring Back Tone
Slide27 : M-Commerce:
CM’s Handset Purse
Through SMS, IVR, WAP subscribers operate on bank accounts to purchase, transfer a/c, inquiry balance by SMS
Will expand to shopping, a/c transfer, online payment, security deal, etc.
CU’s Mobile Wallet Service
Cooperation with China Construction Bank
Online payment, money transfer via mobile phone
3. Services 3.4 M-Commerce
Slide28 : Mobile Games:
China is 2nd largest market in APAC.
Role play & action games most popular.
Mobile gaming market topped USD $98 million, 150% growth from 2003
Estimation for 2005: $177,5 million
Currently, majority of revenue comes from offline mobile games
Increasing Java and Brew support in mobile handsets is boosting the game market
Mobile games are mostly from Japan & Korea, few Finnish already in market
Price: 0.5-1 USD/download Java Game
3. Services 3.5 Games
Slide29 : Mobile email service has not yet been launched in China
Market of the vertical market applications (professional use) is still in initials
Location Based Services have certain restrictions
Use of VoIP has been banned by China Telecom 3. Services 3.6 Other services
Slide30 : Top 5 SP of Games
SMS Mobile Games
Linktone, Sina, Sohu, Tom, Mtone, Any8, Tencent
WAP Mobile Games
Kongzhong, Nihon, Shenzhen Xuntian, Mobile NAVI, NewPalm
Java Mobile Games
Kongzhong, Shanda’s Digital Red, Magus, 5wan.com, BJ Mig
Top 5 SP of SMS
Tencent
Sina
TOM
Linktone
Sohu
Top 5 Sp of IVR
TOM
Mtone
Linktone
Sina
Tencent
Top 5 SP of WAP (China Mobile)
Kongzhong
TOM
Nihon Enterprise
GoodFeel (Sohu)
Xuntian
3. Services 3.7 Biggest Service Providers Top Service Providers in 2004
Example of mobile VAS Service Provider – Hurray! Group : Example of mobile VAS Service Provider – Hurray! Group Hurray! Holding Co., Ltd. (Nasdaq: HRAY - News), is one of the leading providers of advanced wireless value-added services and mobile telecommunication network software in the People's Republic of China
Financial results for the second quarter ended June 30, 2005:
Total revenues: $15.0 million, growth of 25.1% year-over-year
2.5G services revenues: $8.8 million, growth of 21.7% year-over-year
2G services revenues: $4.6 million, growth of 28.7% year-over-year
Software and system integration services revenues: $1.6 million, growth of 34.1% year-over- year
Net income: $5.0 million, growth of 16.0% year-over-year
In 2/Q 2005 short-term weakness in the 2.5G market due to WAP billing policy changes by China Mobile and slow CDMA user growth experienced by China Unicom Source: Hurray! Holding Co., Ltd. 3. Services 3.7 Biggest Service Providers
Slide32 : General revenue sharing model:
Revenue sharing model depends on nature of cooperation between operator and SP, SPs and CPs
Revenue sharing model is typically 15-20(operator):80-85(service provider)
Normally revenue sharing model between SP and CP is 50:50, some times depend on negotiation
Recent changes in the model
China Mobile plans to use 3 different revenue share models with SPs in the future
15:85 SPs will be responsible marketing
30:70 Operator will cooperate with SP for marketing for some good service
50:50 Operator will be responsible for Sales, marketing and support
Operators are gaining greater control over SPs
Good for some small SPs if they have attracting services and applications. Operator will help them to do marketing.
3. Services 3.8 Revenue sharing model
Slide33 : 4. Currently used technologies 4.1 2.5G 4.3 Wireless Local Loop 4.4 SCDMA 4.2 EDGE 4.5 The Cuntong Project 4.6 WLAN
2.5G as mobile broadband : 2.5G as mobile broadband GPRS
China Mobile started in 2002
Covers 160 biggest cities (roaming in 73 countries)
Speed around 40 Kbps
CDMA2000 1X
China Unicom started at late 2003
8.711 million subscribers in 2004
Speed around 50-90 kbps
Wireless Local Loop access service
Fixed line operators China Telecom and China Netcom started at 1997, became very popular after 2002
Internet connection with (theoretical) 32/64 Kbps (minimal use)
4. Currently used technologies 4.1 2.5G
China Mobile GPRS data card : China Mobile GPRS data card Starting on July 2004 China Mobile subscribers have had opportunity to use GPRS data adapter for laptop internet access
Service is called “Moving Wing”
China Mobile provides the service with Legend’s data card
Available in 160 cities
Mainly in business use
4. Currently used technologies 4.1 2.5G
EDGE : EDGE China Mobile is deploying EDGE in some selected areas, to better compete with the high data rates of China Unicom’s CDMA2000 1x network
China Mobile Guangdong branch has newly launched EDGE network in Guangdong province, servicing more than 18 million potential customers in cities throughout the Guangdong province.
Service is available with Sierra Wireless AirCard 775 wireless wide area network card 4. Currently used technologies 4.2 EDGE
Wireless Local Loop : Wireless Local Loop Two fixed line operators China Telecom & China Netcom are operating “quasi” mobile Wireless Local Loop (WLL) service
It offers limited mobility within one metropolitan area
The cheap price of WLL service has created price war and is decreasing mobile operators’ (CM & CU) ARPU
There are two main technologies used for WLL:
PHS, known as LittleSmart (or Xiao Ling Tong)
SCDMA, known as Village Wireless Communication (or Da Ling Tong)
PHS is mainly used for cities and SCDMA for rural areas
SCDMA is gaining market share from PHS
August 2005: over 81 million WLL users (55.50 mln as of the end of June 2004)
Estimated to reach 100 million users by the end of 2005
PHS Internet access (32/64Kbps) costs about USD 15 cents an hour
Average PHS handset price of USD 60
LittleSmart also offers some simple mobile VAS and Internet access with the speed of 64 Kbps
WLL users are mainly low-end customers and use for internet access is minimal
However, industry experts believe that China Netcom and China Telecom can gradually shift their large WLL customer base into 3G, so it might have heavy impact on the coming 3G competition 4. Currently used technologies 4.3 Wireless Local Loop
Slide38 : SCDMA, or Synchronous Code Division Multiple Access, is a Chinese home-grown wireless access technology
The main developer is Beijing Xinwei Telecom Technology, in cooperation with Datang, Putian Lingyun, TCL, Amoi, Skyworth, Zhenhua, Konka, Hisense, Lenovo, Jinpeng, etc.
SCDMA Alliance between domestic manufacturers was established in August 2004
(MII) has designated the 23 megahertz frequency specially for the system
Currently the technology is deployed in 106 cities of 16 provinces across China
Currently SCDMA WLL (wireless local loop) networks have no broadband service, but the next evolution version of SCDMA will have a possibility to offer wireless broadband access
Government has formed a high-level working group to investigate SCDMA possibilities as an choice for wireless broadband access 4. Currently used technologies 4.4 SCDMA SCDMA
The Cuntong project : The Cuntong project MII launched the "Cuntong" project in 2004
Project aims to speed up telecommunications availability in central and western China and rural areas to ensure balanced development
The Chinese government is aiming to connect 95 per cent of villages to universal telecom services by the end of 2005
The country's six major telecom operators are all participating in the program
Total of 628,000 villages have been connected so far, with 9,357 newly-connected last year
still more than 50,000 villages in China which remain unconnected
Teledensity in the rural areas is only 13 percent (compared to the whole China average of 23.7%)
SCDMA is being adopted by major telecom operators realizing the Cuntong project
Cuntong project gives SCDMA great market prospects 4. Currently used technolgies 4.5 The Cuntong Project
WLAN : WLAN Started in 2001, Large-scale deployment in 2002 by China Telecom, Netcom and China Mobile
Equipment market size about $54 million in 2004
Estimated to reach $160 million by 2008 (In-Stat: China's WLAN Market Analysis and Forecast 2003-2008)
By the end of 2004, there were about 1,800 hotspots in China
Mainly in upscale hotels, business centers and media organizations and other public venues
There are about 120,000 registered WLAN customers
About 80% are individual users
20% business users
According to some estimations, the user penetration in urban areas is below 5%
Market is still in beginning, but expected to boom in next 5 years
Some private companies use wireless LANs, but universities are still the biggest user group
Only few domestic vendors. Biggest equipment developers are ZTE and Huawei, with joint research with some universities (SZPKU, Tsinghua Uni, South-East Uni) 4. Currently used technologies 4.6 WLAN
WLAN : WLAN China has developed own WLAN standard (came to effect in Dec 2003)
Standard is called GB15629.11-2003
similar to IEEE 802.11, but uses different security protocol
WAPI (WLAN Authentication and Privacy Infrastructure)
Original deadline for vendors to sell only WAPI based equipments was June 2004
To support WAPI, Foreign companies would need to co-product their equipments with Chinese manufacturers
Due to strong opposition from foreign countries (especially USA), China announced to delay WAPI requirements in April 2004
WAPI is still unlikely to completely disappear, since number of manufacturers have already licensed it 4. Currently used technologies 4.6 WLAN
Slide42 : 5. Third Generation mobile 5.1 General 5.2 License issue 5.3 TD-SCDMA 5.4 3G testing 5.5 HSDPA
3G : 3G China has not yet adopted 3G
3G license decision is still open
Licenses are estimated to be granted during the 1/H of 2006
Final decisions on 3G licenses are to be made in very high political level; probably above the telecom regulator Ministry of Information Industry (MII)
Possibly all 3 standards will be adopted
5. Third Generation Mobile 5.1 General
Slide44 : Government is revealing very limited information about licenses in beforehand
Currently there is no official & reliable information available about the timetable or operator requirements
MII has already run several 3G tests to compare different technologies 5. Third Generation Mobile 5.1 General
Slide45 : China has developed her own 3G standard, TD-SCDMA (see chapter 5.3)
A total of 155 MHz spectrum has been scheduled for TD-SCDMA
Country is big enough to support own standard. Goal is to keep the invested money (infrastructure, R&D) in China.
Mainly due to political reasons country will most likely also adopt CDMA2000 and WCDMA
5. Third Generation Mobile 5.1 General
3G licenses : 3G licenses There will be no license auction
China Mobile favors WCDMA
China Unicom is already testing CDMA2000 EV-DV and EV-DO
Fixed line operators China Telecom and China Netcom are also likely to get 3G license
Smaller fixed line operators China Satcom and China Railcom will also get the license?
Lot of guesswork about licenses, whole industry is waiting
WTO membership should open doors for foreign operators, but that will take time 5. Third Generation Mobile 5.2 License issue
TD-SCDMA development : TD-SCDMA development Datang Telecommunication technology (former China Academy of Telecommunication Technology) is the most active TD-SCDMA developer
The biggest manufacturers have formed number of Joint Ventures for TD-SCDMA R&D
The Chinese Government has already invested more than 1 billion (US$123.3 million) in the research and development (R&D) of TD-SCDMA
Domestic companies have got heavy public subsidies for TD-SCDMA development TD-SCDMA
developer pool 5. Third Generation Mobile 5.3 TD-SCDMA
TD-SCDMA : TD-SCDMA ITU standard, belongs to 3GPP
TDD technology, fully compatible with GSM and GPRS
Easy to upgrade from existing infrastructure
Efficient use of spectrum
Effective data transmission. Asynchronous uplink – downlink, suitable for Internet traffic
Use of Smart Antenna technology
Good mobility: > 120 km/h
Large cells, with diameter up to 40 km
Standard development far behind rivals. Standard is very immature, no commercial use so far
No large scale support from industry. Only few TD-SCDMA chips available
Lack of equipments and handsets. No mass production.
No uniform platform for applications -> No application developer “pool”
Some unsolved technical problems:
Cell interference
large cell area functions
high speed mobility
poor stability of existing IC’s
Power consumption of handsets Pros: Cons: 5. Third Generation Mobile 5.3 TD-SCDMA
TD-SCDMA forum : TD-SCDMA forum Industry consortium devoted to develop and support TD-SCDMA technology
Established in Dec/2000 by China Mobile, China Telecom, China Unicom, Datang, Huawei, Motorola, Nortel and Siemens
More than 420 members
16 Board Members
18 Senior Members
390 ordinary members 5. Third Generation Mobile 5.3 TD-SCDMA
TD-SCDMA Industry Alliance : TD-SCDMA Industry Alliance Formed in October 2002 by:
Datang Telecom Technology and Industry Group), Guangzhou Soutec (Group) Technology Co., Ltd., Holley Group Co., Ltd., Huawei Technologies Co. Ltd., Legend (Beijing) Ltd., ZTE Corporation, China Electronics Corporation, and China Pu Tian Corporation
Now 21 members, including:
UTStarcom, Alcatel Shanghai Bell, Hubei Zhongyou Technology Industry & Commerce Co., Ltd., Shanghai DBTEL, Beijing Envada Electric Power Engineering Technology Co., Ltd., Tongyu Communication Equipment Co., Ltd. and Beijing Zhong Chuang Telecom Test Co., Ltd.
Main goals are:
to highly promote the TD-SCDMA industrialization process
to integrate and coordinate the industry resources
to lead the enterprises successfully into the third generation mobile communication market Source: http://www.tdscdma-alliance.org 5. Third Generation Mobile 5.3 TD-SCDMA
3G testing : 3G testing China Academy of Telecom Research (CATR) is running the 3G testing
3G test has been ran in two phases: 1) Laboratory testing in CATR test lab and 2) field test with all 6 national telecom operators
CATR 3G test laboratory in Beijing is called MTnet. All the field tests have been conducted and ran by CATR under the name of MTnet.
MII has Invested almost 25 Million USD on CATR testing facilities
First test (phase I & II, Core network and RAN) with all 3 standards was ran at 2001/6 to 2003/8
Results showed that TD-SCDMA was still too immature for commercial use
Initial tests for WCDMA and CDMA2000 have been conducted already several years earlier
The special test for TD-SCDMA was arranged during May and June 2005 and completed successfully. More than 20 models of user terminals have gone through the test and results showed TD-SCDMA to be ready for commercialization
TD-SCDMA application level testing is still on-going in MTnet. 5. Third Generation Mobile 5.4 3G Testing
Operators’ TD-SCDMA trial networks under the MTnet : Operators’ TD-SCDMA trial networks under the MTnet Problems with terminals, high-speed mobility and cell interference
Only one terminal (by Datang) was available for the phase1 field test 5. Third Generation Mobile 5.4 3G Testing
Slide53 : Operators’ WCDMA trial networks under the MTnet with network supplier information 5. Third Generation Mobile 5.4 3G Testing
Slide54 : Operators’ CDMA2000 (EV-DO) trial networks under the MTnet with network supplier information 5. Third Generation Mobile 5.4 3G Testing
3.5G : 3.5G Since China has been delaying 3G licenses so long, there will already be commercial HSDPA solutions available by the time Chinese operators start to build up their 3G networks
Operators will have change to jump directly to HSDPA in some selected areas
Huawei and ZTE have announced to launch commercial HSDPA solution in 2006
NEC and Samsung will launch HSDPA handsets early 2006
China Mobile will conduct HSDPA trials in Beijing in Dec 2005 with various vendors
Datang Mobile has announced to launch a single carrier HSDPA solution for TD-SCDMA in the 1/Q 2006
Datang Mobile has partnered up with Alcatel Shanghai Bell to develop HSDPA solutions for TD-SCDMA
TD-Tech (Siemens—Huawei JV) has plans to launch commercial TD-SCDMA/HSDPA products in the 1/Q 2006
T3G Technology (Datang-Phillips JV) will release the TD-SCDMA/HSDPA chipset and system solution (single carrier, data support up to 2.8Mbps) in the 2/Q 2006 5. Third Generation Mobile 5.5 HSDPA
Slide56 : 6. Other future technologies 6.1 Wimax 6.2 WRAN 6.3 DVB-H 6.4 Beyond 3G & 4G
Wimax : Wimax Wimax has lot of potential in China, since the fixed line network penetration is still rather small
Government sees 3G and Wimax as complementary technologies and they have different demand on market. However, so far there is no clear action from government about Wimax
Biggest Chinese networks equipment manufacturers, ZTE and Huawei, are both very active on Wimax
Other active Wimax players in China are Intel and Alcatel Shanghai Belling
Many of the current research projects are focused on the interoperability of WLAN and Wimax
As a result from TD-SCDMA project and FuTURE project, there will be a need for a Chinese version of Wimax. Some research institutes and companies (such as Wireless Core, ZTE, Huawei) already have activities about this. Research for “Chinese Wimax” has just started recently and government has not yet given any official deadlines for forming the standard. Government is forming the responsible body to run the research
6.1 Wimax 6. Other future technologies
Slide58 : The Wireless Technology Innovation Institute of Beijing University of Post and Telecommunication (WTI-BUPT) is one of the most active research institutes studying Wimax in China
WTI-BUPT has WiMAX Partnership Agreement with Picochip (UK)
WTI-BUPT will use picoChip's WiMAX reference designs and PC102 processor within its research programmes
Two parties will work together to develop commercial WiMAX systems optimised for the special needs of the Chinese market
picoChip has also signed a cooperation agreement with the Institute of Computing Technology (ICT) of the Chinese Academy of Sciences (CAS) to collaborate on the acceleration of WiMAX in China 6.1 Wimax 6. Other future technologies
WRAN (IEEE 802.22) : WRAN (IEEE 802.22) A Wireless Regional Area Network (WRAN) system based on 802.22 protocols is intended to make use, on a non-interfering basis, of unused TV broadcast channels to address, as a primary objective, rural and remote areas and low population density underserved markets with performance levels similar to those of broadband access technologies such as digital subscriber line (xDSL) technologies and Digital Cable modem service. A secondary objective is to have this system scale to serve denser population areas where spectrum is available.
The WRAN system must be capable of supporting a mix of data, voice and audio/video applications.
The target markets to be addressed by the 802.22 protocols in WRAN networks are single family residential, multi-dwelling units, SOHO, small businesses, multi-tenant buildings and public and private campuses..
So far very few Chinese companies involved, but being similar to Wimax it has lot of potential market in China 6.2 WRAN 6. Other future technologies
Slide60 : Currently the coming 3G is the big topic and mobile television is not widely discussed yet
Still no government decision about used standard so far (could also be DVB-H)
JV company of Shanghai SMG and 东方明珠 has recently begun the DMB Mobile TV trial in Shanghai
China is also developing own standard for mobile television
Several parties have propositions for standard; Tsinghua University is strongest among them 6.3 DVB-H 6. Other future technologies Mobile TV
UWB : UWB UWB technology is most suitable for short range transmission, with distances up to 10-20 meters
In longer range transmitting UWB’s signal becomes too weak
Chinese government has no official plans about UWB, but
China Academy of Telecom Research (CATR) has some small scale UWB research going on for consultancy purpose to support government’s spectrum investigations
In 2004 NSF (Natural Science Fund) has published UWB research fund (1.8 million Yuan) for public bidding as one of the key programs of the NSF Department of Information Sciences 6.4 UWB 6. Other future technologies
Slide62 : Currently Chinese research institutes are talking about B3G, not 4G
There are basically two branches of B3G research:
Datang Mobile’s Beyond TD-SCDMA
B3G research under the FuTURE project
B3G research in FuTURE Project will be discussed more in details in chapter 8.3 6.5 B3G, 4G 6. Other future technologies B3G – 4G
Datang Mobile – Beyond TD-SCDMA : Datang Mobile – Beyond TD-SCDMA Improvement of the existing technology
Joint Detection, Smart Antennas, Adaptive Array, MIMO
HSDPA (& later HSUPA)
Long Term Evolution for TDD
Schemes proposed for LTE TDD
MC TD-SCDMA
Smooth evolution, better Compatibility
LTE TDD OFDM
Totally new solution, for long future of TDD
6.5 B3G, 4G 6. Other future technologies
Slide64 : Multi-Carrier TD-SCDMA
Basic Technologies
Joint Detection
Smart antenna
Uplink synchronization
DCA
HSDPA
Enhanced Technologies
E-UL, HSUPA
Enhanced JD, improving the cell-edge performance
Multiple carriers, based on LCR
MIMO, Include space multiplex & beamforming
MBMS, Include macro diversity
Others, … … … Datang Mobile: Long Term Evolution for TDD 6.5 B3G, 4G 6. Other future technologies
Slide65 : 7. Policy making and public sector’s role 7.1 CATR 7.2 Communication Standard Association 7.3 CJK Standards Meeting
Slide66 : China has a planned economy, using 5-year plans
Each 5-year plan gives guidelines and goals for domestic industry
In the current 5-year plan (2000-2005) mobile industry has been selected as one of the key industries
Mobile industry is in a tight control of the Central government
Some of the biggest national research programs are also included in 5-year plans
All the operators and number of equipment manufacturers are either fully or partly government owned
7. Policy making and public sector’s role
Slide67 : Ministry of Information Industry (MII) is the telecom regulator
Many of the research activities for wireless technologies are under the Ministry of Science and Technology (MOST)
Main focus of government’s research investments is in mobile technologies. Same goes to the state owned companies’ operations 7. Policy making and public sector’s role
China Academy of Telecommunication Research, CATR : China Academy of Telecommunication Research, CATR Under MII
Telecom research and consulting to support MII’s policy making
The main body in organizing government’s research and funding programs for wireless technologies standardization and development
Core business divided into 7 department 7.1 CATR 7. Policy making and public sector’s role
China Academy of Telecommunication Research Organization chart : China Academy of Telecommunication Research Organization chart 7.1 CATR 7. Policy making and public sector’s role
Communications Standard Research Institute of CART : Communications Standard Research Institute of CART Core Services:
Supporting of governmental administration and regulation
Formulating national and industrial telecommunication standards
Technical and consultancy service for operators and manufacturers
Test and certification of telecommunication equipment
Technical trial of telecom technology and product
Major study area:
3G/B3G
next generation network（NGN）
network interconnection and interworking
telecom resources of numbers and radio frequency
intelligence network
Signaling network
PSTN
broadband packet network
IP network
optical transmission network
synchronous network
access network
mobile communications network
paging, trunk and cordless technology
microwave and satellite system 7.1 CATR 7. Policy making and public sector’s role
The Research Institute of Communications Policy of CATR : The Research Institute of Communications Policy of CATR
The Research Institute of Communications Policy is the specialized policy-making consulting department of CATR under MII. This Institute is the main supporting organ serving China communications competent authorities in the policy-making work. It has in-depth participation in telecom industry policies, regulatory policies, laws & regulations and telecom industry development plan stipulation for a long period of time.
Customers:
Ministry of Information Industry
State Development and Reform Commission
Ministry of Science and Technology
The governments at various levels including provincial and municipal Communications Administrations
Telecom operators and manufacturers
Monetary securities & investment institutions
R & D institutions at home and abroad 7.1 CATR 7. Policy making and public sector’s role
China Communication Standard Association, CCSA : China Communication Standard Association, CCSA With the approval of the MII and Standardization Administration of China and the Civil Affairs Ministry, China Communications Standards Association (CCSA) was founded in December 18, 2002
Also foreign companies and foreign-investment enterprises can apply for joining in CCSA
Scope of activities
To promulgate the state laws, regulations and policies on standardization and to facilitate the communication between its members and the Authorities
To carry out research and survey activities on communications standardization system ; to organize its members into participating in such activities as drafting standards, soliciting comments, coordination, verification, standards consistency testing, and interconnection and interworking tests
To promote the implementation of communications standards through carrying out related activities, such as promulgation of communications standards, consultation, service and training;
To organize national and international technical seminars as well as activities of cooperation and exchanges
To undertake work related to standardization commissioned by the relevant Authorities, its members and other organizations 7.2 CCSA 7. Policy making and public sector’s role
CJK Standards Meeting : CJK Standards Meeting CJK (China-Japan-Korea) Meeting on Information and Telecommunication Standards started on June 2002 with an initiative of 4 Standards Development Organizations from the respective countries (CCSA as one of them)
Background: mutual understanding and cooperation was necessary to promote sound growth and development of the information and telecommunication industries
The purpose of CJK Standards Meeting is
to mutually exchange views and information on the status of Information and Telecommunication industries in the three countries
to contribute to the works of standards organizations of regional and global levels
to encourage mutual support and assistance among four SDOs
Contribution to the international standards organizations 7.3 CJK Standards Meeting 7. Policy making and public sector’s role
Slide74 : 8. Public R&D programs 8.1 General 8.2 NSF 8.3 863 8.4 FuTURE 8.5 Notable research institutes
Slide75 : There are 4 governmental entities launching nationwide public research funding projects: MOST, National Planning and Reform Bureau, MII and China Academy of Science (CAS)
Each of them have their provincial departments, who have the right to fund regional level research projects. Beijing, Shanghai and Shenzhen are most active cities in launching regional projects
Typically in government’s research projects there is an expert group that initiates the project, which is then published for public bidding
Usually any companies and research institutes can apply for these projects
In communication technologies largest projects include research on 3G Networks, TD-SCDMA, FuTURE (B3G), CDMA2000, WCDMA, NGN, LAS-CDMA…
In government funded projects company’s self-funding ratio is usually 50%
Sino-foreign JV’s can also get public funding, if the majority (51% or more) of the investment and ownership is domestic.
8.1 General 8. Public R&D programs
Slide76 : In national level there are currently 5 main research programs going on in China (NSF, 863, 973, Starfire & Torch).
Among them, NSF & 863 include funding for wireless technology development
Additionally there are large number of regional research projects
Many cities have public funds for SME’s high technology R&D 8.1 General 8. Public R&D programs
NSF – Natural Science Fund : NSF – Natural Science Fund Covers whole china
Wireless technology development is one of the targets
Funding for private companies
Activities include joint research projects and international academic conferences in China and abroad
Up to now, it has signed cooperative agreements and MOU with 60 science funding organizations and national research institutions in 35 countries and regions and raised its budget for international cooperation and exchange from 0.37 million USD (1987) to 10.15 million USD (2004) 8.2 NSF 8. Public R&D programs
NSF - Natural Science Fund : NSF - Natural Science Fund In the past 15 years, NSFC has funded over 52,000 research projects of various categories by investing a total sum of 0.81 billion USD
In 2004 NSF funded 26 Key Program projects, with the average funding about 0.22 million USD
The Division of Information Science had number of projects regarding wireless communication technologies, such as UWB, Mobile service Platforms, etc. 8.2 NSF 8. Public R&D programs
Slide79 : source: http://www.nsfc.gov.cn/e_nsfc/2004/01au/02fs.htm 8.2 NSF 8. Public R&D programs 1 CNY = 0.123793 USD (11/05)
863 Program : 863 Program The National High Technology and Development Program of China
Started first time in March 1986
Original program was temporary, but is now continuous and covers whole country
6 main research sectors, including Information Technology
In IT sector, Wireless technology falls under the sub-branche of Communication Technology
Annually 3-5 major projects in each main sector
Single project funding are between 0.12-2.5 Million USD
About 80% of the projects are around 1.2M USD
Some projects involve foreign companies as well
The most important sub-program for wireless technologies is called FuTURE project 8.3 863 8. Public R&D programs
The FuTURE Project : The FuTURE Project China begun developing B3G technologies in 2001, when FuTURE project started
Future Technologies for Universal Radio Environment
FuTURE is under the Communication part of the National 863 Program
Launched by Ministry of Science and Technology (MOST)
The first phase was launched for the 10th 5-years plan (2001-2005), including FuTURE and FuTURE+ phases 8.4 FuTURE 8. Public R&D programs
The FuTURE Project : The FuTURE Project The Mission is to “establish universal radio experiment environment that can meet the application demands and technique trends headed for the years around 2010”
Integrates layered wireless communication systems via IPv6 core networks
In broadband side it focuses on Cellular Layer (B3G/4G mobile) and Areas Layer; WxAN (WLAN/WPAN/WHAN) 8.4 FuTURE 8. Public R&D programs
The FuTURE Project : The FuTURE Project The 1st phase included vision, spectrum and technology trend evaluations (FuTURE) and Demo systems and application development and standard candidate proposals (FuTURE+)
2nd Phase, FuTURE II (2005-2010) is for trial & pre-commercial systems and standardization work 8.4 FuTURE 8. Public R&D programs
The FuTURE Project : The FuTURE Project 863 / Communication Subject / Wireless communication branch / FuTURE project
It aims at:
meeting the trends and needs in the field of wireless telecommunications in the next 10 years
to carry out investigations on key technologies for air interface of beyond 3G/4G mobile communication system
to set up demo systems to verify the key technologies that can support future wireless services
to improve Chinas overall research capabilities in mobile communications
Enhance China’s international competitiveness during the standardization process of future beyond 3G/4G wireless communication systems 8.4 FuTURE 8. Public R&D programs
The FuTURE Project : The FuTURE Project FuTURE project Coordination Committee undertakes the scientific research management and technological coordination
project will organize international and domestic specialists to carry out research into the B3G system, network structure, and operational demands
It cooperates closely with China Wireless Telecommunication Standards (CWTS) and spectrum distribution
Goal is to keep pace with the development of ITU Source: http://www.chinab3g.org/english/futureproject.htm 8.4 FuTURE 8. Public R&D programs
FuTURE’s working targets : FuTURE’s working targets 8.4 FuTURE 8. Public R&D programs
FuTURE technology framework : FuTURE technology framework OFDM/GMC + TDMA/FDMA based multiple access
Distributed radio architecture for improved coverage
IDMA for better multiple cell frequency use
Add-on techniques:
Powerful iterative receiver (turbo receiver)
Advanced Turbo/LDPC channel coding/decoding
Unified MIMO and adaptive time slot structure 8.4 FuTURE 8. Public R&D programs
Achievements : Achievements Active international cooperation on research and standardization
Cooperation with Japan and South-Korea
Big number of patents from funded sub projects
FuTURE B3G test network in Shanghai 8.4 FuTURE 8. Public R&D programs
FuTURE Forum : FuTURE Forum Established in 2004
Non-Governmental & non-profit organization
Jointly founded by operators, equipment providers, universities and research institutions both in China and abroad
Objectives:
to clarify the vision of future mobile communication development;
to assess new trends and new technologies, and to promote the research in B3G field;
to realize the sustainable development of mobile communication through international cooperation between China and the rest of the world Source: http://www.chinab3g.org/english/futureproject.htm 8.4 FuTURE 8. Public R&D programs
FuTURE Forum : FuTURE Forum Working scopes:
To report to governments and relevant organizations the viewpoints and suggestions proposed by Forum members;
To provide suggestions to initiate the R&D projects as well as the standardization research
To promote international cooperation between the Chinese and overseas organizations by organizing conferences and seminars
To organize research and discussion activities of the Forum members and to publish professional reports and white papers
To communicate and work with other international consortium
To sort and provide with the latest relevant information 8.4 FuTURE 8. Public R&D programs
Notable research institutes for wireless technology : Notable research institutes for wireless technology The Wireless Technology Innovation Institute of Beijing University of Post and Telecom (WTI of BUPT)
Tsinghua University in Beijing
South-East University in Nanjing and Xi’an JiaoTong University
Shanghai Wireless Communication Research Center (Wireless Core) 8.5 Notable research institutes 8. Public R&D programs
Wireless Core : Wireless Core Shanghai Research Center for Wireless Communications is a Non-profitable organization established in 2003 by Ministry of Science and Technology (MOST), Chinese Academy of Science (CAS) and Shanghai Municipal Government. SHRCWC annual research budget is approx. 3 million Euros and mainly funded by conducting research projects for government.
Wireless Core is focused on B3G research and is a member of the FuTURE project. Wireless Core operates the FuTURE B3G test bed in Shanghai. Research is focused on physical layer.
It has active cooperation with private companies and its partners include for example China Netcom, Huawei, ZTE, Nokia, Ericsson, Siemens, Motorola and key universities.
Wireless core has around 100 employees and the total number (including students) is around 160. About 80 of the permanent employees are researchers. 8. Public R&D programs 8.5 Notable research institutes
Slide93 : 9. Private sector R&D activities 9.1 General 9.2 Network equipment manufacturers 9.3 Handset manufacturers
Slide94 : State owned companies are mainly focusing on 3G and B3G research
Majority of the companies still having very limited R&D resources
Most of the wireless technology companies buy the core technology from foreign (U.S., Taiwan) companies
Most prominent companies in terms of R&D include ZTE, Huawei, Datang and Putian
Current trend is to establish Joint Ventures with foreign companies
Examples: T3G by Datang and Philips, JV by Huawei and Siemens ($100 million- plus), JV by Putian and Nokia ($111 million) , R&D lab by Nortel & Datang 9. Private sector R&D activities 9.1 General
Slide95 : Network equipment manufacturers:
ZTE: GSM, CDMA2000 3X, WCDMA, TD-SCDMA, WLAN, Wimax, PHS
Huawei: GSM, GPRS, CDMA, WCDMA, TD-SCDMA, WLAN, Wimax
Putian Capitel: CDMA2000 1X, WCDMA, TD-SCDMA
Datang: GSM, CDMA, TD-SCDMA, BTD-SCDMA
9. Private sector R&D activities 9.2 Network equipment manufacturers
Mobile phone manufacturers : Mobile phone manufacturers China has granted 38 mobile phone manufacturing license
Private companies R&D activities vary a lot
Tier 1 manufacturers: core technology designed in-house, heavy investments on R&D. e.g. Huawei, ZTE, Datang, Putian
Tier 2 manufacturers: up to 50% design in-house. Mostly big consumer electronic companies who have in early stage been using design houses, but nowadays investing more on own R&D. e.g. Konka, TCL, Ningbo Bird, Haier, Soutec and Kejian. Core technology still outsourced.
Tier 3 manufacturers: own R&D very limited, usually only plastic coating, etc. Buy solutions and components outside and only assembles the phones. e.g. Kejien, Telsda, taxian, Panda Mobile
Generally speaking domestic manufacturers have too much focus on production capacity at the expense of R&D investments 9. Private sector R&D activities 9.3 Handset manufacturers
Slide97 : 10. Foreseeable radical changes
Market is rapidly growing and opening : Market is rapidly growing and opening Rapid growth of urban population: over 200 million people are estimated to move from countryside to the big cities during the next decade
Annual economic growth (around 10%) will continue
Improving living standard changes consuming habits
Market is opening for foreign companies
WTO membership is gradually forcing China to open the mobile market for foreign operators and service providers 10. Foreseeable radical changes
Slide99 : 3G licenses will probably be granted in 1/Q 2006
The whole industry is waiting to get confirmed information
License decision will determine:
Scale of TD-SCDMA adoption
WCDMA vs. CDMA2000
Winners and losers among manufacturers 10. Foreseeable radical changes
Big operator reform before 3G license granting? : Big operator reform before 3G license granting? In order to avoid duplicate investment in telecommunication industry, the government is now considering to reform the operators.
One possible plan is:
Split China Unicom into two: GSM part and CDMA part
Split China Railcom into South part and North part
China Telecom + China Unicom GSM part + China Railcom North part = China Telecom
China Unicom CDMA part + China Netcom +China Railcom South part = China Unicom
China Mobile + China Satcom = China Mobile
This new plan will affect the situation of China Telecommunication industry and 3G license issue. 10. Foreseeable radical changes
Slide101 : Consolidation among service providers is expected to happen in near future due to changes in revenue scheme
New Telecom law to be released in 2006?
will likely outline the gradual opening of VoIP services for foreign players in China
Other changes and outlines
Domestic manufacturers to partner up more and more with foreign players
Government’s decisions will remain unpredictable
Other… 10. Foreseeable radical changes
Slide102 : 11. Finnish companies possibilities in China
Finnish companies possibilities in China : Finnish companies possibilities in China China’s mobile market is of huge size and still growing rapidly. At the same time the market is highly competed by domestic and foreign companies
More and more domestic companies are investing on R&D and manufacturing facilities in China
Market for bulk products and services is getting saturated -> Finnish companies need to find the niche market with high quality products. Unique content/application or innovative technology can success. 11. Finnish companies possibilities in China
Huge demand of Mobile VAS market : Huge demand of Mobile VAS market Booming VAS market creates huge need for premium content and innovative applications
Branded content and high quality games
Market for professionally used applications is starting to grow
Localization is required (language and culture)! 11. Finnish companies possibilities in China
Fulfill the needs of operators : Fulfill the needs of operators Near future, especially the coming 3G era, will see a boom on network investments
Both “green field” and upgrades
Already need for reliable and effective billing, provisioning and CRM systems
DRM systems
Tools for network planning and optimizing
Sharing the experiences in 3G business model 11. Finnish companies possibilities in China
Converging the diversified infrastructure : Converging the diversified infrastructure Multiple standards need interoperability
Multimode handsets
Unified platforms
Services for different platforms
11. Finnish companies possibilities in China