E.0 EXECUTIVE SUMMARY P.1
1.0 INTRODUCTION
1.1 Introduction 2
1.2 The Competitive Landscape 3
1.2.1 Recent Market Development 3
1.2.2 The Breakup of China Telecom 4
1.2.3 Pressures from the Market Place 6
1.2.4 Competing in the New Environment 7
1.3 Scope of The Report 8
2.0 The Organizational Structure of China's Telecom Industry
before Reorganization
2.1 Overview 10
2.2 The State Council 10
2.3 Key Ministries and Commissions Related to Telecom 11
2.3.1 State Planning Commission (SPC) 13
2.3.2 State Science and Technology Commission (SSTC) 14
2.3.3 State Economic and Trade Commission (SETC) 14
2.3.4 Ministry of Posts and Telecommunications (MPT) 15
2.3.4.1 Organization 15
2.3.4.2 Functions of the MPT 17
2.3.4.3 The Directorate General of Telecommunications (DGT) 18
2.3.4.4 China National Posts and Telecommunications
Industry Corporation (PTIC) 21
2.3.4.5 China National Postal and Telecommunications
Appliances Corporation (PTAC) 22
2.3.4.6 China National Communications Construction
Corporation (CNCCC) 22
2.3.4.7 China Communications Broadcast and Satellites
Corporation (ChinaSat) 23
2.3.4.8 Provincial and Local Telecom Administrations (PTAs) 24
2.3.5 Ministry of Electronics Industry (MEI) 25
2.3.6 Ministry of Radio, Film and Television (MRFT) 26
2.3.7 Ministry of Railways (MOR) 27
2.3.8 Ministry of Power (MOP) 28
2.3.9 Ministry of Foreign Trade and Economic Cooperation
(MOFTEC) 28
2.3.10 State Radio Regulatory Commission (SRRC) 29
2.3.11 People's Liberation Army 29
2.3.12 People's Bank of China 30
2.4 Development Research Center of the State Council 30
2.5 State Information Center (SIC) 31
2.6 Center for Information Infrastructure and Economic Development (CIIED) 32
2.7 The State Council Steering Committee of National Information Infrastructure
(State Council Informatization Leading Group) 33
2.8 China United Telecommunications Corp. (China Unicom) 34
2.8.1 Founding Organizations 34
2.8.2 The Leadership Team 37
2.8.3 Business Development 38
2.8.4 Foreign Cooperation 39
2.8.5 Future Objectives of China Unicom 41
2.9 Ji Tong and the Golden Projects 41
2.10 China Telecom Great Wall Mobile Communications Ltd. 41
2.10.1 Foreign Investment in Great Wall Networks 42
2.10.2 The Development of Great Wall CDMA Mobile Networks 42
2.10.3 Future Plans 44
2.10.4 The China Telecom Great Wall Structure 44
3.0 The Organizational Structure of China's Telecom Industry
After Reorganization
3.1 The New State Council 47
3.2 29 Commissions and Ministries 52
3.3 The Key Ministries and Commissions Related to Telecom 54
3.3.1 State Development Planning Commission 55
3.3.2 The Economic and Trade Commission 55
3.3.3 Ministry of Science and Technology 56
3.3.4 Ministry of Finance 56
3.3.5 Ministry of Foreign Trade and Economic Cooperation 57
3.3.6 People's Bank of China 57
3.3.7 Ministry of Public Security 58
3.3.8 The Super Ministry - Ministry of Information Industry (MII) 58
3.3.8.1 Organizational Structure 59
3.3.8.2 New Leadership Team 64
3.3.8.3 Functions and Responsibilities of MII 66
3.4 China Unicom - Where is its Position after the Reorganization? 70
3.5 Tomorrow's CATV Industry in China 71
3.6 The Integration of Former MPT and MEI 74
3.7 Private Networks without the MOP 74
3.8 The PLA and its Great Wall CDMA Networks 76
4.0 The Impact on Competition and Network Service Providers
4.1 The Effect of the Reorganization 79
4.2 China Telecom- The Largest Telecom Service Provider 80
4.2.1 Telecom Investment 81
4.2.2 Fixed Network 81
4.2.3 Transmission - Fiber, Microwave and Satellite 87
4.2.4 Mobile Communications 91
4.2.5 Data Communications 91
4.2.6 1999 Objectives 95
4.2.7 The 9th Five - Year Plans (1996-2000) 96
4.2.8 Long Term Objectives of Telecommunications Sector in 2010 99
4.2.9 Will China Telecom Maintain its Dominance? 100
4.3 China Unicom 100
4.3.1 Interconnection 101
4.3.2 Unicom's Competitive Strength and Weaknesses 102
4.4 China Telecom Great Wall Mobile Communications Ltd. 103
4.5 Policy on Foreign Participation in Network Services 104
4.6 Case Studies of Foreign Operators in China 104
4.6.1 BellSouth 105
4.6.2 Cable and Wireless (C&W) 106
4.6.3 France Telecom 106
4.6.4 GTE 107
4.6.5 Hong Kong Telecom 108
4.6.6 Hutchison 109
4.6.7 Nippon Telegraph & Telephone Corp. (NTT) 109
4.6.8 SBC International 110
4.6.9 Singapore Telecom 111
4.6.10 Sprint 111
5.0 The Impact on Domestic and Foreign Telecom Equipment Manufacturers
5.1 Overview of Telecom Equipment Production 115
5.1.1 MPT Companies 115
5.1.2 MEI Companies 116
5.1.3 Production Consolidation under MII 117
5.2 Telecom Equipment Joint Venture Companies 118
5.2.1 Switching 118
5.2.1.1 Shanghai Bell (Alcatel) 118
5.2.1.2 Beijing International Switching Corp. (Siemens) 119
5.2.1.3 Tianjin NEC 119
5.2.1.4 Lucent 119
5.2.1.5 Nortel 120
5.2.1.6 Ericsson 120
5.2.2 Transmission/Fiber Optics 121
5.2.2.1 Fiber Optic Cable 121
5.2.2.2 Optical Fiber 122
5.2.2.3 SDH Equipment 122
5.2.3 Wireless Equipment and Mobile Phones 123
5.2.3.1 Ericsson 127
5.2.3.2 Motorola 127
5.2.3.3 AT&T / Lucent 128
5.2.3.4 Beijing Nokia Mobile Telecom Co. 128
5.2.3.5 Shanghai Bell Alcatel Mobile Communication Sys. Co. 128
5.2.3.6 Wuhan NEC Zhongyuan Mobile Communication Co. 129
5.2.4 Paging 129
5.2.4.1 Motorola 130
5.2.5 Data Communications 130
5.2.6 VSAT 131
5.3 Domestic Chinese Manufacturers 133
5.3.1 Switching 133
5.3.1.1 Great Dragon Telecommunication Group 134
5.3.1.2 Golden Roc Electronic Information Machine Co. (Jinpeng) 135
5.3.1.3 Shenzhen Huawei Technology Co. Ltd. 135
5.3.1.4 Shenzhen Zhongxing New Telecom Equipment Co. Ltd. 135
5.3.1.5 Xi'an Datang Telecom Ltd. 135
5.3.1.6 Weifang Huaguang Electronic Group Co. Ltd. 136
5.3.2 Optical Cable and Fibers 136
5.3.3 Wireless 137
5.3.4 Paging 138
5.3.5 Data Communications 138
5.3.6 VSAT 139
5.4 The Impact of Reorganizaton on Equipment Manufacturers 140
5.4.1 Domestic 140
5.4.2 Joint Ventures 141
5.4.3 Foreign Equipment Imports 141
6.0 Participating and Profiting in China's IT Industry
6.1 New Market Opportunities 143
6.2 ATM in the Backbone Networks 143
6.3 SDH and WDM in Fiber Optic Trunks 144
6.4 169 Multimedia Network (China's Country-Wide Intranet) 145
6.5 The Internet 146
6.6 Access Technologies - ISDN, xDSL, Cable Modems and FTTH 147
6.7 CATV 149
6.8 The Golden Projects 150
6.8.1 Gloden Bridge 150
6.8.2 Gloden Gate (Customs) 151
6.8.3 Gloden Cards 152
6.8.4 Gloden Tax 152
6.8.5 Gloden Argriculture 152
6.8.6 Gloden Macro 153
6.9 Wireless Local Loop 154
6.10 Rural Communications Markets in China 156
7.0 China's IT Industry Towards the 21st Century
7.1 Chinese Telecom Operators Urged to Buy Local Equipment 159
7.1.1 Policy on Mobile Telecommunications Equipment 159
7.1.2 Localization Policy 160
7.1.3 MII Market Share Targets 162
7.1.4 Local Loans to Spur Domestic Telecom Industry 163
7.2 Opportunities and Challenges to Service Providers 164
7.2.1 Demand for New Services 165
7.2.2 Conflicts between Domestic Operators 165
7.2.3 The Role of Foreign Operators 165
7.2.4 The Maximum Utilization of Advanced Technology 166
7.3 Opportunities and Challenges to Equipment Manufacturers 166
7.3.1 Comparative Advantage of Chinese Manufacturers 166
7.3.2 The Emergence of Domestic Firms in Key Sectors 167
7.3.2.1 Switching 167
7.3.2.2 Fiberoptic Cables 167
7.3.2.3 SDH and DWDM Equipment 168
7.3.2.4 Mobile Infrastructures 168
7.4 What Should Foreign Equipment Vendors Do to Win Contracts in China? 168
7.4.1 Use of Independent Chinese Party 169
7.4.2 Exporting Directly to China and Assemble in Country 170
7.4.3 Exporting to China and Selling Through Own Sales Force 171
7.4.4 Joint Ventures 171
7.4.5 Wholly Foreign Owned Enterprise (WFOE) 172
7.4.6 Holding Company 173
7.5 China's IT Industry Towards the 21st Century 173
8.0 Contact List of Key Government Organizations
8.1 Ministries and Commissions 176
8.2 Ministry of Information Industry 177
8.3 Key Equipment Manufacturers 192
8.4 Foreign Companies
LIST OF EXHIBITS
Exhibit 2.1 Division & Overlapping of Functions in the Telecom Sector 12
Exhibit 2.2 Ministry of Posts and Telecommunications 16
Exhibit 2.3 Organizational Structure of DGT 19
Exhibit 2.4 China Unicom Organizational Structure 36
Exhibit 2.5 Foreign Investment Model - Unicom Structure 40
Exhibit 2.6 Foreign Investment Model - Great Wall Structure 43
Exhibit 3.1 Organizational Chart of the New State Council 49
Exhibit 3.2 The 13 Departments of Ministry of Information Industry 60
Exhibit 3.3 State Administration of Radio, Film and Television 73
Exhibit 4.1 China's Total Investment in P&T Fixed Assets, 1990-1998 82
Exhibit 4.2 Central Office Exchanges in China, 1987-1998 83
Exhibit 4.3 ChinaTelecom's Telephone Subscribers, 1990-1998 84
Exhibit 4.4 Telephone Penetration Rate in China, 1990-1998 85
Exhibit 4.5 China Telecom's Toll Automatic Exchange Capacity, 1990-1997 86
Exhibit 4.6 China's Fiber Optic Cable Backbone Network 89
Exhibit 4.7 China Telecom Long Distance Fiber Optic Cables, 1990-1998 90
Exhibit 4.8 Mobile Phone Subscribers in China 92
Exhibit 4.9 Users of Public Datacom Services in China 94
Exhibit 4.10 New 9th Five Year Plan After Adjustment (1996-2000) 97
Exhibit 6.1 China Fixed Wireless Access Product Trials 155
Exhibit 6.2 China Fixed Wireless Access Subscirbers Growth Forecast
