On the best way to issue 3G licenses from telecom

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From the perspective of telecom restructuring, the best way to issue 3G licenses


in late July, the new telecom restructuring plan "swept" the telecom market again, causing many disputes. Although the rumors have been refuted and clarified again and again from the SASAC to operators, due to the special sensitivity of 3G licenses, the debate about telecom restructuring and 3G license issuance will continue before the curtain of telecom restructuring is lifted

this paper expounds the principles that should be followed in the new round of telecom restructuring, and puts forward a 3G license issuance and operation mode that can effectively solve repeated construction and vicious competition by analyzing the difficulties faced by all parties in 3G license and operation at this stage

principles of the new round of telecom restructuring

the fundamental reason for the new round of telecom restructuring is the increasingly fierce vicious competition and repeated construction of telecom operations. The fundamental purpose is to improve the operation efficiency of state-owned assets and protect the overall interests of the country. In this regard, the telecommunications industry and government departments have reached a consensus

when formulating a new round of telecom restructuring plan, the following principles must be followed

(1) the result of telecom restructuring must be conducive to promoting the effective competition of telecom operations, and ensure that the main competitors have full-service operation ability and roughly equal strength. The original intention of encouraging China Unicom to compete with China Mobile was very good, but it did not achieve the expected goal. After ten years of development, China Unicom's competitiveness in the mobile business market is still poor, one of the main reasons is the great disparity in the strength of competitors

(2) telecom restructuring should prevent new disordered competition. After the North-South split of Chinatelecom, the geographical split did not break the fixed natural monopoly, but formed a new round of repeated construction boom. Both Chinatelecom and China Unicom have large-scale construction in each other's territory, whether it is the long-distance trunk line or the user's residence. Even the construction of PHS wireless local telephone network, which is difficult, has also appeared the phenomenon of repeated construction in some areas

(3) telecom restructuring must be very careful in the splitting and merging of telecom network resources. Since 2004, a large number of "telecom restructuring plans" have taken China Unicom as the object of splitting, regardless of the complexity and huge cost of the asset and personnel splitting and integration plan, and regardless of the significant weakening of the strength of China Unicom after the user resources are allocated to other operators, just considering that most of the GSM and CDMA base stations of China Unicom share the same site, after the splitting, the two competing operators will enter the same computer room and share the tower Antenna installation platform, power supply system, transmission system and other supporting facilities, based on the vicious events such as mutual cutting of optical cables and mutual disconnection of power supply that frequently occur between some operators at present, people cannot help but doubt that the two highly competitive operators can really coexist peacefully under the same roof

(4) telecom restructuring and operation policies should give full play to the role of national legislation. It should be said that the relevant departments of the state, especially the SASAC, have made a lot of preparations for the cooperation and reorganization of the four major operators of China Mobile, China Unicom, Chinatelecom and China Guotong in recent years. With the help of SASAC, China Unicom and China Unicom reached a resource sharing agreement in June, 2004; In March, 2005, Chinatelecom and China Mobile signed a cooperation agreement to realize the strategic alliance of "sharing the hardware resources of the telecommunications network, eliminating waste and avoiding repeated investment". However, in addition to administrative orders, the state must enforce market access and network resource sharing in the form of legislation, especially in the field of network resource sharing. The state should force operators newly entering the mobile market to use the network resources of the original mobile operators, or new mobile operators to share mobile base stations with each other, which will help to break the cycle of repeated construction with conventional attachments

the dilemma of 3G license issuance

the number and method of 3G license issuance depend on the results of telecom restructuring, but in turn will affect the actual effect of telecom restructuring. The various 3G license issuance schemes that have been launched objectively reflect the above characteristics, but I personally believe that most of the schemes have failed to help 3G stakeholders effectively get rid of the dilemma of license issuance

1. Worries of government departments. I worry about the time of license issuance and the waste of investment caused by insufficient demand for 3G services; Second, too few licenses are not conducive to competition, and too many will lead to repeated construction and disorderly competition; Sanyou TD-SCDMA. There is no need to repeat the first two worries. Here we focus on the third worry. TD-SCDMA has important strategic significance in China's scientific and Technological Development and even political and economic development. The industrialization process of TD-SCDMA has been paid special attention and strongly supported by government departments. Under the condition that the commercialization of other 3G technologies has been quite mature and the market conditions are basically available, the national 3G policy has also been under great pressure from the outside world in recent years. In addition to the issue of when to issue 3G licenses, government departments also face the issue of which operators to issue 3G licenses. From the perspective of 3G technology system alone, there is no technical barrier to issuing TD-SCDMA licenses to GSM operators except the original CDMA operators. It can be predicted that, despite the call of operators to "independently choose 3G technology system", there is no doubt that the interests of operators are subordinate to the overall interests of the country in the pattern of operators dominated by state-owned capital

-scdma. As mentioned above, government departments have always given full support to TD-SCDMA. In recent years, TD-SCDMA industrialization has also made great progress. After the field test organized by the Ministry of information industry, the speeches of TD-SCDMA alliance and relevant people from the Ministry of information industry confirmed that the technical capabilities and businesses of TD-SCDMA have been verified, and some members of TD-SCDMA alliance also publicly promised to provide commercial products in the second half of the year. However, the industrialization and commercialization process of TD-SCDMA still lags behind the changes of the market, and there are still great disputes in independent groups, terminal support, etc. How to quickly realize commercialization and prove its progressiveness and operability in commercialization will become the key to the success of TD-SCDMA. 3G service demand is not yet mature, which will reserve important time opportunities for TD-SCDMA. On the other hand, on the road of commercialization of TD-SCDMA, the best way to promote the development of TD-SCDMA is to be operated by independent groups of powerful operators. If the TD-SCDMA operated by the independent group can be successful, it will truly achieve a major breakthrough in China's independent scientific and technological innovation. TD-SCDMA alliance has repeatedly emphasized its independent group capability, which also reflects TD-SCDMA alliance's concern about the licensing method of mixed groups

3. Concerns of China Mobile. In public remarks, senior executives of China Mobile have expressed two important views. One is that the demand for 3G services is not yet mature. China Mobile will actively promote the development of GPRS data services and lay the foundation for the development of 3G services in the future. Second, operators should have the right to choose 3G technology system independently. From the perspective of China Mobile, the above views really reflect the concerns of China Mobile. For China Mobile, which is already in a relatively monopoly position, the issuance of 3G licenses will break the existing operation pattern, thus directly impacting the competitive advantage of China Mobile. On the other hand, China Mobile hopes to obtain WCDMA license, especially under the condition that TD-SCDMA was still immature in 2003 and 2004, China Mobile is worried that if it obtains TD-SCDMA license and its competitors get WCDMA or CDMA2000 license with high degree of commercialization. 5. Tightening space: 600mm license, it may lead to the loss of competitive advantage. Now times have changed. With the maturing of TD-SCDMA, although China Mobile has carried out 3G experiments in various places according to WCDMA technology, the expectation of the telecommunications industry that China Mobile will obtain TD-SCDMA license and operate independently is also increasing day by day

4. The itch between Chinatelecom and China Unicom. In addition to equipment manufacturers, the most active 3G licenses are Chinatelecom and Chinacom. After the North-South split, Chinatelecom and ChinaLink achieved rapid repositioning and transformation, and achieved stable development. However, in the development of telecommunications business, fixed is facing the replacement of mobile, and long-distance is impacted by IP. Even the booming PHS business really calculates the economic account, in addition to bringing tangible benefits to consumers, most of it makes money for equipment manufacturers. It can be said that for all the difficulties and problems faced by telecom operators, telecom hutong is the direct receptor. The desire for mobile licenses has become an itch that telecom and Telecom can't scratch for many years. Whether PHS or CDMA450, there is always a pity. In other words, Chinatelecom and chinatone are looking forward to a mobile business operation license, whether it is 2G or 3G, national or regional. On the other hand, due to the huge investment in building a national 3G network, Chinatelecom Hutong hopes to get a good 2G network as a supplement to 3G network to realize roaming between 3G and 2G, so as to solve the problem of insufficient coverage at the initial stage of network construction and avoid the situation that China Unicom was unable to compete with China Mobile due to poor coverage at the initial stage

5. The trouble of China Unicom. China Unicom has been fed up with all kinds of spin offs and restructuring plans. Objectively speaking, although there are two difficulties in Unicom network operation, as mentioned above, it is not feasible to split the two from physical assets, and with the issuance of 3G licenses, this situation will change. The existing CDMA1X will be upgraded to 3G, and the existing 2G network can be used as an important source of cash flow in the short term. However, China Unicom still has other worries: first, can China Unicom 3G network be competitive? Judging from the current CDMA business development of China Unicom, it is doubtful. The biggest possibility is to rely on the transfer of GSM users to develop 3G users, but most of China Unicom's GSM users are low-end users. It is difficult to achieve the benign development of 3G network only by relying on short-term marketing policies to promote the transfer. Second, what is the development strategy of the GSM network that continues to be retained? China Unicom's GSM network is a national network. Even if it maintains its original scale, the operation and maintenance cost of the network is also very large. Not to mention that low-end users also face the impact of other operators. If they do not increase investment and improve network performance, whether it can become the expected cash flow will also become a problem. Therefore, we must consider appropriate capital operation of GSM network resources or resource sharing with other operators who have obtained WCDMA licenses, so as to compensate some operating costs of GSM network and realize the benign and coordinated development of GSM and 3G network

6. The wish of China Railcom and China Satcom. Due to the "whole process" characteristics of telecom networks, it is difficult for small and medium-sized operators such as China Railcom and China Satcom to obtain greater development space at the full service level. Unless they choose a professional operation path, it is the best choice to merge and restructure with other operators. The same is true from the perspective of state-owned assets integration. Comparatively speaking, China Satcom has a certain professional operation ability, and China Railcom should consider merging and restructuring with other high molecular materials operators that can make efficient use of solar energy and wind energy

telecom restructuring proposal and the best way to issue 3G licenses

first, the main points of the previous article are summarized as follows

1. About telecom restructuring

(1) after telecom restructuring, all major operators should have full-service operation ability and equal strength

(2) China Unicom should not be split, especially physical assets and user resources

(3) Chinatelecom and ChinaLink maintain regional operators' land

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