Mobile Operator and Vendor Positioning in the Evolving Mobile Markets

China and Hong Kong are one country but with different administrative and legislative systems, as well as diverse telecommunications landscapes. Ten years after the handover, China’s influence on Hong Kong’s telecommunication future is beginning to show, with the first CDMA2000 spectrum auction in October 2007. The Chinese 3G landscape contains many uncertainties due to government intervention in the telecommunication industry. How will restructuring take place? What lies ahead for China in 4G?

This study examines the regulations, technologies, handset and infrastructure vendors’ challenges, and operators’ competitive landscape in both China and Hong Kong and provides forecasts of the performance benchmarks of both regions

What Does This Report Answer?
How might China and Hong Kong align their telecommunication goals?
How would Chinese standards such as TD-SCDMA fare in a mature market like Hong Kong’s?
What are the different challenges for handset and infrastructure vendors in both countries?
How different are the usage patterns of subscribers in China and in Hong Kong?
What are the possible scenarios of China’s telecommunication restructuring?
When will 3G licenses be issued? Who will get what license, and when?
What is the influence of 3G on 2G and PHS markets in China?
What are the opportunities for rural vs urban penetration?
What is the current status of TD-SCDMA?
What strategies will Chinese operators adopt in the 3G era?
What are the opportunities for mobile WiMAX in China?
What should we expect during the Beijing Olympic Games in 2008?
What’s next after the cancellation of the handset license policy?
What are the market opportunities for handset vendors? Who wins and who loses?
What are the market opportunities for infrastructure vendors? Who wins and who loses?
Who Needs This Report?
Mobile handset vendors
Mobile infrastructure vendors
Wireless IC vendors
Telecom operators
Telecom regulators
Investment and business consulting firms

Section 1.
EXECUTIVE SUMMARY
1.1 Overview of People's Republic of China (PRC)
1.2 Overview of Hong Kong Special Administration Region (SAR)
1.3 Regulatory Issues
1.4 Technology Issues
1.5 Operators Landscape
1.6 Handset Vendors Landscape
1.7 Infrastructure Vendors Landscape
1.8 Market Forecasts

Section 2.
REGULATORY ISSUES
2.1 Regulatory Issues in Hong Kong SAR
2.1.1 Spectrum Policy
2.1.1.1 Spectrum Allocation
2.1.1.2 Future Spectrum Releases
2.1.2 Technology Neutrality Policy
2.1.3 The Open Network Access (ONA) Requirements
2.1.4 Foreign Ownership
2.1.5 Mobile Content Censorship
2.2 Key Findings of Regulatory Issues for Hong Kong
2.3 Regulatory Issues for China
2.3.1 Spectrum Policy
2.3.1.1 Spectrum Allocation
2.3.1.2 Future Spectrum Releases
2.3.2 Technology Neutrality?
2.3.3 Market Competition
2.3.4 Pricing Policy
2.3.4.1 Three Categories of Price in 2000
2.3.4.2 2002: Operators Began to Take the Lead
2.3.4.3 2005: Heading Toward Greater Liberalism or Not?
2.3.4.4 Calling-Party-Pays (CPP) Scheme
2.3.4.5 Where is Telecom Pricing Policy heading?
2.3.5 Foreign Ownership
2.3.5.1 SK Telecom in China
2.3.5.2 Vodafone in China
2.3.5.3 Telefonica in China
2.3.5.4 France Telecom in China
2.3.5.5 Foreign Investment: Where is it heading?
2.3.6 Mobile Content Regulations
2.3.7 Handset Regulations
2.3.7.1 No More Handset License Approval System
2.3.8 Telecommunication Equipment Licensing
2.3.9 Tender or Telecommunications Network Construction and Equipment Supply
2.4 Key Findings for Regulations Issues in China

Section 3.
TECHNOLOGY ISSUES
3.1 China Migration Path from 2G to 2.75G
3.2 China 3G Readiness
3.2.1 TD-SCDMA Status
3.2.1.1 TD-SCDMA Handsets Readiness
3.2.1.2 TD-SCDMA Chipsets: Readiness
3.2.1.3 ARENA, the TD-SCDMA Software Development Kit (SDK)
3.2.1.4 TD-SCDMA Competing with GSM
3.2.1.5 TD-SCDMA Competing with CDMA2000
3.2.1.6 TD-SCDMA Competing with W-CDMA
3.2.1.7 TD-SCDMA Competing with WiMAX
3.2.1.8 Communications Expectations for Beijing Olympic Games 2008
3.2.2 Prospects of 2G Technologies in 3G / 4G Era in China
3.2.2.1 Prospects for GSM
3.2.2.2 Prospects for CDMA
3.2.2.3 Prospects for PHS
3.2.3 Prospects for W-CDMA
3.2.4 Prospects for WiMAX
3.2.5 WiMAX Development in China
3.3 China 4G Direction
3.3.1 The “FuTURE B3G Project”
3.3.2 Multi-Carrier Wireless Information Local Loop (McWiLL) Standards
3.4 Hong Kong 4G Direction
3.5 Key Findings

Section 4.
OPERATORS LANDSCAPE
4.1 China Telecommunication Industry Competitive Landscape
4.1.1 China Telecommunications Restructuring in 1999, 2001
4.1.2 Delay of 3G and Projected Timing
4.1.3 Possible Restructuring and 3G Licensing Scenario
4.1.3.1 Scenario 1: Three Kingdoms
4.1.3.2 Scenario 2: Multiple is Good?
4.1.4 China Mobile: W-CDMA or TD-SCDMA?
4.1.5 China Unicom: Continue to hold the CDMA torch?
4.1.6 China Telecom: Which side to partner?
4.1.7 China Netcom: What is its winning position?
4.1.8 China Satcom: What’s left?
4.1.9 China Tietong: Mobile WiMAX Opportunities
4.2 Hong Kong SAR 3G Mobile Operators Competitive Landscape
4.2.1 3G Strategies
4.3 Key Findings

Section 5.
HANDSET VENDORS LANDSCAPE
5.1 2G Handsets in China Market
5.2 Prospects after Cancellation of Handset License Approval System
5.2.1 Challenge of Domestic Players
5.2.2 Challenges of International Players
5.2.3 3G Handset Market Strategies
5.2.3.1 Multi Mode Handsets
5.2.3.2 Operator-Customized Handsets
5.2.3.3 Market Chances of WCDMA and TD-SCDMA
5.2.3.4 Handset Subsidy
5.3 Key Findings

Section 6.
INFRASTRUCTURE VENDORS LANDSCAPE
6.1 TD-SCDMA Industry Chain
6.1.1 Datang Mobile: Datang + Alcatel-Lucent
6.1.2 ZTE + Ericsson
6.1.3 TD Tech: Huawei + Siemens
6.1.4 Potevio or China Putian
6.2 Key Findings

Section 7.
MARKET FORECASTS
7.1 Forecast Methodologies
7.1.1 Subscriber Forecast Methodology
7.1.2 New Product Diffusion Model
7.1.2.1 Deriving Growth Coefficients
7.1.2.2 The New Product Conundrum
7.1.2.3 The 3G Adoption Rate Debate
7.1.2.4 Using Analogical Products as Baseline
7.1.3 Usage and Service Revenue Forecast Methodology
7.1.4 Handset Forecast Methodology
7.1.5 Base Station Forecast Methodology
7.1.5.1 Rural Coverage Calculations
7.1.5.2 Urban/Capacity-Constrained Calculations
7.1.5.3 Mobile Networks
7.1.5.4 3G Networks
7.1.5.5 3G BTS Capacity
7.1.5.5.1 Network Suitability for GSM-WCDMA Co-Location
7.1.5.5.2 Average Data Load per End User
7.2 China
7.2.1 Subscriber Trends
7.2.1.1 Usage and Revenue Forecast
7.2.1.2 Handset Forecast
7.2.1.3 Base Station Forecast
7.3 Hong Kong SAR
7.3.1 Subscriber Trends
7.3.2 Usage and Revenue Forecast
7.3.3 Handset Forecast
7.3.4 Base Station Forecast
7.4 Key Findings

Section 8.
COMPANY LIST

Section 9.
ACRONYMS
SCOPE OF STUDY
SOURCES AND METHODOLOGY
NOTES

Tables
Key Telecommunication Statistics, China
Key Telecommunication Statistics, Hong Kong
800/900 MHz Band Licensees, Hong Kong
1700 – 1900 MHz Bands Licensees, Hong Kong
1900 – 2200 MHz UMTS Bands Licensees, Hong Kong
OFTA Spectrum Release Plan, 2007/08 to 2009/10
PNETS Licensee, Hong Kong
Telecommunication Operators, China
TD-SCDMA Chipset Development, China
McWiLL vs WiMAX, Technology Comparisons
Telecommunication Operators, China
Net Profit of Telecommunication Operators, China: 1H 2007
China Mobile Subscriptions By Air Interface, 3Q 2006 to 3Q 2007
China Unicom Subscriptions By Air Interface, 3Q 2006 to 3Q 2007
China Telecom Subscriptions By Air Interface, 3Q 2006 to 3Q 2007
China Netcom Subscriptions By Air Interface, 3Q 2006 to 3Q 2007
List of Licensed Handset Manufacturers, China
Handset Market Share by Type, China: 3Q 2007
Handset Vendor Market Share, China: 3Q 2007
TD-SCDMA Industry Chain, China
Mobile Subscriptions by Air Interface, China: 2003 to 2013
Mobile Penetration Rate, China: 2003 to 2013
Mobile Penetration Rate by Province, China: September 2007
Average Revenue Per User (ARPU), China: 2003 to 2013
Mobile Subscriptions Growth and Net Adds, China: 2003 to 2013
Internet Penetration Rate (%), China: 1H 2002 to 1H 2007
Voice Usage (MoU) per User per Year, China: 2003 to 2013
Overall Messages Sent per User, China: 2003 to 2013
Handset Shipments by Technology, China: 2004 to 2013
Handset Retail Revenue, China: 2004 to 2013
Handset Wholesale Revenue, China: 2004 to 2013
Base Station Forecast, China: 2003 to 2013
Mobile Subscriptions by Air Interface, Hong Kong: 2003 to 2013
Mobile Penetration Rate, Hong Kong: 2003 to 2013
Average Revenue Per User (ARPU), Hong Kong: 2003 to 2013
Voice Usage (MoU) per User per Year, Hong Kong: 2003 to 2013
Overall Messages Sent per User, Hong Kong: 2003 to 2013
Handset Shipments by Technology, Hong Kong: 2004 to 2013
Handset Retail Revenue, Hong Kong: 2004 to 2013
Handset Wholesale Revenue, Hong Kong: 2004 to 2013
Base Station Forecast, Hong Kong: 2003 to 2013
Mobile Market Shares, Hong Kong,September 2007
Mobile Market Shares, China,3Q 2006 to 3Q 2007
Mobile Subscribers by Air Interface, China: 2003 to 2013
Net Profit of Telecommunication Operators, China: 1H 2007
China Mobile Subscribers By Air Interface, 3Q 2006 to 3Q 2007
China Unicom Subscribers By Air Interface, 3Q 2006 to 3Q 2007
China Telecom Subscribers By Air Interface, 3Q 2006 to 3Q 2007
China Netcom Subscribers By Air Interface, 3Q 2006 to 3Q 2007
Handset Market Share by Type, China: 3Q 2007
Handset Vendor Market Share, China: 3Q 2007
Mobile Subscribers by Air Interface, China: 2003 to 2013
Mobile Penetration Rate, China: 2003 to 2013
Mobile Penetration Rate by Province, China: September 2007
Average Revenue Per User (ARPU), China: 2003 to 2013
Mobile Subscribers Growth and Net Adds, China: 2003 to 2013
Internet Penetration Rate (%),China: 1H 2002 to 1H 2007
Voice Usage (MoU) per User per Year, China: 2003 to 2013
Overall Messages Sent per User, China: 2003 to 2013
Handset Shipments by Technology, China: 2004 to 2013
Handset Retail Revenue, China: 2004 to 2013
Handset Wholesale Revenue, China: 2004 to 2013
Base Station Forecast, China: 2003 to 2013
Mobile Subscribers by Air Interface, Hong Kong: 2003 to 2013
Mobile Penetration Rate, Hong Kong: 2003 to 2013
Average Revenue Per User (ARPU), Hong Kong: 2003 to 2013
Voice Usage (MoU) per User per Year, Hong Kong: 2003 to 2013
Overall Messages Sent per User, Hong Kong: 2003 to 2013
Handset Shipments by Technology, Hong Kong: 2004 to 2013
Handset Retail Revenue, Hong Kong: 2004 to 2013
Handset Wholesale Revenue, Hong Kong: 2004 to 2013
Base Station Forecast, Hong Kong: 2003 to 2013
Spectrum Allocation in China
China Unicom's CDMA Mobile Tariff Package in Zhengzhou Costs RMB0.08 (less than $0.01) Per Minute
3G/4G Roadmap
TD-SCDMA Handsets and Data Cards Exhibited during PT/EXPO Comm Exhibition 2007
China Telecommunication Restructuring in 1999, 2001
The Formation of Three Kingdoms
The Issuance of Multiple 3G Licenses
Bass Product Diffusion Model
Bass Product Diffusion Profile
Subscriber Forecasting Methodology
Historical Analysis of Operator Revenue Streams – Voice
Historical Analysis of Operator Revenue Streams – Mobile Internet Revenue
Mobile Handset Unit Sales and Revenue Forecast Methodology
Base Station Infrastructure Forecast Methodology