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New Technologies Increase Potential for Broadband
Growth in China
Parks Associates anticipates
a thriving market for broadband services in China, estimating the number of
users will grow to 13 million by the end of 2003.
Chinese Telecom Market: Overview and Analysis, a new report from Parks
Associates, notes that this growth is in keeping with recent trends, in
which broadband users in China grew from two million in mid-2002 to 6.6
million at year-end 2002, a 230% growth rate in six months. Moreover, the
recent commercial launch of a new broadband service based on powerline
communications (PLC) technologies may further expedite the development of
China's broadband services market.
"Important drivers of the market include the
decreasing price of broadband equipment and services, the continuous growth
of PCs and Internet users, more appealing Internet content (including
pirated movies), and heavy promotions from service providers," said
Yuanzhe
(Michael) Cai, an analyst for Parks Associates. "Also, new service
offerings such as PLC services from non-telco competitors can increase the
intensity of competition and boost the take rate of broadband
services."
These new providers will have to contend with China's
powerful telecom carriers. Chinese telcos currently dominate the broadband
market, with China Telecom in the No. 1 spot. These companies offer a
variety of access methods, including ADSL, cable modem, Ethernet + LAN, and
Wi-Fi™. ADSL, currently with more than three million users, has the
majority of the market and the best near-term growth prospects.
In comparison, FibrLINK Networks Co., a broadband
services provider controlled by the State Power Telecommunications Center,
had just finished PLC field tests in two Beijing residential buildings
before launching its PLC commercial services on April 7, 2003.
"Besides the strong background of FibrLINK, PLC
services also have technological merits,"
Cai
said. "PLC technologies use the existing power grid to transmit voice,
video, and data at high rates and could become a viable alternative for
high-speed Internet service because of the ubiquity of power outlets and the
no-new-wires advantage. But in order to compete with telcos' ADSL services,
FibrLINK has to offer comparable bandwidth and value-added services at
reasonable price points. It must also devise effective marketing campaigns
to increase consumer awareness."
FibrLINK's services are offered at a price comparable
to telcos' ADSL services. Users pay 300 yuan ($36) for PLC modems (which are
installed for free) and 100 yuan ($12) monthly for broadband Internet access
services with bandwidth between 512 kbps and 1.6 Mbps.
Chinese Telecom Market: Overview and Analysis identifies opportunities for
international service providers and equipment vendors by analyzing the
current competitive landscape, the regulatory changes in the service market,
and future strategies of the dominant carriers. The report's unique Chinese
perspective clarifies the Chinese government's thought process and agenda on
economic reforms and helps readers understand the key success factors of
doing business in China.
For additional information about Parks Associates'
Chinese Telecom Market: Overview and Analysis study, please contact Parks
Associates at 972-490-1113 or at sales@parksassociates.com.
About Parks Associates: Parks Associates is an
internationally recognized market research and consulting company specializing
in emerging consumer technology products and services. Founded in 1986, Parks
Associates creates research capital for companies ranging from Fortune 500 to
small start-ups through market reports, primary studies, consumer research,
custom research, workshops, executive conferences, and annual service
subscriptions.
The company's expertise includes new media, digital
entertainment and gaming, home networks, Internet and television services,
digital health, mobile applications and services, consumer electronics, and home
control systems and security.
Each year, Parks Associates hosts executive thought
leadership conferences CONNECTIONS™, in
partnership with the Consumer Electronics Association (CEA®), and CONNECTIONS™ Europe. In addition, Parks
Associates produces the online publication Industry Insights in
conjunction with the CONNECTIONS™ Conference series.
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