China's telecommunications carriers are expected to spend 18
percent more year on year in 2007 not only on building the
next-generation network but will also upgrade the existing
networks, Analysys International said in a report Monday.
China Mobile, China Unicom, China Telecom and China Netcom are
likely to spend a total of 245.64 billion yuan (US$31.90 billion)
on capital expenditure this year, a jump of 9.7 percent year on
year, said Analysys, a Beijing-based consulting firm.
?"It is the first surge in CAPEX spending in the past three
years, with China Mobile likely to spend 20 billion yuan on the
TD-SCDMA (3G technology)," Analysys said in the report. "The annual
CAPEX was around 200 billion yuan from 2004 to 2006."
China Mobile has invested about 25 billion yuan to set up third
generation, the so-called 3G, networks in several cities including
Beijing and Shanghai, based on the home-grown time
division-synchronous code division multiple access technology.
China Telecom and China Netcom have also started building
networks in Baoding in Hebei Province and Qingdao in Shandong
Province.
But the operators are not likely to invest the major bulk of
their funds into 3G which can't give them a huge income in the
short term, industry insiders said.
China Mobile, which will invest 80 billion yuan to 90 billion
yuan in 2007, will continue to upgrade its 2G networks to provide
data services and expand its networks in rural areas, where handset
penetration rate is less than 10 percent, versus the more than 80
percent in major cities like Shanghai and Beijing, said Chen
Haofei, the general secretary of the TD-SCDMA Forum.
"The 2G and 3G networks will co-exist for a long period and it
is a wise way for carriers to prepare enough capital for the coming
3G competition," Chen added.
China Telecom will invest more on broadband and data services,
according to Analysys.
The telecom carrier's non-voice business accounted for 29
percent of the company's overall sales in 2006, a gain of?5
percentage points. Internet-related revenue, such as Internet
protocol TV and online video services, jumped 32.3 percent to 23.63
billion yuan. Broadband income rose 41.2 percent to 14.13 billion
yuan.
"We realize the irreversible trend of the mobile phone business
and the increasingly intense competition from the telecom
industry," Wang Xiaochu, China Telecom's chairman, said
previously.
(China Daily April 17, 2007)