China has such strict regulations regarding broadcast and published media content that I have always questioned how network operators will manage to fill up the bandwidth created for Mobile TV, IPTV, and digital TV services in China. As China Mobile shows with its latest acquisition of 19.9% of Phoenix TV, buying out foreign content providers is one method to address that problem, albeit a very costly one. China Mobile (and other operators as well) certainly cannot afford to rely on this strategy alone, and will have to find other ways to acquire media content while following the strict restrictions as laid out by SARFT. Also, the type of content operators plan to sell must compete with the ever-flourishing pirated DVD market in China, as well as the endless amounts of free content available over the Internet.
This latest acquisition also shows how China Mobile is determined to offer more and more content directly to its subscribers (and thus taking a larger percentage of the revenue generated) instead of relying on WVAS providers such as Tom Online and Kongzhong for mobile content.
It was recently announced that SK Telecom, one of South Korea's leading mobile operators, will buy $1 billion of China Unicom bonds. As the world's second largest mobile operator, China Unicom should have all the leverage they need to negotiate favorable partnerships with other telcos worldwide. Foreign operators, meanwhile, are salivating over the growth potential of the China market and have been scratching at any opportunity to work with either China Mobile or China Unicom. It is curious to see, then, that China's operators continues to sell company stakes to foreign operators. We have seen this with China Mobile and Vodafone, China Telecom and PCCW, China Unicom with Telefonica and most recently SK Telecom. By diluting ownership, Chinese operators are giving up their leverage. What is the cause of this?
One theory is that Chinese operators are getting ready for the huge CAPEX required for 3G buildup and rollout by selling stakes of the company as a method of capital infusion. Continual government delays and policies about pushing 3G into a market that cannot support it and doesn't demand its services are possibly hurting the domestic telco industry more than it's helping it.
It has been reported that China Mobile is looking to acquire Millicom International Cellular (MIC), an international mobile operator serving emerging markets in Latin America, Africa, and Asia. It is interesting that China Mobile is opting to invest in underdeveloped markets as opposed to purchasing one of the struggling US or European operators (such as Sprint and British Telecom). Does this signify that they are confident in their in-house abilities to continue domination of the Chinese mobile market and use their China-accumulated knowledge in these emerging markets? If they didn’t feel confident in their own abilities, they would probably have chosen to invest in a US or European operator that has the experience in technology and services and management that could allow China Mobile to maintain market dominance whenever the telco operator market is opened to foreign cos.
Smartpay, one of China’s mobile payment service providers (MPSPs), has announced that they have launched mobile "Toll Stations" to facilitate mobile top-up services in China’s rural areas. "Topping up" usually refers to purchasing credit for prepaid mobile account, and is regularly done by purchasing a top-up card available at supermarkets, convenience stores, and newsstands. Smartpay is one of the companies offering top-up services remotely through the mobile network.
Wang Jing, secretary general of the TD-SCDMA Forum, an organization that promotes the technology, said: “China has put eight years of efforts into developing TD-SCDMA - the same amount of time we spent fighting the Japanese in the World War II.”
