wireless telecomms in china & korea industry overviews walter tuttlebee mobile vce

A UK Trade & Investment Mission to China and Korea

Wireless Telecomms in China & Korea

Industry Overviews

Walter TuttlebeeMobile VCE


Brief Industry Overviews

Topics National Priorities Government Players & Research Bodies Telecom Operators & Manufacturers Academia Interactions – the national ecosystem

Firstly China, then Korea


China

Changing Priorities - From Little Red Book to Little Red Phone…(Sculpture in the team’s Hong Kong hotel)

Industry Overview


Industry Overview - China

Perspective… “In October 1983 … a conference of policy leaders in Beijing

… called on China to study the concept of ‘The Third Wave’, as introduced in our book by that name”

“Since then top Chinese leaders … have strongly supported the idea that … China should simultaneously (ie alongside classic industrialisation), and as rapidly as possible, try to build a knowledge intensive economy”

Extracts from Revolutionary Wealth, Alvin & Heidi Toffler ‘The Third Wave’ was published in 1980 and was a highly prescient

forecast of the digital economy we are still only just entering1st wave – Agricultural, 2nd wave – Industrial, 3rd wave – Information revolution



National Priorities in Telecom Teledensity growth - from 1% (1990) to 63% (2006)

2002: The largest single geographic telecoms market

Key Imperative: Economic and Technical Independence

National Priorities: (as described by MII in 2004) 1st Provision of communications services

- to facilitate economic and social growth 2nd Growth of indigenous industry

- to reduce reliance on imports 3rd Development of own technology

- to reduce IPR costs and to create export opportunities



Relevant Government Agencies Ministry of Information Industries – MII

Provides strategic direction to industry, with responsibility for industry policy, regulation & spectrum management

Ministry of Science & Technology – MOST Responsible for development of China’s science & technology

base, overseeing the 863 programme, including FuTURE

State Administration of Radio, Film & Television – SARFT Regulates and controls broadcasting and content provision

National Development & Reform Commission – NDRC Higher level than the ministries, the NDRC develops national

economic and social strategies - such as the 5 year plans – which determine the framework within which MII, MOST & SARFT must operate



Research Bodies CATT– Chinese Academy of Telecoms Technology

‘Hard’ – product related – research Eg parent of DaTang Telecom, pioneer of TD-SCDMA

CATR – Chinese Academy of Telecoms Research ‘Soft’ research – analysis & advice Eg responsible for the 3G trials in recent years

‘Independent’ Research Bodies Eg SHWCRC – Shanghai Wireless Comms Research Centre,

independently operated, but with well-coordinated backing and support from the state, the local Government, ministries, universities, etc,



Telecom Operators China Mobile China Unicom China Telecom China Netcom China Satcom (smaller player) China TieTong (smaller player) (previously China Railcom)

The State has control and majority ownership of all the companies

The companies are also financed through the Hong Kong stock market – eg Vodafone owns a few % of CMCC

A “reshuffle” has been widely expected now for ~3 years



Infrastructure Manufacturers Huawei, ZTE, Datang have emerged as the major players

Integrated – providers of infrastructure & handsets, often using predominantly their own in-house designed chipsets

Huawei Employee ownership – unusual Export focus on the West Rapid recent growth in export sales $8bn in 2005

ZTE Export focus on developing nations

DaTang Pioneer of TD-SCDMA, poised for payback & growth



Handset Manufacturers Global Handset Market Size in 2006 ~ 1bn units

of which 450m were made in China A Changing Scene

2004 – proliferation of local handset manufacturers Reflecting restricted access to local sales channels, especially in

the Mid and West of China Recently, the international majors have increased local

production, aggressive brand promotion & improved distribution China Handset Market Size in 2006 ~120m, of which

Major international brands ~70% Local brands ~30%

- no company >5% - many companies 1-3% Partnerships

eg TCL-Alcatel, Bird-Sagem

…and 30m (?) ‘copy’ phones !



Universities A few very strong Universities in telecoms Funded by MOST through the FuTURE programme:

Future Technology for Universal Radio EnvironmentFed into the 3G TD-SCDMAFeeding into the ITU 4G standardisation process

Coordinated collaborative and competitive programme Long Term 10 year sustained funding Universities work with industry

Supplying technology (esp to Chinese companies)Learning (eg from foreign companies)



Interactions – An Effective Ecosystem

A 2004 Perspective


Korea

A view of Seoul from the surrounding mountains

Industry Overview


Industry Overview - Korea

National Priorities in Telecom Key Imperative: Exports

ICT is 45% of Korea’s Export Income ICT, esp. telecoms, has driven Korea’s rapid economic growth

A Coordinated National Strategy – IT 8-3-9 8 new services 3 new infrastructures 9 economic growth engines (technologies)

A 5 year plan 2002-2007 Close industry-government collaboration to define & deliver Specific itemised public-private funding commitments,

broken down by technology, by year, etc With specific result targets – eg ICT export goal for 2007 etc



Relevant Government Agencies Ministry for Information & Communications – MIC

Works closely with industry (and ETRI), with responsibility for industry policy, regulation & spectrum management & future evolution

Experienced, technology-literate, leadership Very active export promotion – Korea as a global testbed



Research Bodies ETRI – Electronics & Telecommunications Research Institute

Founded in 1976 2,300 staff Wireless communications a core focus Claims to have spun out over 200 companies Close links with Government (MIC) Close links with industry – technology transfer (eg WiBro)



Telecom Operators Wireline – KT (93%), Hanaro

Wireless – SKT (51%), KTF (32%), LGT (17%)

Mature, technologically advanced & saturated market



Infrastructure Manufacturers Samsung, LG

Integrated – providers of infrastructure & handsets, often using predominantly their own in-house designed chipsets

Built their business on CDMA Diversifying effectively into 3G Strong R&D (esp Samsung)



Handset Manufacturers

Serious global players, competing highly effectivelyBuilt the business on CDMA in the 1990sDiversified effectively into GSMHigh-end phones – fashion leaders, technology leadersWorld leaders now in 3G, HSDPA, Mobile TV handsets

Samsung – world #3 (4Q 2006) LG – world #5 Pantech Curitel – world #7

Supplier to Verizon, Disney MobileRecent expansion has caused cashflow problems



Universities

A number of strong Universities in telecoms

Well linked into the global academic network

Well connected with ETRI & Korean IndustryUndertakes funded research for both



Interactions – An Effective Ecosystem

A 2004 Perspective


Industry Overview – Common Features

Despite major differences between them…

Both countries have clearly articulated national priorities, reflected in strong industry ecosystems

Both countries make effective use of University research, pulling it through to trials and commercialisation

Research Institutes also play an important role

…now let’s look in more detail ➱

wireless telecomms in china & korea industry overviews walter tuttlebee mobile vce

Documents