Chinese telecoms operators gear up for 3G

Overall IT spending in China's telecoms industry was estimated at $3.36bn in 2006, an increase of 10.9 per cent over 2005, new research reveals.

IDC's latest report found that the overall telecoms IT market will reach $5.75bn by 2011, at which point the share of software in total IT spending will increase to 14.2 per cent and services to 34.3 per cent.

The analyst firm noted that telecoms operators in China have been playing an important role in building information infrastructure.

Amid increasingly fierce competition, the four major operators - China Mobile, China Unicom, China Telecom and China Netcom - have all implemented customer-centric transformation strategies in an attempt to strengthen corporate competence and ensure sustainable growth.

As a result of these moves, more value added services have been launched, leading to the introduction of different billing models, such as traffic-based, monthly and content-based billing, to cover voice, short message and Wap services.

"Business transformation within operators requires an integrated management of multiple resources," said Freda Tong, a senior analyst at IDC's China Vertical Research.

"However, the current network management systems are characterised by separate developments for the switch network, transport network, data network, pipeline network and power network.

"Hence converging specialised management of various resources, and providing detailed and accurate data, is a huge challenge.

"Without an integrated network management system, it would be difficult to calculate the value of resource and data, such as the correlation between resource and business data, and the status of resource occupation by users."

Tong added that, as 2008 approaches, the countdown to 3G licence issuance in China has begun, and 3G testing and the preparation for IT system development have already started in earnest.

Although no 3G licences have issued, China Mobile, China Unicom, China Telecom and China Netcom started preparing for 3G in 2006 and invested in relevant IT software and hardware.

China Mobile and China Netcom, in particular, have invested heavily in 3G technology aimed at meeting the demand for services in 2008.

• IDC Report: China Telecom Industry IT Solution 2007-2011 Forecast and Analysis