China Broadcasting Network Corp. to launch mobile network; already provides cable TV, Internet and Telecom services in China

As China state-owned telecom carriers (Unicom, China Mobile, China Telecom) prepeare for launch of 5G services, Beijing is supporting the creation of a new full-service telco by upgrading the nation’s cable network giant, China Broadcasting Network Corp.  This is evident from the flurry of initiatives from the state-owned cable TV network operator to enhance its infrastructure and emerge as a stronger entity that can join the Big Three telecom firms in their own game.

Last month, China Broadcasting, an entity set up to run the nation’s cable TV system before being awarded, in 2016, a license to operate internet and telecom services, announced strategic partnerships with CITIC Group and Alibaba Group to help speed up efforts for network upgrades.

Under the cooperation agreements, China Broadcasting, which was founded by what is currently known as the National Radio and Television Administration (NRTA), will receive assistance from CITIC and Alibaba “for integrated development and upgrading of the nation’s cable TV networks as well as related product development and management,” state news agency Xinhua reported.

China aims to make its national cable TV networks smarter and create new generation radio and TV technology infrastructure by integrating cable TV networks and letting 4K, 5G, IPv6, big data, artificial intelligence and quantum communications technologies play their roles, Nie Chenxi, the head of the NRTA, said at the signing ceremony.

China Broadcasting’s plans comes as the traditional cable TV business faces a tough challenge in the era of internet TV and streaming services, throwing up the need for operators to upgrade themselves and expand their services via two-way interactive high speed broadband infrastructure.

Currently, telecom operators like China Telecom and China Mobile are offering fiber-to-the-home or fiber-to-the-building broadband networks to provide dedicated bandwidth for each broadband line, while cable network can only adopt a share-bandwidth approach. That has made it difficult for cable networks to compete with the fiber broadband operators.

China has seen cable TV subscribers falling in number after hitting a peak in 2016. Last year, subscribers were estimated at 223 million, down 8.75 percent from a year ago. The industry has seen its profitability get constrained and profit margins decline amid the weak subscriber figures. Meanwhile, IPTV and OTT video platforms had around 150 million users in 2018.

As the industry gets reshaped, CITIC is emerging as a key player in the reform of China’s cable network. The group, as a matter of fact, is not new to telecom network deployment. It owns CITIC Guoan network in Beijing, which is expanding its cable network operation across the nation. The conglomerate is also exploring new business models by teaming up with local cable operators to operate smart community service platforms for citizens.

Such experience puts CITIC in a good position to help integrate China’s state-owned nationwide cable network into a single valuable backbone network to deliver high definition content to TV as well as mobile devices.

CITIC Group can also help ease the financial burden of the government on network capital expenditure. Though there isn’t an equity deal, CITIC’s partnership with China Broadcasting can help the latter catch up with the three big state-owned telecom carriers through a market-driven approach.

In November last year, mainland media quoted Chinese authorities as saying that they have allowed China Broadcasting to build 5G networks, a move that will allow the market to transform into a four-player battleground.  China Daily cited sources close to the Ministry of Industry and Information Technology as saying that China Broadcasting, which was formed in 2014 by combining several regional cable TV operators, was officially applying for a 5G license.  That will help boost competition in the industry that has long been dominated by three players — China Mobile, China Unicom and China Telecom.

In China, traditional cable TV service has been facing keen competition from online media services such as IPTV, OTT video as well as Internet video. Telecom operators are using fiber broadband to provide IPTV services to their broadband users, while OTT players like Youku and Tencent also dominate the screen time of Chinese users.

Amid this situation, cable TV network operators need to invest not only on the content but also the network technology to provide triple or even quad play in the market to catch up with the telecom carriers.

China Broadcasting is preparing to launch a mobile network using the 700MHz spectrum band. The spectrum is currently being used for domestic analogue television broadcasting. Now, China Broadcasting and CITIC have formed a joint venture, China Broadcasting Network Mobile, to operate a mobile business on 700Mhz band.  The joint venture is expected to receive a mobile license from the Chinese government so that they can build a network across the nation to challenge the dominance of the Big Three operators.

As the low-band 700MHz spectrum can have better network coverage compared with other frequency bands, the joint venture will be in a good position to provide better coverage for high speed mobile internet using 5G technology.  Once the 5G war kicks off, apart from China Broadcasting, CITIC Group could also effectively become a major player in the China telecom market.


One thought on “China Broadcasting Network Corp. to launch mobile network; already provides cable TV, Internet and Telecom services in China

  1. This seems to be the best solution to provide multiple communications services/quad play in China.

    AT&T, Verizon and Comcast Xfinity (wireless via MVNO with Verizon + Comcast’s WiFi hotspots) offer quad play in U.S.

Comments are closed.