China Broadcast Network Has Long Way To Go As Telecom Operator

Tuesday, May 10, 2016

China Broadcast Network, or CBN, has been approved by the Ministry of Industry and Information Technology to become China's fourth telecom operator. Experts say CBN has a long way to go as a domestic telecom operator, but it will benefit consumers and the telecom market in the future. CRI's Bridget Grace has more.

The new license allows state-owned CBN to provide domestic Internet data transmission and telecommunications infrastructure services.

Under the permit, CBN will enter the broadband market, a move that is expected to provide better Internet access and lower broadband prices.

But most experts say it will be hard for the company to compete with three other telecom giants - China Mobile, China Unicom and China Telecom.

Experts including Xiang Ligang say CBN hasn't acquired important licenses to provide voice services for fixed landlines and mobile phones. Xiang says, "CBN has only 4.5 billion yuan of registered capital, but to build a telecom network requires at least 300 billion yuan. Due to the insufficient funding, CBN will not be able to build a sound telecom network."

CBN has engaged in the pilot operation of broadband service in 31 provinces and more than 50 cities in China. But an obvious disparity exists compared with other telecom giants. According to the Ministry of Industry and Information Technology, the number of fixed broadband service users in China has reached 210 million, of which 10% are CBN users.

Kan Kaili, a professor with Beijing University of Posts and Telecommunications, says CBN also needs technology and funds to upgrade its network. Kan says, "The CBN network was originally designed as a one-way network to transmit television signal. Now, Internet service requires two-way networks and it will cost a great deal of funds and technology to build the two-way network. "

However, Kan says in the long term CBN will change the competitive landscape in the domestic market, "China Unicom and China Telecom dominate the current wired network service in China. CBN will break the duopoly of China Unicom and China Telecom in the future. And that will bring better Internet access and lower broadband prices, which will finally benefit consumers."

Li Yi, an expert with the Internet Society of China, says CBN has distinct advantages to compete with other telecom giants, "The greatest advantage is that the broadcast signals of CBN cover any populated area in China, while other telecom giants can't do that."

Li says CBN also has a long-term advantage to provide rich video resources. Furthermore, CBN also has unique spectrum resource of 700 megahertz, which could be best suited to provide mobile 4G network service.

The approval for CBN's entry into the telecom sector comes as Chinese authorities are pushing for the three-network convergence, which aims to provide telephone, video and data communication services within a single network. Li thinks that CBN will bring competition to the telecom market to promote the three-network convergence, as well as China's Internet development.


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