& cplSiteName &

China Mobile to Form Content JV

Robert Clark
News Analysis
Robert Clark
8/27/2014
50%
50%

China Mobile is planning to spin off its content businesses into a new joint venture (JV) partnership with a private company, signalling the latest in a series of changes to the country's tightly controlled telecom sector.

It's not the first such "hybrid" JV in Chinese telecoms -- China Telecom Corp. Ltd. (NYSE: CHA) established one with Netease a year ago -- but it's the first for the giant China Mobile Ltd. (NYSE: CHL), which now has more than 790 million customers, making it a bellwether for the Chinese industry.

China Mobile will tip its reading, games, video, animation and location-based services into the new entity once it has found a partner. Combined, these yielded more than 1 billion Yuan Renminbi (US$162 million) in revenues in 2013.

While that's just a fraction of the company's total business -- it generated RMB325 billion ($52.8 billion) in revenue in the first six months of this year -- the move is just one more sign of reform of non-core telecom services in China.

China has just three state-owned operators to serve its 1.3 billion population. The government holds them close -- senior executives are Communist Party appointees and hold the equivalent rank of vice-minister. Since taking office nearly two years ago, the Xi Jinping administration has set about making the state sector more efficient, while still maintaining ownership and control.

The biggest telecom reform has been the issue of 25 MVNO licenses to private companies, including online retailers Alibaba, Gome and JD.com. Despite high wholesale rates and stringent targets, there's no shortage of enthusiasm, with 200 companies applying for licenses.

The industry regulator, the Ministry for Industry and IT (MIIT), has also talked of introducing private investment into wireline broadband access, though so far it has made no firm decisions on the matter.

The MIIT has also persuaded the three operators to put their mobile basestations into a single company, a cost-saving move for telcos facing revenue erosion and rising network costs. (See Chinese Operators Form Tower JV.)

Additionally, the MIIT has relinquished control over retail pricing. It will still hold the final say, but operators will be allowed to adjust prices without first needing permission.

While these moves are unremarkable elsewhere in the world, they amount to a minor industrial earthquake in China, where consumers complain frequently about high prices, slow data speeds and the generous salary packages of telco executives.

Despite the reforms, there is no sign that authorities will lift the effective ban on foreign direct investment. Rather, the current scare over NSA snooping, and the apparent targeting of US IT firms by regulatory agencies, make such a move even less likely.

But China Mobile will be hoping that its public-private JV will be more successful than China Telecom's effort. Its partnership with Netease to offer an OTT-style messaging service has had no success at all in stemming the loss of business to WeChat. (See China Catches OTT Fever.)

— Robert Clark, contributing editor, special to Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Innovation at MWC: Low-Power IoT for Scottish Seal Lions

2|27|17   |   6:32   |   (0) comments


Light Reading's Liz Coyne tours the GSMA's Innovation City at Mobile World Congress 2017. A key theme of this year's event is how low-power or no-power IoT devices could become a part of our everyday lives. Imagine a world in which over 15 billion shipping pallets communicate with cellular networks down the entire supply chain. Or a parka that reveals your ...
LRTV Huawei Video Resource Center
Huawei Will Accelerate the Spread of the Video Business

2|27|17   |     |   (0) comments


What is the future of the booming video business? What changes will happen to the video industry chain in the future? Hunter Hu, VP of Huawei Video Product Line, shares his viewpoints and explains how Huawei can be an enabler and accelerate the spread of the video business.
LRTV Huawei Video Resource Center
Frost & Sullivan's Jonas Zelba on Going Beyond Connectivity

2|27|17   |     |   (0) comments


Telecom operators across the globe are trying to understand what can they offer beyond connectivity. Operators are already introducing new and innovative services but they are faced with challenges due to unclear business models. Jonas highlights that no one operator can offer all the services itself. Operators in the Middle East should look within their ecosystem ...
LRTV Huawei Video Resource Center
IDC's Paul Black on Cloudification

2|27|17   |     |   (0) comments


Paul Black from IDC shares his insights on how cloudification is expected to combile all aspects of digital transformation.
LRTV Huawei Video Resource Center
Industry Expert Michael Howard Talks About Cloud Native

2|27|17   |     |   (0) comments


Cloud Native is a really nice term and a lot of people are using it. But most of them have their own definition of what Cloud Native means. Michael Howard offers his take on the terminology.
LRTV Custom TV
4.5G Evolution: Peter Zhou on Advanced MIMO Technologies & 5G Business Prep

2|25|17   |     |   (0) comments


In the process of service transformation, operators need to catch three major opportunities and start deploying in 4.5G networks, such as video, household broadband access and digital transformation of vertical industries. 5G is coming. Operators don't need to wait for it to happen but should progressively deploy 4.5G networks by introducing 5G-oriented ...
LRTV Custom TV
What WTTX Can Deliver

2|23|17   |     |   (0) comments


Mohamed Madkour explains the benefits of WTTX while Dimitris Mavrakis discusses the challenges of delivering home broadband access.
LRTV Custom TV
Huawei on Mobile Broadband

2|23|17   |     |   (0) comments


Mohamed Madkour shares his vision on MBB for the next three years.
LRTV Custom TV
Analysys Mason Talks About the Future of Digital Operations

2|23|17   |     |   (0) comments


The future of digital operations has three key aspects: 1. Highly automated operations for both service and network; 2. Highly converged BSS/OSS for business and resources; 3. Highly merged management and control for real-time cloud native operations.
LRTV Interviews
Software Trends in the Telecom Sector

2|23|17   |   03:40   |   (0) comments


Heavy Reading senior analyst James Crawshaw talks with Telecoms.com Editorial Director Scott Bicheno about trends and developments in the telecoms software sector and what to expect at MWC 2017.
LRTV Custom TV
Huawei's Pre-MWC Analyst Briefing 2017 Highlights

2|22|17   |     |   (0) comments


Huawei shares its vision for this year's MWC.
LRTV Interviews
MWC17: 5G, Cloud RAN & More

2|21|17   |   04:35   |   (0) comments


Ovum Senior Analyst Julian Bright talks to Scott Bicheno from Telecoms.com about all things MWC, including Cloud RAN, Huawei's pitch to the industry and the road to 5G.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Uber's HR Nightmare: Company Investigates Sexual Harassment Claims
Sarah Thomas, Director, Women in Comms, 2/21/2017
Broadband Has a Problem on the Pole
Mari Silbey, Senior Editor, Cable/Video, 2/21/2017
Verizon to Start Fixed 5G Customer Trials in April
Dan Jones, Mobile Editor, 2/22/2017
Cloud Rains on HPE Earnings
Mitch Wagner, Editor, Enterprise Cloud, 2/24/2017
Verizon Fixed 5G Tests to Top 3Gbit/s?
Dan Jones, Mobile Editor, 2/23/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
No One Likes This Click Here
Take a hint!
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.