A WHOLE new world opens up for consumers as China's telecommunications industry reorganization will see the issue of 3G licenses finally, a more balanced market competition, possible lower telecommunication costs and a feast of opportunities for telecom equipment makers.
And it's not just hype. The industry revamp will influence, more than expected, the push toward fixed line and mobile phone convergence which had been talked about for so long but little was done to bring it to reality, analysts said.
As early as next year, each consumer will need only one number, or user account, no matter where he is - at office, at home or in a metro train. People can choose Wi-Fi or 3G (third generation) networks to access to the Internet when going shopping.
The telecom reorganization will speed up the fixed and mobile convergence and the convergence of 3G and Wi-Fi on outdoor wireless broadband services, said Lu Guoying, an analyst at CCID Consulting.
Under FMC, consumers can buy both mobile and other telecom lines from the same vendor and have it all on one bill. For enterprises, buying voice, data network and mobile from the same carrier provides the promise of savings as a direct result of the economic leverage gained from paying a huge bill every month.
The new China Telecom (which includes China Unicom's CDMA business) will have the capacity to offer full-scale services and it will bundle fixed-line and mobile services (after the reorganization), said Wang Xiaochu, the general manager.
The new China Unicom (which includes China Netcom's fixed-line business) will be able to launch FMC services, according to Chang Xiaobing, the chairman.
The reorganization has established the bridge or laid the foundation for the fixed-line phone carriers to launch one-number-for-call services in the mobile sector. Some of China Telecom's enterprise clients have adopted the one-number-in-different-offices service.
"The new carriers, especially China Telecom, have rich resources of enterprise clients and FMC will challenge market leader China Mobile," said CCID's Lu.
To consumers, packed FMC services have great cost advantage as well as the convenience of the service, Lu added.
China Mobile, which acquired China Tietong's fixed-line business, will also quicken the pace of the broadband network coverage, which can be integrated with its strong mobile business, said Sandy Shen, an analyst at US-based Gartner Inc.
"China Mobile has considerable capital flow and fiber optic cables, which provide much faster online surfing experience than China Telecom's and China Netcom's services," Shen said during a phone interview.
Industry insiders said the new China Telecom and the new China Unicom have an opportunity, for one to two years, to catch up with China Mobile.
"China Mobile's dominant position is unlikely to change at least within the next one to two years," said Li Jinqing, analyst at Fitch Ratings. "With an ability to internally fund large and increasing levels of capital expenditure on its network, China Mobile sits in a better position compared with its competitors."
The 3G licenses are another area of considerable interest and it is believed they will be issued after the reorganization.
"The easy and convenient wireless Internet access will become the killer application then. The carriers have to construct Wi-Fi hot spots, along with 3G network, as quickly as possible," said Lu.
In Shanghai, the number of wireless hot spots will exceed 3,600 by the end of this year.