Abstract

Chinese telecoms are opting for different strategies regarding WiMAX. But overall, most are only in the initial, small-scale trial phases or even observational phases. This is caused by limitations arising from government policies, business models, and the competitive environment.

In terms of government policy, the MII has not yet allocated bands for WiMAX. It originally planned to use 3.5GHz for wireless broadband, but never clearly expressed whether this could be applied to WiMAX. This has caused telecoms to have conservative attitudes. At present, 3.5GHz can only be used for small-scale trials.

In terms of technology, WiMAX is still new - especially the new 802.16e for which many telecoms have high expectations. Technology and product certification are still underway. The overall market scale is still small and has yet to attain economies of scale, making current network and equipment costs relatively high.

In terms of operation models, WiMAX is an entirely new technology for telecoms. There are few business models to refer to, and therefore telecoms are still in the process of searching for the right model.

Looking at the competitive environment, China has been continuously working hard through recent years to develop the 3G standard TD-SCDMA. It has undertaken large-scale network construction since the beginning of 2007, and government authorities are placing emphasis on TD-SCDMA. Telecoms are also focusing resources on obtaining 3G licenses and therefore WiMAX development has slowed down.

However, in Beijing, Hubei, Jiaxing, and Tianjin the government is directly or indirectly participating in the construction of WiMAX networks. The goals of the different projects vary, some being for services during the Olympics, some being specific technology projects, and others aimed at solving information problems in rural areas. Although the scale of these projects is not large, if business operations prove successful it will have a positive impact on the development of WiMAX in China and other regions.

In the future, once WiMAX products are sufficiently mature, when 3G licenses are issued in China, and when the restructuring of telecoms advances, and when the frequency spectrum policy for WiMAX will be confirmed, telecoms could be able use this technology on a larger scale to provide services. Regions in China where telecommunications networks are relatively underdeveloped, such as rural areas in Western China, could adopt WiMAX services. Also, new telecoms such as CETC-Chinacomm and Airway could use WiMAX technology as a way of differentiating themselves from other companies. They could focus on broadband access and related services.

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