Chinese Telecom Market Overview

From The Jakarta Post:

"China's early decision to deregulate the ICT (information and communication technology) sector and break up the state telecommunications monopoly into four competing firms has now turned the country into the world's largest telecom market."

"China's rapidly growing middle class, generated by an annual economic expansion of over 9 percent, has been snapping up consumer electronics, mobile phones and other sophisticated telecom gadgets, including third-generation (3G) wireless phone devices."

"The latest annual reports of China's National Bureau of Statistics showed that fixed-line phone penetration in China last year reached 25 percent (of total population) and mobile penetration 27 percent (GSM and Code Division Multiple Access).
The number of Internet users exceeded 100 million and broadband subscribers 45 million."

"Telecom operators in China are entirely domestic and comprise two big fixed-line operators with nationwide licenses (China Telecom and China Netcom), two small players (China Satcom and China Railcom) and two mobile carriers (China Unicom and China Mobile).
China Mobile operated a GSM network with 222 million subscribers as of last year and China Unicom also offers both GSM and CDMA with 84 million and 28 million subscribers, respectively, as of last year."

"Domestic makers have now gained about 50 percent of the mobile handset market, which was previously dominated completely by foreign vendors."

"Huawei, China's largest telecom equipment manufacturer, held almost 45 percent of the ADSL market, while state-owned ZTE and Harbour Networks, two other domestic makers, held 16 percent and 9 percent, respectively.
Moreover, Huawei and ZTE have developed mature 3G products and are set to win a significant portion of operators' capital investment in 3G networks."

Wikipedia Blocked in China for The Third Time

From Interfax China:

"Wikipedia, the largest multilingual open access encyclopedia on the Internet, became the target of the authorities displeasure in Mainland China recently, as access to both the English and Chinese versions of wikipedia.org have been blocked for more than one week, starting October 20. The block, preventing Internet users in China from viewing the sites, was implemented without any official statement from Chinese authorities. China's 'Golden Shield' project, sometimes referred to as the 'Great Firewall of China' allows authorities to block access to Internet content at their discretion."

""Yes, it is currently inaccessible directly from Mainland China, which should be the third time [this has happened] in the short history of the Wikipedia," Andrew Lih, a media official for Wikipedia in the Asia Region, told Interfax Friday. "All hopes are that the block will be lifted relatively soon, as ones in the past didn't last longer than a few weeks," Lih said."

Baidu's Q3 hurt by expenses

From Reuters:

"China's leading Internet search engine, Baidu.com Inc. (BIDU), said third-quarter profit nearly tripled, but shares fell 15 percent as ballooning expenses caused earnings to miss expectations.

Baidu reported third-quarter earnings of 8.5 million yuan (US$1.1 million) versus or 2.9 million yuan a year earlier. Diluted earnings per American Depositary Share (ADS) were 0.26 yuan (3 cents), compared with two analyst estimates of 4 cents per diluted ADS.
Expenses almost tripled from the year-earlier period and were up 43 percent from the previous quarter, driven by increased bandwith and marketing costs.
Revenue jumped 174 percent to 88.9 million yuan, exceeding the company's previous forecast."

Baidu Earnings Preview (Video: Piper Jaffray's Safa Rashtchy)

Piper Jaffray analyst Safa Rashtchy expects good numbers and thinks that China's Google is poised for strong growth.

Watch the video from Forbes.com.

Google Confirms Appointment of Johnny Chou as President (Sales and Business Development)

Google confirms what Chinese media reported two weeks ago: UTStarcom China President Johnny Chou to join Google China

From the Press Release:

"Johnny Chou will join Google as President, Sales and Business Development, Greater China. In this newly created role, Chou will be responsible for building Google's sales and channel businesses, and expanding the company's strategic partnerships in the region.

Chou comes to Google from UT Starcom, where he was President of the company's China Operations for the past 9 years, and brings over 20 years of diverse business management experience to Google. With the addition of Chou and the recent hire of Dr. Kai-Fu Lee, Google has brought together two of the most respected and experienced executives in China and their hire is a reflection of Google's commitment to the Chinese market.

Kai-Fu Lee and Johnny Chou will jointly oversee Google's overall operations. Chou will lead Google's sales and business development activities while Dr. Kai-Fu Lee will spearhead Google's public affairs and the creation of the company's research and development center."

Read more:
Google Gets New China Chief And R&D Center
Kai Fu Lee Follows His Heart to Googles Research Labs in China

Nokia Expects 650 mln China Mobile Phone Users by 2008

From Forbes:

"Nokia said it expects the number of mobile phone users in China to rise to 650 mln within three years, up from around 370 mln now, the China Daily said."

"(...) Nokia is ready to introduce ultra low cost handsets to China that offer only basic functions such as phone calls, messaging and black-and-white screens, which could be sold for as little as 30 usd. It did not say when the handsets would be launched."

Read more:
Nokia and China Putian in 3G Joint Venture
Alarm Bells Ring for Chinese Cellphone Makers
China's Biggest Cellphone Maker, Ningbo Bird, Plunges into Red

Three Chinese Technology Firms Headed for Nasdaq IPOs

From MSN Money:

"Three Chinese technology firms are readying initial public offerings on the Nasdaq worth a combined $500 million or more by the year's end, seeking to capitalize on strong demand for China plays on global markets."

"On Monday, chip designer Actions Semiconductor and chip maker Vimicro International filed for separate IPOs worth up to $225 million and $100 million, respectively.
A third company, solar energy equipment maker Suntech Power, is planning a roughly $200 million IPO on the Nasdaq by the end of the year, according to a source familiar with the situation."

IPTV Asia Forum: Programme

Homepage: IPTV Asia Forum
Programme: iptv_asia_forum_2005.pdf

Baidu and Hurray! Test New Business Model for Music Downloads

Interfax China reports that Chinas most popular search service provider Baidu (Nasdaq: BIDU) and wireless value added service provider Hurray! (Nasdaq: HRAY) have partnered to jointly release a pop music single on the Internet and through mobile value-added services.

"The single will be released and promoted on the Internet and mobile network instead of via traditional CDs so as to avoid piracy problems," Du Hua, spokesperson from Hurray! told Interfax Monday.

Baidu will provide a link to the song on its MP3 search website. The song will just be available as a high quality ringtone and cannot be downloaded to PCs. Users will be able to pay for the song via their mobile phones.

The new track song by Chinese pop star Chen Hao will be the first song ever solely released through the internet in China.

Dell China Bundles PCs with Netease Online Games

China Knowledge reports that Dell China will bundle its desktops and laptops with online games and free game time.

Dell has partnered with Chinese online game leader Netease and will package "Journey to the West Online II" and "Fantasy Journey to the West" with Dell PCs. These two titles are currently ranked first and third respectively in the Chinese online gaming market, and are Netease’s main revenue stream.

In addition to the free games any customer who buys a Dell computer in China within the next three months will receive 1,000 hours of free game time.

Analysys International Predicts China's IPTV Market Will Explode

From Analysys International (Press Release):

Analysys International announced today they predict that Internet Protocol Television (IPTV) will become the next global industry, with a potential market of 200 billion RMB, while the China IPTV market will mature into a huge market, reaching 16.7 billion RMB (1 usd = 8.1 yuan) in revenue and 16.65 million in the predicted number of users by 2009. Its newly released Focus Report on IPTV China-2005 helps dispel misconceptions that this industry that is full of obstacles and provides high-valued results for business models based on a thorough understanding of the industry.

'Uncertainty of regulations, insufficient hardware platforms, long-term obstacles of an immature value chain and unclear business models are the main concerns of key players,' according to Analysys International's study, 'But despite all these obstacles, users of IPTV in China will reach 1.17 million by the end of 2005; 2007 will be a year strong growth year for IPTV users and finally the growth rate will slow down, reaching 16.65 million users by the end of 2009.'

More IPTV Trials in Chinese Cities

From ChinaKnowledge:

"The number of cities in which China Telecom cooperates with Shanghai Media Group (SMG) in the commercial trials will expand to 23. IPTV trials were previously conducted by China Telecom and SMG in 17 cities and provinces, including Shanghai, Guangdong, Zhejiang, Jiangsu and Shanxi. By the end of this month, China Telecom will conduct commercial trials in Sichuan and Fujian. China Netcom will also cooperate with SMG to increase the number of cities under IPTV trials to about 20."

Read more:
China Awards First IPTV Licence to Shanghai Media Group
China IPTV Leader by 2010
IPTV in China: PCCW’s "Now TV" has over 440,000 Subscribers
China Telecom And China Netcom To Begin IPTV Trials
UTStarcom's 3G and IPTV Plans

Statement from eBay Regarding Taobao's Pricing Challenge

From eBay (Press Release):

SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 19, 2005--eBay (Nasdaq:EBAY) today issued the following statement regarding Taobao's pricing challenge:

"Free" is not a business model. It speaks volumes about the strength of eBay's business in China that Taobao today announced that it is unable to charge for its products for the next three years.
We're very proud that eBay is creating a sustainable business in China, while providing Chinese consumers and entrepreneurs with the safest, most professional, and most exciting global trading environment available today.

Read more:
Chinese Auction War: Taobao.com to be Free of Charge for Three More Years

Interview with China's Dotcom Guru Jack Ma

From CNN.com:

"Jack Ma: China Internet growth is interesting because of (the popularity of) SMS and because of online gaming. I don't believe SMS will save the Chinese economy, I don't believe online gaming will change the China economy, but e-commerce, I believe will. E-commerce for the small to medium sized companies, e-commerce for Chinese companies to export overseas, e-commerce (for) helping foreign companies come to China -- that will be the future, that will be the chance to change the economy and change the fate of the economy. So I think this is the value I want to create for the small to medium sized companies in China, in the world, to give them more opportunities."

"Lu Stout: But now you are not only running Alibaba but Yahoo China, which is known as a media company, a communications company. (...)

Jack Ma: Well, I think when we run Yahoo China I don't want to make this thing a media thing. Leave the media for (Chinese Internet companies) Sina and Sohu to do it. We just concentrate on e-commerce. I don't think it's a sacrifice. For us we just do something which we are strong at, do something which is proper into China and leave the sensitive things to the other people."

Read more:
Powerful Jack Ma
China's New Internet King: Alibaba CEO Jack Ma

China Angry at Google Map

From BBC News:

"China has reacted angrily to a decision by the internet search engine Google to stop calling Taiwan a Chinese province.

Google deleted the words "a province of the People's Republic of China" from its Taiwan map after complaints from pro-independence groups on the island.
A Chinese official in the US told state media he was disappointed at the move.

Taiwan has a tense relationship with Beijing. Many Taiwanese see the island as a separate country, although Beijing sees it as part of Chinese territory."

Read more:
Taiwan Protests over Google Map

Chinese Auction War: Taobao.com to be Free of Charge for Three More Years

From Yahoo Finance (Press Release):

"Alibaba.com announced today that its Taobao.com Chinese-language consumer auction site will remain free for buyers and sellers for three more years, until at least October, 2008. In addition, Alibaba.com will invest US $120 million to further grow Taobao.com's trusted e-commerce marketplace with the goal of creating one million jobs for entrepreneurs in China."

"In addition to its pledge to make Taobao free until October 2008, Taobao.com called on Ebay to join Taobao in making its services free for Chinese users. "We call on Ebay to do what's right for this phase of China's e-commerce development and make your services free for buyers and sellers in China," said Jack Ma, CEO of Alibaba.com. "Cutting prices is not enough -- it's time to make your services free and affordable for all of China's entrepreneurs and consumers." "

Shanda Releases Mobile Entertainment Product EZmini

Shanda and Taiwanese PC maker Mitac jointly developed a new mobile entertainment product called EZMini in an attempt to compete against Nintendo and Sony. The EZmini uses Intel’s XSCale 416MHz CPU and has a 320x240mm LCD screen, 64MB of ROM, 256MB of FlashRAM, and supports WIFI and Bluetooth.

Users can play Shanda's online games, search and download online resources, watch movies, listen to music and read e-books on EZmini.

The EZMini is claimed to be the first handheld internet entertainment system in the world.

Source: Shanda Interactive

Cisco Opens China R&D Centre in Shanghai

From Forbes:

"US Internet and communications-equipment maker Cisco Systems Inc has opened its first research and development (R&D) center in Shanghai, the Shanghai Daily reported. The opening comes ahead of expected heavy spending by China's communication providers on the development of third-generation telecommunications networks.

The investment for the Cisco China R&D Center will reach 32 mln usd within the next few years and more than 100 staff are already working for the center in the initial stages, the paper said, citing company officials."

Read more:
Cisco Sees China as No. 2 Market in 10 yrs

China's 3G debate - Interview with Stephen Falk, VP of Sprint

From Interfax China: China's 3G debate - Interview with Stephen Falk, VP of Sprint

Nokia and China Putian in 3G Joint Venture

From Reuters:

"Mobile phone group Nokia announced a $111 million China technology tie-up on Thursday, in a new venture boosting a home-grown Chinese standard in the world's biggest mobile market.
Nokia signed an agreement with China Putian Co. Ltd. to set up a joint venture to focus on 3G network systems using WCDMA as well as China's own TD-SCDMA technology, giving a strong boost to the Chinese standard.
China wants to develop the TD-SCDMA standard both to foster development of its own telecoms sector and also to avoid costly royalties associated with equipment and handsets for the world's two major 3G standards, known as WCDMA and CDMA 2000."

"The groups will invest a total of 900 million yuan ($111 million) in the venture, with Nokia holding a 49 percent stake and Putian the rest."

Read more:
Overview of Chinese 3G Licence Opportunities
China's Locally Developed 3G Standard Fares Poorly in Tests
3G Deployment Delayed in China
China’s 3G Standard TD-SCDMA Blooms

China’s Online Auction Market Growing Rapidly

From ChinaKnowledge:

"Online auction site, Taobao.com, announced Wednesday that the value of the company’s third quarter transactions amounted to RMB 2.34 billion, a 41% increase from the previous quarter.

Taobao.com’s trading value in the first and second quarter reached RMB 1.02 billion and RMB 1.65 billion, respectively. This makes the free online auction site one of the fastest growing e-commerce websites in China. Ebay China, Taobao.com’s rival, refused to disclose its trading value in the second and third quarter.

China’s online auction market is growing rapidly – its total trading value increased 217.8% to RMB 3.4 billion in 2004 and is expected to grow 84% in the next three years."

China Net Investor: Taobao.com is the consumer auction site of China's largest e-commerce site Alibaba. (Yahoo has a 40 percent stake in Alibaba)

Read more:
Alibaba To Acquire Sina.com Stake In 1pai.com
Is eBay Dead in China?
Fact Sheet on the Alibaba-Yahoo deal

Two Netheads in Top 5 of 2005 China Rich List

Top 5 of Hurun Report 2005 China Rich List


1. Huang Guangyu
Wealth: USD 1.7 bln
Company: Eagle Investments
Age:36
Main industries: Household appliance retail, Beijing property



2. Yan Jiehe
Wealth: USD 1.5 bln
Company: China Pacific Construction Group
Age: 45
Main industries: Civil construction


3. Timothy Chen Tianqiao
Wealth: USD 1.45 bln
Company: Shanda Networking Development
Age: 32
Main industries: Online Games and internet portal


4. William Ding Lei
Wealth: USD 1.25 bln
Company: NetEase.com Inc
Age: 34
Main industries: Online Games and internet portal


5. Xu Rongmao
Wealth: USD 1.2 bln
Company: Shimao Group
Age: 55
Main industries: Property


Source: Hurun Report

Focus Media Partners with Ebay's Kijiji.com

From ChinaTechNews:

"Focus Media (FMCN) has entered into a strategic partnership with Kijiji.com, a wholly-owned online classifieds listing service of eBay, to jointly explore the classified advertisement market oriented at middle and small enterprise clients in China.

Starting in November, Focus Media will release the classified ads from Kijiji at the bottom of Focus' crystal liquid screens across Shanghai. These displays are often found near elevators and entrances to office buildings, residences, and restaurants."

Read more:
Three of the Top Five Tech IPOs in Third Quarter from China

Google Strengthenes China Subsidiary Management

From interfaxChina: UTStarcom China President Johnny Chou to join Google China as Co-CEO

"Johnny Chou, President of NASDAQ listed UTStarcom China subsidiary is said to join Google soon as the company's Co-CEO in China, according to report from Chinese news portal Sina.com this Tuesday.

The news portal said, citing an internal source from Google, that Chou would probably be appointed as either Co-CEO or Co-President to work together with Lee Kai-Fu, with his major focus on sales and marketing in China."

"We have not got any official statement about this appointment," said Zhang Junwei, PR representative with Google China."

Read more:
Google's China Situation Better Than You Might Think
Kai Fu Lee Follows His Heart to Googles Research Labs in China
Google Gets New China Chief And R&D Center

China Internet Network Information Center: China Online Search Market Survey Report (PDF file)

Powerful Jack Ma

From ShanghaiDaily:

"Thanks to a US$1 billion investment from Yahoo! China, Jack Ma, the founder of Alibaba.com is not just one of the richest men on China's mainland, he is also one of the most powerful. The 41-year-old is listed sixth on British researcher Rupert Hoogewerf's list of the most powerful people on the mainland — a list that only includes business owners. The list, which will be published in Hoogewerf's business magazine "Hurun Report," is drawn from his annual China rich list, which will be released tomorrow."

" "We never expected Yahoo! would put all its resources in China into Alibaba. It is probably the largest single transaction that has ever happened in China," Hoogewerf told Shanghai Daily. Alibaba's transaction with Yahoo! is reportedly worth more than US$4 billion."

Read more:
China's New Internet King: Alibaba CEO Jack Ma

Alibaba To Acquire Sina.com Stake In 1pai.com

From ChinaTechNews:

"Following the successful acquisition of Yahoo's property in China, Alibaba has now turned its eyes to 1pai.com, an online auction venture between Yahoo China and Sina.com in which Sina.com holds a 33% stake.

When Alibaba acquired Yahoo China, it did not include 1pai.com in the deal. So currently, the only asset of Yahoo China that does not belong to Alibaba is the 33% of stake held by Sina.com. Insiders tell local media that Alibaba is in negotiation with Sina.com on the purchase of that, but the two sides have not reached a final agreement. Nor have they disclosed the price of the transaction."

Read more:
Alibaba to Set up European Headquarters in London
Is eBay Dead in China?

Fact Sheet on the Alibaba-Yahoo deal

Chinese Sex Blogger Muzi Mei Challenges Authorities

Sex Books - Bestsellers on Amazon
Sexy Girls on DVD

From The British Telegraph (via China Herald):

"Tens of thousands of Chinese web surfers have been introduced to a new internet craze by the country's notorious online sex diarist, a writer known as Muzimei.

As if running her intimate weblog describing her promiscuous encounters with more than 140 strangers were not enough, 27-year-old Li Li has now gone one step further.

In a challenge to authorities in the tightly controlled communist state, she has begun posting the sounds of her half-hour love-making sessions on her website.

More than 50,000 people downloaded one of her first attempts at such "podcasting" - a method of broadcasting sound over the internet that has recently taken off across China - to hear her bedroom encounter with a stranger, a soundtrack consisting of a mixture of polite chitchat and grunts and groans."

Book:


Banned in China, Muzi Mei's sex diary (book version) has been translated in French and published by Albin Michel. The title in French is Journal sexuel d'une jeune Chinoise sur le net. (Sex Diary of a Young Chinese on the Net).

Other Books:
Youth Sex Culture and Market Reform in Shanghai

China to Develop Its Own DVD Format

From CRIonline:

"For the second time in two years, China has announced plans to develop its own next-generation DVD standard to break the monopoly of foreign companies and avoid paying heavy licensing fees.
If successful, the move could add a new wrinkle to the battle between HD DVD and the competing Blu-ray Disc formats over which will become the dominant new DVD standard.

The official Xinhua News Agency said the new standard will be based on but incompatible with HD DVD, which is being promoted by Toshiba Corp. and Universal Studios, as well as Intel Corp. and Microsoft Corp., the leading suppliers of chips and software for most of the world's personal computers."

"China began developing its own DVD standard in 1999, rolling out EVD, or enhanced versatile disc, in November 2003 with a vow to shake off dependence on foreign standards. Despite strong government backing, the initiative fizzled amid a legal battle between the technology's developer and a consortium of Chinese player manufacturers. Protoype EVD players were introduced in 2004 but never established a presence in the market."

Largest Linux Desktop Roll-Out in China's History

From LinuxElectrons: Sun Wah Linux Chosen by Chinese Government for the Largest Linux Desktop Roll-Out in China's History

"Six PC makers, including Haier and Founder, announced yesterday that they have won contracts to provide a total of 141,624 PCs to the Jiangsu Provincial Department of Education for an educational program called, "School-to-School Project." At the same time, Sun Wah Linux's Debian-based Chinese Operating System RAYS LX was also chosen as the operating system used in all 141,624 PCs."

"Through the School-to-school project education campaign, approximately 90% of schools in China will be connected via the Internet by 2010, subsidized by the Ministry of Education. In a nutshell, this initiative is prompting schools to become computerized by adopting price competitive advanced technologies and quality products. The campaign is proof of the Chinese government's commitment in lifting the standard and quality of its education through the use of information technology.

With more than 140,000 PCs, the 2005 Jiangsu School-to-School Project is the largest-ever purchase project in China Education Industry, which is also the biggest government purchase project this year. In addition, the deployment of Sun Wah Linux's RAYS LX marks the largest-ever Linux deployment in China."

CDC Corporation (China.com) Acquires Casual Online Games Platform in China

From Yahoo Finance (Press Release):

"CDC Corporation (Nasdaq: CHINA) today announced it signed an agreement to acquire gametea.com ("Gametea"), a leading online casual games platform in China through its 81%-owned subsidiary, China.com Inc. Gametea currently offers its 10 million registered users over 80 online board and poker games. It has an active user base of over 1 million and its game portal reaches a concurrent user base of close to 90,000 during recent peak periods."

China Net Investor: This Acquisition underlines that China.com is getting serious about building a games business. China.com earlier this week announced that its MMOG Yulgang has amassed a massive audience of 9 million registered players, just two months since its launch.

Read more:
Yulgang Amassed 9 Million Registered Players in Two Months

Lenovo Bundles StarOffice

From cnet News.com:

"Google isn't the only one jumping on the Sun software bandwagon, it seems. Late last week, China's Lenovo Group said it will bundle Sun's StarOffice 8 software in Lenovo's latest ThinkPad R51e notebook. The offer is only good in Singapore, however, according to representatives with both companies.

StarOffice 8, which is based on the open source OpenOffice.org, comprises five parts: StarOffice Writer, Impress, Calc, Base and Draw. It also can convert Microsoft Word, Excel and PowerPoint documents."

Three of the Top Five Tech IPOs in Third Quarter from China

From Red Herring: China’s Weight Felt in Q3 IPOs

"Three of the top five tech IPOs in the third quarter came from the Middle Kingdom.

The third quarter saw the most venture-backed IPOs of the entire year and the biggest winners were high-tech companies. Most notable? Three of the top five tech offerings were Chinese companies going public on U.S. exchanges."

"Baidu.com was the best-performing new issue of the third quarter. It closed the quarter at $64.02, a 137 percent return on its August 5 offering price of $27. Baidu rode the Nasdaq bull to $122.54 in its debut—a first-day gain of 354 percent—even as skeptics predicted it would slip to a more realistic level."

"China’s Focus Media Holding sells advertising on flat-screen TVs for high-traffic areas. It offered shares at $17 and closed its first day up 18.8 percent to $20.20. It further improved from its July 13 offer date, to close the quarter up 57 percent to $26.74."

"China Medical Technologies, based in Beijing, makes medical devices for treating cancer. Its devices use a technology called ultrasound-guided ablation to treat tumors. The company had net income of $14.3 million on $26.2 million in sales for its fiscal year, which ended in March."

Read more:
Quotes on the Baidu (BIDU) IPO

Taiwan Protests over Google Map

From BBC News: Taiwan protests over Google map

"Taiwan has asked the internet search engine Google to stop referring to the island as a province of China on its map web site.

The foreign ministry is demanding a correction, saying it has had no response to an earlier call for an amendment nearly a month ago. Legislators from the pro-independence Taiwan Solidarity Union are urging the public to e-mail Google in protest. They want the company to refer to Taiwan as an independent state."