IP Phone Hot in China ?

Edwards Finance > Phones

Q. Internet phone does not need use the traditional long distance telecom network. With the fear of heavy impact on China telecom long distance business, China Post & Telecom Bureau, the former administration bureau of China telecom, had been banning the business. However, with more open market, China Telecom was separated into 4 companies -- fixed line, mobile, paging and satellite. Besides China Telecom, Ministry of Information Industry had approved more companies to run telecom network service. In the realm of IP phone network, Only 4 companies, China Telecom, China Unicom, Jitong, China Network Communication, are allowed operation at present.

A. Although a few domestic companies have produced internet phone, domestic IP phone system is hardly seen in recent two large telecom exhibitions in Beijing and Guangzhou. Internet phone equipment is too expensive for personal usage and its voice quality is not satisfactory in China due to the bandwidth. But IP phone voice quality is similar with fixed-line. According to Dataquest, IP phone market will have a business boom in next 5 years, in 2002, US IP phone market income will reach $1.45 billion, Europe $1.64. The equal situation will also happen in China. Insider said, China Telecom had built large fixed-line network in China. He will not engage large effort in IP business, but it will not give up the large market too. China Unicom mobile phone subscribers already can directly use IP phone service from Guangzhou, Beijing, Shanghai and Tianjing to over 14 domestic cities and over 70 countries. They only need dial "17911" before normal phone number and without the need to dial long account number and password each time. For domestic long distance call, they only need pay local mobile fee plus the IP service fee which is lower than the former(RMB0.4+0.3). CNC also offers its unique IP fax service, which will meet the demand of business communities. The need for IP system is just a beginning in China market. The 4 IP service companies likewise plan to increase their network and offer easy usage and billing service to large enterprises. This trend shows large potential opportunities for equipment and solution suppliers. Since China only allows IP network operation by the 4 companies at present, the IP systems they needed are telecom level integration solution. IP phone system is more computerized than fixed-line system. For IP phone service providers, which means more resources spent in the system maintenance than module system. According to the report of Economy Reference Newspaper, all IP phone systems the 4 IP companies are using were imported aboard, especially from US. After- sales service is a key success for foreign IP phone system supplier. Therefore, cooperation with local companies will help foreign companies establish after-sales network as soon as possible. According to incompletely statistics, there are about 10 local telecom equipment companies who are developing the IP phone and system, including Zhongxing, Datang, Huawei, Shanghai Bell, etc.. If you have not got in China market, cooperation with local telecom equipment manufacturers is an alternative to access with the 4 IP companies. No foreign fund for telecom network service companies is still the current policy in China. China Unicom CCF ( China-China-Foreign fund) mode has been banned recently. But there is no ban for investment in telecom equipment manufacturers. The key application in the current 4 IP network is only voice transmission for personal users. Great deals of potential functions and applications for IP technology have not been exhumed and could be employed in the emerging business. All 4 IP companies only reach the same 10 to 14 major cities in China. If you ask me how many cities in China, I can only say I don't know. But everybody can imagine how small is the coverage.

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