A UK Trade & Investment Mission to China and Korea Wireless Telecomms in China & Korea Industry Overviews Walter Tuttlebee Mobile VCE
Jan 14, 2016
A UK Trade & Investment Mission to China and Korea
Wireless Telecomms in China & Korea
Industry Overviews
Walter TuttlebeeMobile VCE
A UK Trade & Investment Mission to China and Korea
Brief Industry Overviews
Topics National Priorities Government Players & Research Bodies Telecom Operators & Manufacturers Academia Interactions – the national ecosystem
Firstly China, then Korea
A UK Trade & Investment Mission to China and Korea
China
Changing Priorities - From Little Red Book to Little Red Phone…(Sculpture in the team’s Hong Kong hotel)
Industry Overview
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
Perspective… “In October 1983 … a conference of policy leaders in Beijing
… called on China to study the concept of ‘The Third Wave’, as introduced in our book by that name”
“Since then top Chinese leaders … have strongly supported the idea that … China should simultaneously (ie alongside classic industrialisation), and as rapidly as possible, try to build a knowledge intensive economy”
Extracts from Revolutionary Wealth, Alvin & Heidi Toffler ‘The Third Wave’ was published in 1980 and was a highly prescient
forecast of the digital economy we are still only just entering1st wave – Agricultural, 2nd wave – Industrial, 3rd wave – Information revolution
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
National Priorities in Telecom Teledensity growth - from 1% (1990) to 63% (2006)
2002: The largest single geographic telecoms market
Key Imperative: Economic and Technical Independence
National Priorities: (as described by MII in 2004) 1st Provision of communications services
- to facilitate economic and social growth 2nd Growth of indigenous industry
- to reduce reliance on imports 3rd Development of own technology
- to reduce IPR costs and to create export opportunities
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
Relevant Government Agencies Ministry of Information Industries – MII
Provides strategic direction to industry, with responsibility for industry policy, regulation & spectrum management
Ministry of Science & Technology – MOST Responsible for development of China’s science & technology
base, overseeing the 863 programme, including FuTURE
State Administration of Radio, Film & Television – SARFT Regulates and controls broadcasting and content provision
National Development & Reform Commission – NDRC Higher level than the ministries, the NDRC develops national
economic and social strategies - such as the 5 year plans – which determine the framework within which MII, MOST & SARFT must operate
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
Research Bodies CATT– Chinese Academy of Telecoms Technology
‘Hard’ – product related – research Eg parent of DaTang Telecom, pioneer of TD-SCDMA
CATR – Chinese Academy of Telecoms Research ‘Soft’ research – analysis & advice Eg responsible for the 3G trials in recent years
‘Independent’ Research Bodies Eg SHWCRC – Shanghai Wireless Comms Research Centre,
independently operated, but with well-coordinated backing and support from the state, the local Government, ministries, universities, etc,
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
Telecom Operators China Mobile China Unicom China Telecom China Netcom China Satcom (smaller player) China TieTong (smaller player) (previously China Railcom)
The State has control and majority ownership of all the companies
The companies are also financed through the Hong Kong stock market – eg Vodafone owns a few % of CMCC
A “reshuffle” has been widely expected now for ~3 years
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
Infrastructure Manufacturers Huawei, ZTE, Datang have emerged as the major players
Integrated – providers of infrastructure & handsets, often using predominantly their own in-house designed chipsets
Huawei Employee ownership – unusual Export focus on the West Rapid recent growth in export sales $8bn in 2005
ZTE Export focus on developing nations
DaTang Pioneer of TD-SCDMA, poised for payback & growth
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
Handset Manufacturers Global Handset Market Size in 2006 ~ 1bn units
of which 450m were made in China A Changing Scene
2004 – proliferation of local handset manufacturers Reflecting restricted access to local sales channels, especially in
the Mid and West of China Recently, the international majors have increased local
production, aggressive brand promotion & improved distribution China Handset Market Size in 2006 ~120m, of which
Major international brands ~70% Local brands ~30%
- no company >5% - many companies 1-3% Partnerships
eg TCL-Alcatel, Bird-Sagem
…and 30m (?) ‘copy’ phones !
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
Universities A few very strong Universities in telecoms Funded by MOST through the FuTURE programme:
Future Technology for Universal Radio EnvironmentFed into the 3G TD-SCDMAFeeding into the ITU 4G standardisation process
Coordinated collaborative and competitive programme Long Term 10 year sustained funding Universities work with industry
Supplying technology (esp to Chinese companies)Learning (eg from foreign companies)
A UK Trade & Investment Mission to China and Korea
Industry Overview - China
Interactions – An Effective Ecosystem
A 2004 Perspective
A UK Trade & Investment Mission to China and Korea
Korea
A view of Seoul from the surrounding mountains
Industry Overview
A UK Trade & Investment Mission to China and Korea
Industry Overview - Korea
National Priorities in Telecom Key Imperative: Exports
ICT is 45% of Korea’s Export Income ICT, esp. telecoms, has driven Korea’s rapid economic growth
A Coordinated National Strategy – IT 8-3-9 8 new services 3 new infrastructures 9 economic growth engines (technologies)
A 5 year plan 2002-2007 Close industry-government collaboration to define & deliver Specific itemised public-private funding commitments,
broken down by technology, by year, etc With specific result targets – eg ICT export goal for 2007 etc
A UK Trade & Investment Mission to China and Korea
Industry Overview - Korea
Relevant Government Agencies Ministry for Information & Communications – MIC
Works closely with industry (and ETRI), with responsibility for industry policy, regulation & spectrum management & future evolution
Experienced, technology-literate, leadership Very active export promotion – Korea as a global testbed
A UK Trade & Investment Mission to China and Korea
Industry Overview - Korea
Research Bodies ETRI – Electronics & Telecommunications Research Institute
Founded in 1976 2,300 staff Wireless communications a core focus Claims to have spun out over 200 companies Close links with Government (MIC) Close links with industry – technology transfer (eg WiBro)
A UK Trade & Investment Mission to China and Korea
Industry Overview - Korea
Telecom Operators Wireline – KT (93%), Hanaro
Wireless – SKT (51%), KTF (32%), LGT (17%)
Mature, technologically advanced & saturated market
A UK Trade & Investment Mission to China and Korea
Industry Overview - Korea
Infrastructure Manufacturers Samsung, LG
Integrated – providers of infrastructure & handsets, often using predominantly their own in-house designed chipsets
Built their business on CDMA Diversifying effectively into 3G Strong R&D (esp Samsung)
A UK Trade & Investment Mission to China and Korea
Industry Overview - Korea
Handset Manufacturers
Serious global players, competing highly effectivelyBuilt the business on CDMA in the 1990sDiversified effectively into GSMHigh-end phones – fashion leaders, technology leadersWorld leaders now in 3G, HSDPA, Mobile TV handsets
Samsung – world #3 (4Q 2006) LG – world #5 Pantech Curitel – world #7
Supplier to Verizon, Disney MobileRecent expansion has caused cashflow problems
A UK Trade & Investment Mission to China and Korea
Industry Overview - Korea
Universities
A number of strong Universities in telecoms
Well linked into the global academic network
Well connected with ETRI & Korean IndustryUndertakes funded research for both
A UK Trade & Investment Mission to China and Korea
Industry Overview - Korea
Interactions – An Effective Ecosystem
A 2004 Perspective
A UK Trade & Investment Mission to China and Korea
Industry Overview – Common Features
Despite major differences between them…
Both countries have clearly articulated national priorities, reflected in strong industry ecosystems
Both countries make effective use of University research, pulling it through to trials and commercialisation
Research Institutes also play an important role
…now let’s look in more detail ➱
A UK Trade & Investment Mission to China and Korea