Network convergence in China: Opportunities and challenges for telecom operators

Abstract

Driven by considerable technological development such as digitalization of information and the coming together of ICT, network convergence has emerged as an important phenomenon globally. In China, recent policies about the convergence of Telecom, Broadcasting and Internet networks has produced a timeframe to speed up the three-network convergence and has shown Government's determination to remove the regulatory barriers, changing convergence from a conceptional trend to operational process. For Telecom operators, network convergence brings business opportunities but also poses challenges and forces them to face a more complicated and uncertain environment coupled with advances in technology and innovation. Failing to understand convergence in a broader perspective and detect competitive forces beyond industrial competitive boundaries may in the future lead to costly consequences. Thus, it is highly necessary to understand to which extend network convergence can affect the operators. With this purpose, this paper not only analyzes the network convergence as an inevitable trend but also with a gradual process in China from technology, market and regulatory perspectives. By focusing on the implications of the network convergence on Telecom operators in China, this paper found that change of competitors and customers behaviors are the main challenges. However, more business opportunities will be achieved by enhancing the capabilities of service offering and the expansion of market. Based on this analysis, suggestions are given to the Telecom operators in China for making convergence-oriented strategies.