Telecom Market Overview

China telecom market continues to grow at a solid pace. China continues to be the world’s largest and fastest growing mobile telecom market. Ministry of Industry and Information Technology (MIIT) figures show China has the world's largest mobile phone subscriber base with over 627 million users and surpassing the over 351 million fixed line users at October 2008.

Overall, communications revenue increased by 8.1% to nearly RMB679 billion from January to October 2008, compared to the corresponding 2007 period, according to the MIIT. Within that RMB679 billion figure, mobile telecom business accounted for over RMB372 billion, growing by 15% year-on-year. Fixed line subscribers decreased by 14 million households, mobile users increased by 79 million users and PHS users decreased some 10 million to 74 million.

During this period, telecom fixed asset investment rose 9.9% to RMB185 billion, compared to the previous period. The penetration rate for fixed line phones reached 27%, while mobile phone penetration reached 47%. Due to a strong outreach programme, over 99% of the country's villages now have access to fixed line services. Internet broadband access rose by over 15 million households to 82 million over the period.

China's telecom market will hit US$110 billion in 2009, according to IDC, with a compound annual growth rate of over 10% from 2005 to 2009. This growth is expected to be driven by demand for wireless data services, including streaming media, mobile games and online banking. Broadband services, including online games and IPTV, will also fuel development of the fixed line market.