Transcript China and SE Asia

China and SE Asia
China - Bill Harding & Glen Heller
Philippines - Marcelino Racoma
Indonesia - Riandy Hendrawan
Thailand - Russ McGuire
China
Environment
Population: 1,246,871,951
 4th Largest Nation
 Literacy Rate: 81.5%
 Move from centrally planned economy
to market-oriented
 Within framework of Communist party

Economy
Quadrupling of GDP since 1978
 GDP per capita: $3,460
 Opening up to foreign trade and
investment
 Major trade partners: Honk Kong, U.S.,
Japan, South Korea, Germany
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Role of Telecom
Growth of telecom instrumental to
economic development
 China’s Strategy

– Import of technologies
– Establishment of joint ventures
– Domestic development
Technology transfer for access to
market
 Buy local policy
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The Players
Local providers: China Telecom, China
Unicom
 Joint ventures
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– Beijing Nokia, Beijing Ericsson
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Fierce competition in mobile market
– Motorola, Ericsson, Nokia, Nortel
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Japan’s NEC providing advanced trunk
telecom network
Infrastructure
One of most dynamic markets in world
 112 million telephones at end of 1998
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– 87 million fixed line, 25 million mobile
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Growth rate in 1998
– 24% fixed line, 88% mobile
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Telecom service sector growing at 48%
annual clip
Teledensity
1999
1998
1997
1996
National 12.9
10.6
8.1
6.3
Urban
27.7
26.1
22.4
29.0
Mobile System
25 million users, third largest in world
 60% of telecom investment to cellular
market
 Cellular penetration 2%
 Key users are business people and
young people
 Design important
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Transmission Media
Interprovincial fiber-optic trunk lines
 Cellular systems
 Domestic satellite system
 International satellite system
 Fiber-optic links to Asia countries
 Buildout of broadband
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Use of Internet
324% growth in 1999
 75.6% under 30 years old, 79% male
 50% access from home, 37% access
from school or work
 Government pushing development
 20 million people access by 2003
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Opportunities/Threats for
Foreign Companies
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Opportunities
Low penetration
Need for advanced
technologies
Increasing
government
investment
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Threats
Aggressive domestic
manufacturers
Buy local policy
Technology transfer
for market share
Telecom Standards
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Total Access Communication System– European Standard est in China @ 1987
– Analog cellular telecom network
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Analog sales have slumped since ‘94 as users
move towards GSM networks
Global Systems Mobil (GSM)
– Began in ‘94 when Unicom established
– Provided nations first digital GSM network
More Standards
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Code Division Multiple Access (CDMA)
– 4 international companies are currently
allowed to operate pilot projects with this
technology in 4 chinese cities, Lucent in
Guangzhou, Motorola in Beijing, Nortel in
Xi’an and Samsung in Shanghai
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Despite success China’s Ministry of
Information Industry has not allowed
the commercial deployment of CDMA in
China
Providers of Local and Global
Telecom
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China Telecom - run by Ministry of
Information Industries
– Provincial subsidiaries
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Guangdong Telecom-largest telecom operator
in China
Guandong is the most affluent and
technologically advanced in China
– Beginning to rival AT+T as the largest
provider of telecommunications services in
the world
Local + Global Providers
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China Unicom - domestic rival to China
Telecom
– More flexible and customer oriented
however reliability is often questioned
– Only have 5% of national market
Local + Global Players
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Ji Tong Communications
– Niche player - building a nationwide
backbone
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Links networks belonging to government
ministries, universities, research institutes and
state owned organizations as part of a value
added network (VAN)
Government Regulation
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As of ‘97 meeting of Ninth Party
Congress changed who was in charge of
telecom policy
– March ‘98 the Ministry of Post and Telecom
(MPT), Ministry of Electronics Industry
(MEI), and parts of the ministries handling
aerospace and radio and TV were merged
to create the Ministry of Information
Industries (MII)
Partnerships for Advancement
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Post + Telecom Administrations (PTA’s)
– Wary of foreign investment
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There is realization though that foreign
products and technology are needed in order to
allow local companies to participate in the
global information age
– Fuels desire for joint ventures with technology
transfer
Policy Liberalization
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Developing communications
infrastructure
– Leaders in MII concede that it may take 20
yrs before domestic companies catch up
with the world
– Feared that the Ministry may do more to
close the market and protect Chinese
companies rather than liberalize policies
China’s Foreign Investment
Laws
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Preference given to sourcing locally
– Products produced by joint ventures in
China must contain 60% local content in
order to qualify as domestic products
Future role of Telecom
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China as a B2B, B2C player
– Country in general suffers from a dearth of
PC’s which is seen as a huge potential
stumbling block
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Only 10% of large and medium sized Chinese
firms are now online
However, most Chinese business people carry a
mobile or a pager
– Planning a system which could send B2B purchase
inquiries via mobile devices to 2 m manufacturers
Growth
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Internet use grew at 324% in 1999
– In ‘98 there were 2.1 m users, by the end
of ‘99 there were 8.9m
– Chinese government expects that over 20m
people will have internet access in the
country by 2003
The Philippines
Background
Archipelago
consisting of over 7,100
islands and islets
Includes
over 50 ethnic groups of
Spanish, Malay, and Chinese
descent
Mountainous
with narrow to
extensive coastal lowlands
Social, Political, and Economic
Environment
Struggle
to regain independence
and freedoms
Unitarian
Republic with strong
return to democracy
Improving
the overall economy
Technological Infrastructure
Teledensity
4.6 per 100 persons,
increase of 3% from 1995
Development
of the the Philippine
Information Infrastructure (PII)
Turn
the Philippines into the Knowledge
Center of Asia within the first decade
of the 21st century
TeleCom Standards and
Service Providers
Department
of Transportation
and Communications (DOTC)
National
Telecommunication
Commission (NTC)
Philippine
Long Distance
Telephone Company (PLDT)
Gov Regulation and Private
Partnerships
Membership
Oracle
in the ITU and ISO
Academic Initiative
RPWEB
Future Role of
Telecommunications
Deregulation
Satellite
and privatization
competition
Philippine
IT City
Indonesia Telecommunications
Map
Social
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Estimated Population : 220 million
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Literacy rate : 83.8%
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Religion : 88% Islam, 10% Christian,
& 2% others
Economic
Agricultural industry
 Some high technology industry
 1997-present: economic crisis
- unhealthy banking sectors
- untenable levels of private foreign debt
- uncompetitive business practices
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Telecommunications Infrastructure
Telephone :
- 25 per 1000 people
- Domestic : fixed wireline, microwave
- International : fiber optic submarine
cable, satellite
 Mobile phone :
- 5 per 1000
- Global System for Mobile (GSM)
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Telecommunication Infrastructure
- Advanced Mobile Phone System (AMPS)
- Nordic Mobile Telecommunications (NMT450)
 Paging
- 700,000 subscribers
 Satellite
- Coverage of most Asia and some
Australia & New Zealand
Telecommunication Infrastructure
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Internet
- First available in 1995
- Dial-up 56 Kbps, ISDN, cable modem
- Active providers: 30
- 250,000 subscribers
- PC’s owner : 8 per 1000 people
Service Providers
Domestic wireline (monopoly)
- Telkom Indonesia: gov
 Domestic wireless (duopoly)
- Telkom & Ratelindo: private
 International Gateway (duopoly)
- Indosat: gov
- Satelindo: private
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Cellular Providers
GSM
- Telkomsel, Satelindo, Excelcomindo
 NMT-450
- Mobisel
 AMPS
- Komselindo, Metrosel, Telesera
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Government Regulations
Ministry of Tourism Art and Culture
- Directorate of Post & Telecommunications
 Telkom Indonesia remain for domestic and
domestic long distance
 Deregulation
- Privatization Telkom (domestic) &
Indosat (int’l)
- Competition for other telecom markets
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Future Role
Potential market
 Improve business sector & education
 Dilemma facing economic crisis
 Modernize Infrastructure
- establish backbone to connect all
islands
- telephone line, wireless, internet
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Thailand Telecommunications
MAP
Social, Political and Economic
Environment
Geography
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514,000 square kilometers
Tropical climate
Borders Burma, Laos, Cambodia and Malaysia
Population
 60,000,000
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94% literacy rate
35% domestic savings rate
Economic Environment
Government
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constitutional monarchy
very progressive since 1800’s
Economy
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one of the most advanced in SE Asia, but the
devaluation of the baht triggered a financial
crisis in 1997
current 2% economic growth rate 1999
service and export oriented
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GDP $119 billion
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Technological Infrastructure
Domestic Teledensity
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5 per 100 teledensity- 7,400,000 lines
Current Surplus of Lines- 1997 waiting list
Good coverage to rural areas
4.5 million urban lines
2.9 million rural lines
671.6 million domestic calls
86 million international calls
Technological Infrastructure
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Under the MOTC the TOT and CAT have
provided traditional line services
Thailand has latest technology in value added
services through license agreements
Full government support
E-commerce and Internet growth
Telecommunications Standards
and Protocols and Service
Providers
TOT and CAT retain domestic line
monopolies set standards
 Liberalization through licensing and
partnerships using new frequencies
 Example: Telecom Asia (a NYNEX joint
venture) and Thai Telephone and
Telecom have the contract for the
additional 3 million lines
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Telecommunication Service Providers
Value Added Services
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licensees for paging, cellular,
PCS,data/voice operators,fiber optics
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Shinawatra owns majority of cellular,
paging and broadcasting licenses
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Thaicom 1 and 2 launched in early
1990’s by Shinawatra provide satellite
services
Governmental Regulation and
Private Partnerships
MOTC
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Ministry of Transport and Communications
PTD
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Post and Telegraph Department
TOT
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Telecommunications Authority of Thailand
CAT
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Communications Authority of Thailand
Future Role of Telecommunications
in Thailand
Positive outlook as economy improves
 Telecom projected to grow faster than
GDP
 Progressive government policy benefits
both Thai citizens and businesses
 Build Transfer Operate (BTO) policy
 Licensing agreements
 Internet and E-commerce
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