Regulation key hurdle to converged services in China: Ovum

Staff writer
27 Jul 2011

Despite industry players’ eagerness to offer converged services in China such as IPTV and mobile TV, the development of converged services between telecoms and media was a long time coming, primarily because of the significant regulatory barriers in China, a report said.

In a new report, telecoms analyst Ovum revealed that the biggest barrier is from diverse regulation and the long-standing conflict between the two regulators governing the sectors (telecoms and media) as a result of the lack of a Telecommunications Act, and also the lack of a new regulatory framework designed by the State Council.

The two key regulators, the Ministry of Industry and Information Technology (MIIT) and the State Administration of Radio, Film and Television (SARFT), have hindered the uptake of these converged services.

In addition, all the key players in the telecoms and media markets, hundreds of regional broadcasters (cable operators), and three telcos (China Telecom, China Mobile, and China Unicom) are state-owned companies. Due to insufficient liberalization and privatization, this is another barrier to achieving fair competition between broadcasters and telcos in the convergence market.

“The State Council should impose further regulation such as interconnection and anti-monopoly regulation, and remove regulatory barriers between telecoms and media such as the current complex license grant and management mechanism on converged services,”said Charice Wang, Ovum analyst.

Ovum said it expects forthcoming convergence to have significant impacts on next-generation network investment by both telecoms operators and broadcasters, promoting market competition.

In some Asian countries, the converged regulators such as the National Communications Commission in Taiwan (which came into operation in early 2006) and the Korea Communications Commission (established in February 2008) were set up to concentrate their efforts on regulatory convergence. The move of setting up the converged regulators helped to promote converged telecoms and media services.

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