AUTHORITIES on Thursday launched a major pilot project in 12 cities nationwide to help converge the telecommunications, Internet and broadcast networks, the State Council said in a statement on the government’s website.
The project aims to make the three sectors compatible in the country to allow users to make telephone calls, surf the Net and watch television through one cable or wireless gateway.
It will enable telecom carriers, Internet companies and broadcasters to enter each other’s fields and provide services, and is expected to create billions of yuan of investment in the coming years, analysts said.
Cities chosen for the pilot project include Beijing, Shanghai, Dalian, Hangzhou, Shenzhen and Wuhan.
The trial will last till 2012 and will focus on connecting the broadcasting and telecom networks, the government announced earlier. Authorities also vowed to achieve a comprehensive integration in line with the project by 2015.
The convergence project will attract at least 300 billion yuan ($44 billion) of investment from broadcasters and telecom carriers to upgrade their networks, said Xiang Ligang, a leading Chinese telecom analyst.
“The launch of the program will mean huge investment,” Xiang said. But the investment may not yield any concrete results within the next two to three years, he said.
The trial is also expected to significantly increase capital expenses by both telecom carriers and cable operators to upgrade their networks in the coming years, said Helen Zhu, analyst from global investment banking and securities firm Goldman Sachs.
Zhu said the investment “will enable new services which can expand the total broadcast and telecom revenue pie”.
The move to bring the three sectors together has been mulled for more than a decade, but has made little headway because of factors such as technological challenges and contention among stakeholders.
In 2005, the local broadcaster in Quanzhou strongly opposed a project launched by Shanghai Media Group and China Telecom in Quanzhou in Fujian province involving Internet Protocol Television or IPTV, which is a system through which digital television services are delivered via the Internet.
At that time, the broadcaster was promoting a competitive service that enabled users to surf the Internet on television. The project had to be shelved because of the escalating dispute.
The latest pilot program is expected to end differences among the relevant stakeholders as the authorities have redefined industry regulators’ areas of responsibility, said Gan Kaili, a professor at Beijing University of Posts & Telecommunications.
Competition among telecom carriers, Internet companies and media groups has been changing in recent years worldwide with the rise of new technologies such as 3G and digital media.
The trend has generated innovative services such as mobile TV, online video and Voice over Internet Protocol or VoIP, but it has also intensified competition among industry players, analysts said.
