March 25, 2011, Telecom carriers’ official media in China, CNII website and People’s Post & Telecommunication Daily, today criticized China’s cable operators’ lack of intention of cooperation on triple play in its editorial article. The newspaper writes, “ Like this still cold spring in Beijing, people cannot feel any high temperature from CCBN2011, the annual largest cable TV show in Beijing. On the contrary, even after government published its triple play policy last January, China’s cable operators emphasize their telecom strategy year after year. They introduced their broadband strategy very clearly last year. This year they announced again their integrated information service strategy. However, to the most important thing behind triple play, they always neglect lightly. From this long-term telecom strategy of China’s cable operators, we don’t see any olive branch of cooperation, but we are seeing an emerging cut-through competition. ”
The editorial points out China’s cable operators are on the wrong road of triple play. Facing customers’ increasing request on high bandwidth service, both telecom service providers and cable TV operators cannot meet the requirement independently. Their only choice is cooperation. However, already having the unshakable content advantage, cable operators still want to build and own the traditional advantage of telecom service providers. Their target is providing all service by themselves. Thus, we will not only face the duplicate network construction, but also find difficulty to increase bandwidth efficiency. It is also not beneficial to cable TV operators. For example, paying too much attention on telecom service, cable operators move very slowly on their triple play content platform. The direct result is that telecom service providers cannot find the cooperators on triple play. In fact, the 12 cities that have been set up to make triple play trial by the government have made little progress up to now.
According to CNII’s editorial, there will be unavoidable cut-through competition. In China, competition among telecom service providers is already very severe. Adding cable operators in this competition, the only result is a lose-lose price war.
As conclusion, the editorial predicts that cable operators’ telecom strategy won’t succeed. First, cable operators don’t have enough fund support. Only their next generation broadband network needs 300 billion investments. Second, they lack the ability to execute. Cable operators once planed to finish the integration of provincial cable TV network before the end of 2010. However, only 7 provinces reach this target. Third, their market competition experience is zero. Can they face the real competition from telecom service providers after they leave their safe harbor?
It is understandable that CNII published such an editorial. From our report about CCBN2011, officials of cable operators and SARFT (state administration of radio and film, television) emphasized many times in the show that they need time to improve network construction. Otherwise, they cannot compete with telecom service providers. They talked many times that they need the intervention of central government to give them more time. Mr. Chen,zhiguo, an expert from SARFT’s research institute, gave a speech in the show about this topic. He took the examples of some other developed countries to emphasize that it is normal that government protect cable operators. He suggests that China’s government should improve the management of triple play, build a cable operator controlled content triple play platform.