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What Lies Ahead For CBN, China’s Newest Telecom Licensee

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What Lies Ahead For CBN, China’s Newest Telecom Licensee

China’s Ministry for Industry & IT (MIIT) has for first time issued a new license to an organisation not directly controlled by the Ministry.

A two-year old company, China Broadcast TV Network Co (CBN) is disadvantageously pitted against the three powerful telcos in the country. The company has just 20 million cable broadband users, which is less than 10% of the market. Just to put this in perspective, at the end of 2015, China Telecom had 106 million fixed line broadband users, which is 50% of the marketshare. China Unicom had 30% of this market.

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CBN was entrusted with the task of integrating many provincial networks into a single national network. In the last two years it has brought cable networks in just two provinces. Many of these cable networks are using old and outdated technology.

The company also has limited financial resources to compete with the national and powerful telcos. Many believe that the company is likely to focus on the rural market and not so much on the urban segment to avoid direct conflict with the national level telcos like China Mobile, China Unicom and China Telecom. CBN is already providing basic connection to many rural communities.

CBN’s rural focus might serve another purpose. It might force the three biggies of Chinese telecommunications industry to focus on the rural market.

Whatever be CBN’s strategy, it is rough road ahead for the company. It would really need to think of innovative strategy to carve out a niche for itself in the Chinese telecom landscape.

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