China Mobile Charges Into Broadband

It appears that China Mobile is moving more aggressively into the field of fiber optic broadband after Alcatel-Lucent revealed that it won a contract to provide optical networking solutions for deployment in 14 Chinese provinces.

Under the agreement, Alcatel-Lucent will provide a range of optical networking products to support fiber to the home (FTTH), fiber to the building (FTTB), and services such as network construction deployment, integration, and maintenance.

FTTB is slower than FTTH because the route from the building to the individual home or office is taken by older copper cable. FTTH brings the fiber optic cable directly into the residence or workplace.

In March, China Mobile announced it had awarded contracts to build its passive optical network (PON) to Ericsson, Huawei, ZTE, Shanghai Bell, and others.

This move is something of a new direction for China Mobile. The company has never been involved in fixed-line voice or data services before. However since the shakeup of China's telecom industry in 2008, China Mobile has become the only one of the nation's three major carriers not to have both fixed-line and mobile services.

China has the largest broadband market in the world, with more than 115 million users, but sometimes it feels like dial-up. So China's operators are finally undertaking a major upgrade to speed up the network. Residential broadband speeds vary widely, from 512 Kbps to 20 Mbps (in very special cases). Most people are on the low end of that range. This is stunting development of new, higher margin services that are common in places like Japan and Korea, such as Internet Protocol TV and video on demand.

That's beginning to change. China Telecom has the most ambitious plans to transform its network. The firm is looking at 100-Mbit-per-second access by 2013, up from a peak of 12-Mbit today. Telecom isn't the only operator stepping on the gas. In August 2009, rival China Unicom set aside nearly $1.5 billion to increase the base speed of its national broadband network to 2 Mbps; it is also ramping up fiber installments.

With "triple play" -- the integration of voice, internet, and TV broadcast services -- just around the corner, China Mobile is looking to better position itself to keep up with its smaller rivals, who have both fixed-line and mobile service.

In the near future, China Mobile's fiber network will offer 2-Mbps connections to home users and 20 Mbps to corporate customers. Within three to five years the company expects to be offering 20-50 Mbps to residential customers through FTTB and up to 100 Mbps through FTTH.