LIVE FROM ITU TELECOM WORLD 2011: China Mobile’s chairman Wang Jianzhou yesterday noted the challenges for operators in driving broadband penetration, while still building a sustainable business.
Speaking in the 'Pathway to a Connected World' session, he noted that in rural areas, the normal competitive motivators which drive operators are not present, as “no operator likes to do business there because it is very difficult to make money.”
This has led to the digital divide, which has seen the most lucrative customers provided with ready access to high-speed data services, while their less affluent counterparts are disadvantaged.
This is especially true of emerging markets, where average revenue per user is low, which means that it is “very difficult to break even,” Wang observed.
In line with this, and addressing an audience which included a number of government ministers and regulators, Wang described taxation as a “very important issue” in driving broadband growth. Referring to the issue of building a sustainable business, he continued: “if the taxation is too high, it would be very, very difficult to make money, or to break even.”
However, this does not mean that there is no opportunity in serving less populated markets. “We think that even in the rural area, people can use broadband, especially wireless broadband. I think in rural areas, even in some emerging markets, they can skip some phases of telecommunications growth,” he said. As an example, Wang noted the opportunity to deploy 3G technology without using 2G as an interim step.
Moving on to the wider mobile sector, the China Mobile head also noted that: “because of the Internet, especially for the mobile Internet, there have been changes for the ecosystem of our industry.”
“We need to create a win/win situation, and we well have collaboration with all operators, vendors, service providers, content providers and the operator – we cannot take all. But we do not like to be the bit pipes,” he said.