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Wednesday
Aug262015

China swaps out telco bosses, aka 'scum'

Beijing has just swapped around its telco chiefs. Two have done a direct swap and the third has retired, replaced by a government official to take over the third operator.

As China’s economic management comes under global scrutiny, it’s a neat illustration of how it sees the game differently from the rest of the world.

Under the changes, Chang Xiaobing is the now chairman and party secretary at China Telecom, positions he previously held at China Unicom. Former China Telecom chief Wang Xiaochu replaces him at Unicom.

Over at China Mobile, the new man is Shang Bing, previously a vice-minister at MIIT. He replicates the path followed by retiring Xi Guohua, who moved to the operator from the MIIT in 2011, taking over as chairman in 2012.

The appointments were revealed in a series of announcements on Monday morning by the CCP Organisation Department – another key point: leadership posts in large and politically-sensitive SOEs are all CCP positions.

This isn't the first time the party has simultaneously rung the changes among the telco top tier. In 2004 it carried out a similar reshuffle in which, Unicom chairman Wang Jianzhou became China Mobile president, Shang Bing was promoted to Unicom president and China Telecom vice-president Chang Xiaobing became CU chairman and party secretary.

And why?

As a commentary in Sina Tech says, many analysts at that time thought the reshuffle would allow the chiefs to see the world through each other’s eyes and “avoid excessive competition.” Clearly the party bosses think it's been a success.

Punters think differently, however. The most popular comment under the most popular Sina story – focusing on China Mobile – declares: “You scum. All your packages are a fraud.”

The changes come on the heels of mediocre interim results. For all its dominance in 4G, China Mobile  earnings fell by nearly 1% and revenue rose just 4.9%. China Telecom’s net shrank 4% and only China Unicom showed improvement, with a 4.5% hike in income. No one is suggesting the leadership changes are intended to address any of the issues facing the three.

Final point: none of the new execs is female. All of the nine new appointees at China Mobile are male.

Wednesday
Jul292015

Chinese villagers attack base station to save 'dragons'

Angry villagers in Jiangxi, southern China, have attacked a mobile base station under construction because they feared it would destroy 'dragons.'

A man who smashed the base station equipment with a wooden club during the attack in mid-June has been taken into custody, website C114 reports.

The residents of Mao village in Guangfeng district, Shangrao, had objected to the new tower, sited on a hillside, because they believed its transmissions would harm their health and destroy the fengshui 'dragons' in the hill.

The entire base station, under construction by the new state-owned tower company, China Communications Facilities Services Corp, required rebuilding after the attack. Police said the equipment had incurred 7,934 yuan ($1277) in damages.  

Thursday
Jul232015

Handset sales drove Huawei’s big 1H 

About that robust Huawei 1H result: it’s mostly about the device.

After the vendor yesterday reported a 30% boost in first-half sales to 175.9 billion yuan ($28.3 billion), the consumer group today issued its own mini-statement

Like the company, it’s on a considerable roll, only more so. Revenue for the division increased a hefty 69% year-on-year to 56.3b yuan. It now accounts for 32% of the total, up from 24% this time last year.

Devices have become a big part of Huawei, and perhaps never more so in this period. Of the 40.1b yuan extra topline revenue, almost three-fifths came from the device team. While that includes tablets, wearable and smart home gear, smartphones are far and away the biggest part. Smartphone revenue rose 87% to 44.9b yuan, which the company attributed to a “focus on mid to high-end handsets.”

Unit numbers are impressive, too, with shipments up 39%. Huawei had an 8.8% market share in April, according to Gfk, while Gartner ranked it fourth in Q1 behind Samsung, Lenovo and Apple.

Perhaps the big message here is not just the financials but that Huawei has now become a smartphone as well as a carrier equipment heavyweight. Handset quality, like market share, has been building since it decided four years ago to go after the device market.

So is the brand. In a media briefing Huawei reminds that last year it became the first ever Chinese brand on the Interbrand top 100, and it ranks 79th on the BrandZ chart of valuable brands.

The device group is well ahead of its $16b revenue target for 2015. It's now aiming for $20b.

Tuesday
Jul142015

In Shanghai with the Great Firewall

In Shanghai ahead of the Mobile World Congress event, and getting my usual education on who's inside and who's outside the Great Firewall of China (GFW).

 

The usual suspects – Facebook, Twitter, YouTube – are permanently out of bounds. But in the new normal since 2014 sites such as scmp.com and even the Hong Kong government broadcaster RTHK have disappeared from view.

 

One surprise on this visit is the blocking of BBC World Service radio. The English language service has usually been available, though not the Chinese. The BBC English website is accessible, but not their video. The same goes for CNN.

 

The filtering is often (and presumably intentionally) erratic. When living in Beijing I'd find sites such as Yahoo would disappear for a few hours or a day or two and then return. This may be why Google.com.hk, Gmail and Google Translate are back online, though it's likely a more permanent change. Last year all Google services were restricted. Currently just Google Drive and YouTube are blocked.


The one positive about this sustained assault on knowledge diffusion is it provides a good cutomised test of which tools are the most valuable. In order I'd say Twitter, Wordpres and Google Drive.

 

This is an obviously unscientific and personal list. For comprehensive coverage of the GFW, visit Greatfire.org.

OUT

YouTube, Twitter, Facebook, Flickr, Google Drive, Blogger, scmp.com, RTHK News, nytimes.com, bloomberg.com, BBC World Service radio, Delicious, Wikipedia (Chinese), WordPress (any WordPress blog), WSJ.

IN

BBC News website (but not radio), CNN (but not video) Guardian, Google HK, Google Translate, Gmail

 

Wednesday
Mar112015

Milestone: VC legend backs HK biotech startup

Hong Kong has won acclaim over the years for its kung-fu movies, excellent dining, spectacular skyline and free economy. 

But never for its technology.

So today may eventually be regarded as a modest milestone in its path to becoming a technology hub. It's probably fair to say few Hong Kong citizens are aware that that is a path they are on. In fact, governments over the past 15 years have built science parks and incubators and tipped in growing amounts of R&D cash.

Today's news is that a local startup, Vitargent, has taken on Taiwan-American VC firm W.I. Harper as an investor for an undisclosed amount.

That may sound modest in the extreme, but Harper chairman Peter Liu has enormous cred in the tech investment community. In a career that goes back to 1983 in Taiwan and 1992 in China, his successes include Singapore's Creative Technologies, the inventor of the PC soundcard, and video software firm Divx. Currently, he is an early stage investor in apps search firm Quixey, which has attracted investment from Alibaba and Softbank that values it at $600m. 

Vitargent's back story isn't as long but it's impressive. An incubatee at the Hong  Kong Science Park, it uses fish embryo to test for toxins way more effectively than anyone else. Traditional tests can identify five to ten toxins; it can test for 1,000 (that's transgenic medaka, or Japanese rice fish, glowing fluorescent green, above).

The company has sold its product to international cosmetics and food companies, and according to Liu another major deal is in the pipeline. It has won a brace of awards: The Clinton Global Initiative, the Lee Kwan Yew Global Business Competition, the HSBC Young Entrepreneur Awards. the Hong Kong Awards for Industries.

Vitargent founder Eric Chen says since word leaked of the Harper investment he's had investors beating a path to his door. Although that sounds like startup hyperbole, VCs are herd animals and that's exactly how they behave. The biggest impact from this could be to put Hong Kong finally on the tech investment map.