China telecoms 2013: More web controls, more of the same

If China's new leaders are planning to loosen internet controls, they haven't told the chief telecom and internet regulator.

At a year-end work conference last week, MIIT chief Miao Wei cited stronger management of the internet and continued efforts to “clean the network environment" as among his top priorities.

Miao promised “strengthened management over the internet industry” and more “guidance and management for the mobile internet, microblogs, instant messaging, smartphones, app stores and other new technologies and services.”

Without elaborating, he said the ministry would “revise domain and IP address resource management methods.”

Miao's widely-reported remarks ignored or only touched on some of the live competition issues on the MIIT's plate. 

He did not mention the plans to allow private investment  in MVNOs and other areas. He said the ministry would try to release the overdue national broadband strategy "as soon as possible."

Miao also did not refer to the long-running anti-trust probe into China Telecom and China Unicom, but promised “improved telecom market supervision” and a change in network settlement policies.

On the decade-long attempt to allow cable and telecom operators to compete in each other's markets, the minister promised no more than to begin approvals for “second-phase trials”.

Miao confirmed the government would complete LTE spectrum allocation and 4G "licence issue preparation” this year.

Finally, he hoped to expand the mobile number portability trial. The trial, underway in Tianjin and Hainan since 2010, has reportedly stalled. Miao did not indicate how or where the trial would be enlarged.

Huawei's Ren vows: 'Our gear will be the world's safest'

Huawei’s publicity-shy CEO Ren Zhengfei has made his first public remarks since a Congressional committee labeled the company a security threat.

And while he did not address the committee’s claims directly, Ren said Huawei was “determined to make internal adjustments to ensure that our equipment is the most secure, transparent, high-quality equipment in the world.”

Ren’s rare public disclosure was posted by Huawei cyber security chief John Suffolk on his personal blog following a private meeting between the two. Ren gave his permission for his comments to be published.

The 68-year-old former PLA officer has never been interviewed by the foreign media and has not talked to the Chinese press for more than a decade, although his remarks at internal staff meetings are sometimes relayed to the Chinese media.

Despite his long public silences, Ren’s role in creating China’s largest private-sector business has made him one of the country’s most feted business leaders. In contrast, his refusal to attend the recent Washington hearings sharpened the image of Huawei as a firm operating in the Chinese shadows, unwilling or unable to explain itself.

In the event, Ren did not elaborate on how the vendor would improve security, but Suffolk cited the company’s existing policies - for example, ensuring equipment is “transparent so people can inspect what is passing through,” and that hardware was interchangeable so customers can mix and match with vendor software.

Unlike his boss, Suffolk, a former UK government CIO, was not afraid to make a political point:

We hope that those who wish to close markets, stop competition and innovation under the false banner of national security will take the strategic customer focused lead of Mr Ren and pour their energies into creating a free market with substantial competition and innovation so all citizens can benefit.

China Mobile HK loads up with TD and FDD

China Mobile's Hong Kong unit today officially launched the world's first converged TD and FDD LTE network.  'Officially' meaning it has no handsets and limited coverage and won't offer service to the public until an unspecified time next year.

But the main point of interest is the attention this draws to CMHK's role as a roaming service feeder to its mainland parent.

The TD overlay on the eight-month-old FDD network is an extra cost for the low-spending Hong Kong users who mostly make up CMHK's local customers. But that doesn't matter; its purpose is to capture the huge number of roamers from across the border.

Just how many roaming customers and how much they spend we have no idea. CMHK doesn't disclose any financial details. Given that anywhere more than an hour out of Hong Kong Central is roaming territory, roaming is a big chunk of the business. Plus the city is, any Hong Konger will tell you, inundated with mainland visitors – an estimated 45 million will trip across the border this year.

While CMHK chairman Tiger Lin cited LTE's speed – up tenfold – and cost – down 90% – as its prime benefits, he couldn't promise that roaming prices would fall, even for the millions of cross-border customers. Currently the company caps data roaming at HK$38 ($4.90) a day for roaming to mainland China, and HK$98 for other neighbouring markets.

Finally, the other reason the extra deployment may not greatly trouble CMHK's bottom line: its parent company's imminent 4G tender. CMHK's TD rollout has allowed vendors to audition for the biggest gig of 2013. For the record, Ericsson supplied the TD-LTE radio access and ZTE the base stations and handsets.

So, what exactly happened at WCIT?

The short answer is this map, which shows the voting outcome. Broadly, the US, western Europe and friends refused to vote for the new ITR (international telecom regulations) treaty. Russia, China, most of Africa and the Arab states voted for it. Or as The Economist would have it, the return of the Cold War factions.

The biggest loser is the ITU itself, the official UN agency for international telecoms.

The immediate reason is because its old-style, behind-closed door, governments-only approach doesn’t work in the 21^st century. 

Longtime ITU observer Keiren McCarthy writes:

In the end, the ITU and the conference chair, having backed themselves to the edge of a cliff, dared governments to push them off. They duly did. And without even peeking over, the crowd turned around and walked away.

Quite a few people - like TechDirt and a US delegation member – forecast that the organization will continue on in a fragmented, politicised way. A bit like the UN itself.

Tech Dirt goes on to say the main reason for the impasse is that

…here is a world in which there are two competing visions for the future of the internet -- one driven by countries who believe the internet should be more open and free... and one driven by the opposite. Whether or not the ITU treaty is ever meaningful or effective, these two visions of the internet are unlikely to go away any time soon.

As for the specifics of the treaty (full text here), the NGO Access Now provides this analysis. 

The Good

None of the key definitions in the treaty like “telecommunications” or “international route” were expanded to include the internet. Problematic language giving states a right to know how traffic is routed, opening up the door to widespread surveillance and necessitating costly changes to internet architecture was also rejected…

The controversial ETNO [European Telecom Network Operators] proposal, which would have subjected the internet to the “sending party pays” billing model of traditional telephony also didn’t make it into the treaty.

The Bad

A new provision, that requires states to “ensure the provision of Calling Line Identification -- an undefined term but one that certainly includes user data -- made it into the treaty. Worse still, this provision can be modified by future ITU-T standards, which could dangerously expand this treaty to include the internet.

The Ugly

Article 5B calls on governments to prevent “unsolicited bulk electronic communications” which could apply to the internet.

Finally, despite all of the assurances of the ITU Secretariat that the WCIT wouldn’t discuss internet governance, the final treaty text contains a resolution that explicitly “instructs the Secretary-General to take the necessary steps for the ITU to play and active and constructive role in... the internet.”

It also says “all governments should have an equal role and responsibility for international internet governance” – a reference to the Russian and Chinese demand that the US surrender its official influence over ICANN.

We shouldn’t weep for the ITU.  These days it is little more than the global registry for technical agreements hammered out in other industry bodies. It will still play that role. It has plenty of time to adjust to its new role as arena for geopolitical contest.

China Mobile, MTK lead China's mobile web

Two things stand out in the latest quarterly survey of China’s mobile web by search firm Easou.

First is the dominance of China Mobile. Sure, it’s the 800lb gorilla, with over 700m subs, or 69% of the market.

But when it comes to the mobile web its share actually rises to 83%, according to Easou, China’s third largest mobile search provider.

Yet in the 3G market it has just a modest lead, with 37% of customers.

China Mobile is still mainly a 2.5G operator. Even today, more than four-fifths of China’s 1.02 billion mobile users carry a 2G device, and some 80% of online visits are via WAP, according to the Easou survey (in Chinese only). Many sessions are via multiple platforms, with WiFi accounting for 16% and non-WAP for 36% of visits.

The positive for the other two operators is that Mobile's market share is down six points over last year, thanks mainly to their 3G gain.

Bearing in mind that this survey is drawn from Easou's search traffic, which accounts for more than a fifth of the market, the other striking point is the two biggest mobile operating systems. They’re not the usual suspects.

The largest in fact is MTK, a platform offered by Taiwan chip firm Mediatek and which is popular among local brands such as Bird and Lenovo. Between them the many shanzhai firms have racked up just under 30% market share, well ahead of Nokia (25%) and Android (22%). iOS is well back in fourth spot on 5.77%.

Not to write off the latter two - Android added 4.8 points this quarter and is on track to overtake Nokia, which shrank, while iOS grew 1.3 points.

The success of MTK should give pause to global handset players, especially those eyeing developing markets. You wouldn't bet against it.