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Prospects of next generation Internet application in China
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By Cao Shumin

Since the beginning of this century, the robust growth of broadband access technology and service has pushed the development of the Internet in China onto a fast track. By September 2007, China's Internet subscribers had grown to 172 million, with a penetration rate of 13 percent. Thanks to the open access policy adopted by the government, the number of Internet service providers has been increasing dramatically in the past few years, reaching 14,446 by June 2007, among which 9,791 are service providers based on mobile Internet. Internet-related revenue, already totalling more than 100 billion yuan, is growing by 35 percent annually. Telecom carriers are mainly engaged in providing Internet access and information service, IDC and WAP services. The size of China's Internet market amounts to approximately 30 billion yuan, or about 9 percent of the country's total telecom revenue.

With the rapid development of the Internet in China, Internet related technologies, in particular the application and research and development of access technologies, transport and networking technologies which support the growth of the Internet, have become the hotspots of the industry.

First, great leaps have been made in broadband access technology. Since the outset in 2001, China became the world's second largest broadband market in merely six years. By September 2007, there were 630.5 million broadband subscribers in the country, including 487.6 million ADSL subscribers. From 2002 to 2006, the number of China's broadband subscribers grew by 100 percent annually, and revenues of broadband service rose by 24.5 percent each year. The coverage of broadband service is also penetrating China's vast rural and remote areas while becoming increasingly popular in urban areas. According to the 11th Five-Year Plan (2006-2010) of China’s Ministry of Information Industry, broadband Internet access will be delivered in each town across the country. ADSL is the principal broadband access technology in China, used by two thirds of the country's broadband subscribers, while the usage of fibre access (FTTx) is also increasing.

When the whole telecom network is transforming towards "a ubiquitous network," ADSL, as the principal technology of broadband access, will be replaced by a diversity of technologies. Wired broadband access technology will be increasingly based on fibre, while wireless broadband access technology will feature more mobility. Broadband services will become more varied, from principally Internet access to multiple services that include data and video services.

Meanwhile, traditional ADSL technology will be fully upgraded to ADSL2+ and VDSL2, while the transport capability over copper wire will be significantly improved, and copper wire based access technologies will remain a viable choice for a long time. At the same time, telecom carriers have begun to implement the strategy to evolve their networks from copper to fibre by introducing FTTx technologies such as EPON and GPON, and stepping up their study of 10GEPON/GPON and WDM-PON which deliver higher speed. FTTH is to become mature in service, technology and cost-effectiveness.

Mobile Internet services have taken off and will become another boost for the growth of Internet industry after broadband technology, as in the world today there are over 3 billion mobile phone subscribers, 2.5 times of the Internet subscribers. In China, the number of mobile phone subscribers is 3 times of that of Internet subscribers. In addition, with access anywhere at any time provided by mobile networks, and increasingly faster speed made possible by new technology, mobile Internet can become a new platform.

Today, there are 65,000 WAP websites with independent domain names operating in China. About 44.3 million people, or 27.3 percent of Internet subscribers, are using mobile phone to access the Internet in China. With 500 million mobile phone subscribers and 38.3 percent penetration rate, the Internet and mobile Internet have tremendous potentials in China. Today, there are 9,791 service providers that are based on mobile Internet, and Internet or quasi-Internet services such as search, e-mail, blog, portal and gaming are becoming increasingly popular. Mobile phone based newspaper, mobile TV, music and navigation services are already available in China. Mobile phone based Internet will also become a major platform to deliver the latest Olympic information to subscribers across the world during the 2008 Beijing Olympics.

China Netcom and China Mobile are both partners of 2008 Beijing Olympics. China Netcom will provide a wide range of information services that will include broadband Internet access, high-resolution programs, Olympic yellow page, booking of hotel and ticket, healthcare and tourism. China Mobile will provide various ways of wireless broadband access, such as TD-SCDMA/HSDPA and WLAN, for video monitoring for security and control, as well as various value-added mobile services such as Olympic news over mobile phone and mobile phone wallet.

In a global perspective, with the rapid development of the Internet and mobile communications, mobile and broadband communications are becoming increasingly intertwined with each other. Since last year, the enhanced third generation (3G) mobile communications technology has begun to develop at a faster speed, with the number of commercial HSDPA networks reaching 128 in only a year and a half, three years faster than the commercialisation process of 3G. Standardization of Long Evolution Technology (LET) for higher bandwidth is gaining speed too. WiMAX, on the other hand, is a typical example of fixed broadband access technology with mobility gradually added in to evolve towards a new mobile broadband technology. For fixed wireless access, China has issued 3.5GHz licenses through bidding a few years ago. For mobile WiMAX, i.e. 802.16e technology, China is evaluating its performance, maturity, and its relations with other wireless mobile technologies.

The Chinese government, universities, research organizations, telecom carriers and equipment makers attach great importance to the study of the next generation Internet and network, with a number of research projects, trial networks and plans of network construction already underway.

In 2003, the Chinese National Development and Reform Commission initiated a research program on the country's Next Generation Internet (CNGI) in collaboration with the Ministry of Information Industry, Ministry of Science and Technology, Ministry of Education and National Natural Science Foundation. With 1.4 billion yuan already invested, the program plans to complete the world's largest Next Generation Network by 2010. The study and experiment of the program will cover R&D, standard, development of equipment and building of trial network based on IPv6. All the major Internet providers, among them China Education and Research Network (CERNET), China Telecom, China Netcom, Chinese Academy of Sciences, China Mobile, China Unicom and China Railcom, have participated in the trial and built trial networks.

Some research and education institutes built the world's largest IPv6 only network to concentrate on innovation centering on IPv6 technology. Telecom carriers built IPv4/IPv6 dual networks, focusing on experiment of business use and differentiated service. Up to now, progress has been made in 77 R&D, industrialization and network trial projects, and 50 projects have been completed.

Under the 863 Hi-tech Program and its supporting programs led by the Chinese Ministry of Science and Technology, "Highly Credible Next Generation Internet Project" was launched in 2007 to carry out study on network architecture, transport, access and service concerning the security, credibility system and convergence of networks and services of the Internet. Initiated in an effort to construct secure and reliable next generation Internet, this project was funded with 1.05 billion yuan from the government, with another 502 million yuan budgeted for related supportive programs during the time span from 2007 to 2011. The project is focused on the hierarchy, standard, survivability and virus protection, as well as R&D and trail of new equipment and applications.

Chinese telecom carriers generally believe soft switch and IMS represent the inevitable trend of the next generation network in the service layer, and have taken actions in these areas. For instance, carriers like China Telecom have built independent bearing network and soft switch network, and used them for local and long-distance services to realize intelligence of fixed network and provide services to large customers.

In addition, "Next Generation Wireless Broadband Network Programme" will conduct comprehensive study in areas such as wireless access technology, networking technology and service development for mobile Internet, take part in formulation of international standards and promote the development of relevant applications.

We believe that the future network will be an IP-based core network, a seamless network with various means of access that can provide optimal means of access to the Internet anywhere, at any time.

Profile of Ms. Cao Shumin

Vice President, China Academy of Telecommunications Research of Ministry of Information Industry

In 1992, she was awarded her masters degree from Beijing University of Aeronautics and Astronautics, and she obtained her doctoral degree in management from Hong Kong Polytechnic University in 2007. From 1995 to 2002, she served as vice president of the Research Institute of Telecommunications Transmission, and from 2001 to 2004 held the post of chairperson with the 3G Technical Trial Expert Group. From 1998 to 2003, she also served as chairperson of the ITU 3G Technical Group, and as chairperson with the Wireless Technical Group of CCSA from 1999 to 2006.

( November 27, 2007)

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