Good Wishes for 2010

Editor’s Desk: With historic events taking place in 2009, for instance, the commercialization of 3G systems, the evolution of Long Term Evolution (LTE) technologies and full-service operation resulting from a new round of reorganization of telecom operators, this was no doubt an epoch-making year in the development of Chinese telecom industry. All these events greatly drove the rapid development of Chinese telecom industry, making it an important part of national economy of China. Meanwhile, broadband market expansion and wireless service development continued to be an international trend. Broadband and high-speed Internet services have become engines for revenue growth of global telecom industry. Celebrating the great development of telecom industry as well as at the coming of 2010, Mr. Zhao Houlin, Deputy
Secretary-General of International Telecommunication Union (ITU), delivered his New Year message for our magazine.

    In his message, Mr. Zhao encouraged ZTE and other Chinese telecom enterprises to assume their responsibilities as one of the top Chinese enterprises and a leading company in the global telecom industry. He hopes ZTE to make greater achievements in innovation and market expansion in order to win more honors for China.

    2009 was an extraordinary year in human history. The world economy suffered an unexpected and very serious downturn due to the US subprime crisis, while the People’s Republic of China celebrated its 60th anniversary. Being an important part of the world telecom industry, the Chinese telecom industry strode forward steadily in the unpredictable global markets. And an up-and-coming industry in Chinese economy, it also flourished in the rapidly changing Chinese market. I am glad to see that Chinese telecom equipment manufacturers such as ZTE have achieved great success in both domestic and international markets in 2009.

    In the past 60 years, especially in the last 30 years, the Chinese telecom industry has undergone tremendous changes. In 1978, China had a population of 900 million, but there were only 2,000 lines of automatic telephone exchanges, and fixed telephone lines per 100 inhabitants was only 0.4%. In 1988, there were no more than 3,000 mobile cellular subscriptions. By the end of 2009, the number of fixed telephone lines reached 365 million, mobile cellular subscriptions exceeded 700 million and Internet users approached 300 million. After 30 years effort, China has now become the largest market in the world in terms of fixed telephone networks, mobile cellular networks, and Internet. All types of services are available, not only those services that are available in other countries, but also some services that are unavailable in the foreign markets.

    More notably, the Chinese telecom manufacturing sector has been developing at an unimaginable speed over the past few decades. For example, ZTE Corporation was founded just 25 years ago, but now, it has become one of the leading telecom equipment manufacturers in the world, with its products being sold in many countries around the world.

    It is notable that during the same period, the world telecom industry has experienced great developments, too.

    According to statistics provided by ITU, at the end of 2003, there were 1.417 billion mobile cellular subscriptions, 1.136 billion fixed telephone lines and 721 million Internet users globally. In comparison, by the end of 2008, global mobile cellular subscriptions, fixed telephone lines and Internet users numbered 4.045 billion, 1.252 billion and 1.584 billion respectively. This means that penetration per 100 inhabitants reached 59.73%, 18.49% and 23.4% respectively. The average mobile phone penetration for developing countries by the end of 2008 had reached that of Sweden ten years earlier. In other words, developing countries were only 10 years behind Sweden in terms of mobile phone penetration. At the current pace, this gap will be further narrowed soon. In 2010, global mobile cellular subscriptions are expected to exceed 4.6 billion and mobile cellular subscriptions per 100 inhabitants reach 67%. Fixed telephone lines may decrease slightly, with lines per 100 inhabitants being 17.8%, and Internet users per 100 inhabitants will rise to 25.9%. In 2004, there were about 150 million fixed broadband subscribers, which tripled in 2008, reaching 500 million. However, with respect to broadband networks, especially fixed broadband networks, the gap between developing countries and developed countries is widening rather than shrinking. In 2009, Europe’s fixed broadband penetration reached 20%, while the Africa’s was only 0.1%. China, with 6.3% penetration, overtook the US as the largest fixed broadband market in the world.

    The ITU’s yearly statistical profiles show that telecom industries in almost all countries in the world have achieved quick growth. However, developing countries still suffered more difficulties than developed ones and there is a considerable digital divide between them. In Africa, telephone penetration exceeds 35% among which 80% of mobile phones are distributed in 10 relatively developed countries in the Southern and the Northern Africa. However, in central Africa, which covers a wide area, penetration is still very low. In November 2009, I visited Burkina Faso, which is one of the Least Developed Countries (LDCs) recognized by the United Nations (UN). This country enjoys a relatively stable political situation. The telephone penetration of the country reached 20% in 2009. I visited a regional communication center, which is only 40 km from the capital. This is the only place that offers Internet services for over 30 villages in the area. The furthest village is more than 30 km away. The climate is hot all year round, the transport is quite inconvenient even though the terrain is flat, and the villagers do not have a modern transport system. It is clear that a distance of 30 km is quite long and difficult for the local people. The mobile phone penetration in Afghanistan, which has suffered recent years, reached 30% in 2009, while in some African and Asian countries, as well as island countries in the Pacific Ocean, the penetration is still lower than 7%. It is notable that every country is making efforts to extend telecom services to connect all villages. At the end of 2007, I paid a visit to Bhutan, a country with high mountains and deep valleys where the population is scattered. It is hard to find a small area of flat terrain there. I visited the first community communication center sponsored by ITU several years ago. Although the center is only 40 km from the capital, it took about 3 hours for us to arrive there by car. During my visit, the minister told me that the country planned to set up 125 centers of this kind in the near future. At ITU Telecom World 2009 held in Geneva in October 2009, the minister informed the audience of some of the communication problems facing his country but at the same time expressed his determination to connect all villages in his country by June 2011. He aimed to accomplish the “connecting villages” task specified in the World Summit on the Information Society (WSIS) and Millennium Development Goals ahead of schedule. He was so confident that he invited me to take part in the celebration of “connecting all villages” in 2011. Shortly after, he sent me a formal invitation letter.  When I visited Burkina Faso in 2009, the Minister showed me their plan to construct the backbone broadband network to connect all provincial capitals. In addition to national telecom networks, many projects involving several countries in different regions have been put on the agenda. In the Connect Commonwealth of Independent States (CIS) Summit, and the CIS ministers’ meeting held in Minsk, Belarus in November 2009, Azerbaijan promoted a backbone telecom network that crosses Europe and Asia. According to their report , this project has been included in the agenda of UN General Assembly 2010. Similar reports and news on regional projects can be read in many media articles. It is clear to me that all countries are increasing investment, not reducing investment, to stimulate the telecom industry despite the global financial crisis. Therefore, it can be expected that a new wave of worldwide telecom construction will be forthcoming.

    In the development of the world’s telecom industry, Chinese telecom equipment manufacturers, represented by ZTE and Huawei, have made outstanding contributions. With advanced technology, low prices, high-quality services, diligent work, good credit as well as persistence and determination, they have succeeded in expanding into international markets. They have gained reputation and established their own market status. During my visits to other countries, the ministers of communications often made mention of the Chinese telecom companies to me, and even warmly called the local representative of these companies to meet me. In my opinion, these companies have not only made significant contributions to the development of the telecom industry in these countries, but also brought great honor to China. After seeing the young faces of the staff, learning about their hardships and difficulties in the countries, and hearing favorable comments from the leaders and experts of the local communication counterparts, I am deeply moved and admire them much. They are undoubtably excellent ambassadors for China. We should be proud of them and we should learn from them.
Future telecom systems will be multi-functional, multi-layer, high-quality, highly secure and
user-oriented with an aim towards user satisfaction. Existing telecom networks, which run at low speed and with single means, will undergo upgrades, diversification and integration several times.   All services and functions offered by electronic technologies will gradually undergo a processes of divergence and convergence again and again. Telecom operators, which number thousands today, will be reshuffled into smaller or even extremely large entities after a certain periods of competition. Multinational operators will emerge. User terminals will be polarized into two groups: simple terminals and intelligent terminals. Further, people will call for the development of low energy-consumption devices, special devices for people with disabilities, high-speed video communication and 3D-based color technologies.

    There is reason to believe that ZTE and other Chinese telecom equipment manufacturers, who have achieved such great success, will surely hold more advanced places in the future telecom industry and be pioneers in some fields.

    Looking to the future, Chinese telecom industry still has a long way to go. I sincerely hope the Chinese telecom industry can make further progress in 2010, and I wish all employees of ZTE a happy and healthy 2010!

(November 28, 2009, Geneva)