In this stern notice, China Mobile was required to immediately stop the promotion and handling of relevant services, retrieve and seal off user agreements and invoices that did not comply with regulations; at the same time, submit a written inspection report on the violations and conduct a self-inspection of unfair competition practices throughout the city. According to sources, Nanjing branch of China Mobile (hereinafter referred to as "Nanjing Mobile") was criticized for promoting and developing wired broadband services in Nanjing, violating relevant regulations from the Ministry of Industry and Information Technology (MIIT) and Jiangsu Provincial Communications Administration. The administration recently issued a corrective notice titled "Nanjing Mobile Prohibited from Developing Wired Broadband" to Nanjing Mobile.
Telecommunications expert Hou Ziqiang highly endorsed this model. He believed that China Mobile and the broadcasting system were natural allies, both having beneficial assets for each other. "If the broadcasting system and China Mobile form an alliance, they will surely create a new 'third pole' in the convergence of the three networks," but with the comprehensive deployment of the NGB network by the broadcasting system and the expansion of telecom-level businesses including voice services, is China Mobile's wishful thinking too one-sided?
Thirdly, there needs to be cross-industry integration with the broadcasting operators. The model where China Mobile uses the broadcasting wired network resources for fixed broadband access is currently being widely promoted in cities such as Yangzhou, Wuxi, Suzhou, Quanzhou, and Fuzhou.
Professor Zhang Shunyi of Nanjing University of Posts and Telecommunications pointed out in an interview with the media that under the control of state-owned capital in the telecommunications industry, the government would not allow one company to dominate and crush the other two. "Despite its ambitious goals, it is still difficult for China Mobile to occupy the top position in all business areas. The three telecommunications operators will still engage in differentiated competition rather than moving towards homogenization; otherwise, what would be the significance of the restructuring of the telecommunications industry?"
In the fixed broadband access market, China Mobile, as a latecomer, has launched fierce attacks on the dominant local telecommunications operators in some developed areas in the south. Behind the "suicidal" price marketing strategy lies a new exploration of the increasingly saturated personal mobile communications market, a desire to capture the government-enterprise customer market and small and medium-sized family business markets, and a proactive response to the bundled marketing strategies of Unicom and Telecom.
C114 then called the Jiangsu Provincial Bureau but did not receive a clear response. A relevant person from the bureau stated: "We only issued relevant documents to the telecommunications operators within Jiangsu Province to implement the spirit of MIIT Document No. 686."
Behind the suspension of low-price services, Nanjing Mobile started anew. First, building and operating independently violates MIIT's relevant regulations and is not China Mobile's forte.
However, when C114 subsequently called Nanjing Mobile's customer service hotline at 025-10086, the customer service representative stated that Nanjing Mobile can currently handle fixed network broadband services in neighborhoods with fiber optic access conditions, with an annual fee of 600 yuan, 2M bandwidth, and unlimited internet access. If there is no mobile fixed network coverage or no fiber optic access in the neighborhood, customers can choose the fixed network broadband service provided by Tietong with the same fee as Mobile.
As the superior department of Nanjing Mobile, Jiangsu Mobile also did not make a direct response regarding this matter. However, relevant personnel indirectly pointed out during a C114 connection that this is just standardizing behavior, and the wired broadband access business will continue.
As an important local stronghold for China Mobile, Jiangsu Mobile leads the entire group. Starting from 2008, it began large-scale deployment of FTTx across the province and launched three data service applications targeting mobile service halls, high-end commercial buildings, and large customers with higher APRU values. Jiangsu Mobile was not satisfied with this and began penetrating the home market, but this was not an easy path.
Due to policy restrictions, China Mobile is not encouraged to develop fixed broadband access services. After the reorganization of the telecommunications industry last year, fixed broadband access became one of the main businesses of China Tietong, which was fully acquired by the mobile group. Although the industry has been penetrated for many years, China Tietong remains unable to independently cope with the investment pressure brought about by network upgrades and fierce price wars. The direction of China Mobile's fixed broadband strategy has become a focus of attention in the industry.
According to industry insiders, from the existing operational models, China Mobile has three options if it wants to achieve long-term development in fixed broadband access services. However, the advantages and disadvantages of each model are also very evident.
Following the issuance of 3G licenses over a year ago, after the initial noise and speculation, the three full-service telecommunications operators have all entered a period of full-scale development. While launching "total war," they have also simultaneously challenged each other's weaknesses.
Industry analyst Zhao Guozhang of iSuppli pointed out that in the next 2-3 years, the competitive landscape in the fixed network sector should not change significantly. After all, China Telecom and China Unicom have obvious advantages, let alone the fact that China Mobile's investment focus will still be on 3G and future LTE network equipment.
An insider familiar with the situation pointed out that the 600-yuan broadband package offered by Nanjing Mobile does indeed have a price advantage compared to the dominant local telecommunications operator, Nanjing Mobile. However, Nanjing Mobile obviously overlooked one point: conducting business under its own name without obtaining approval from regulatory authorities.
According to relevant provisions in the "Notice on Further Implementing Relevant Documents on Standardizing the Order of the Telecommunications Market" (MIIT Document [2009] No. 686) issued earlier by MIIT and other local documents, as well as Jiangsu Mobile [2010] No. 94 document, "China Mobile should have clear divisions in its broadband access business. It is inappropriate for Nanjing Mobile to start anew." Related personnel from China Tietong pointed out during a C114 connection, "Reasonable division between mobile and fixed networks is a consensus among the decision-making levels of China Mobile Group and also the tone of national industry regulation."
The person also advised that mobile core network investments, IP transformation of fixed networks, and laying the foundation for GPON development are necessary. "Tietong builds inside buildings, while Mobile builds outside; Mobile constructs and Tietong maintains; Mobile develops customers and Tietong retains them."
This marks the three critical forks in the road for China Mobile’s fixed broadband strategy.