Corporate Strategy Case Study

China Netcom: Susceptible or Impervious to 3G?

OR

Abstract:
China Netcom was long awaiting a 3G licence for time division-synchronous code division multiple access (TD-SCDMA). This technology was going to be tested at the Beijing Olympics and there was a lot of speculation about the successful implementation of TD-SCDMA. However, China's cellular subscribers were forecasted to reach 28 million by 2011 from 1.1 million subscribers in 2007. Anticipating such huge subscription growth, China Netcom had invested millions of dollars in upgrading its transformation from a fixed-line communication provider to a broadband communication provider and multimedia services provider. China Netcom had also reformed its organisational structure, operation model and corporate governance practices. Going forward, the fate of China Netcom would depend upon the success of TD-SCDMA technology.

Pedagogical Objectives:

• To understand the Chinese telecommunication industry.
• To understand the importance of 3G technology.
• To comprehend China Netcom's degree of dependency over the 3G licence.
• To analyse the possible effects of TD-SCMA on China Netcom. This case is intended for MBA / telecom management students and is designed to be part of the strategic management curriculum.

Keywords : Telecommunications; China; China Netcom Group; 3G licence (third generation licence); Beijing Olympics; Global system for mobile (GSM); Code division multiple access (CDMA); Datang Telecom Technology Co Ltd (DTT); Time division-synchronous code division multiple access (TD-SCDMA); International Telecommunications Union (ITU); Wideband code division multiple access (WCDMA); First-mover advantage; Experience curve; CDMA 2000; Public switched telephone network (PSTN); Fixed-mobile convergence (FMC); The Ministry of Industry Information (MII)