China euphoria dims
ANH-THU PHAN in Honolulu
--------------------------------------------------------------------------------
Last year's euphoria over telecommunications and Internet businesses has given way to subdued optimism, and even pessimism, judging from comments at a conference on information technology in China in Honolulu.
Speakers focused on rapidly improving infrastructure and new demand spurred by recent price cuts, but most readily acknowledged that roadblocks existed for foreign investors.
These include a rapidly changing competitive environment as mainland companies deregulate and jockey for market share, as well as new laws that limit foreign ownership and curtail content of services.
The mainland moved to lower telecoms' rates in December, when long-distance charges, leased-line charges, and Internet service providers' (ISPs) fees were lowered by as much as 95 per cent.
One panellist - Duncan Clark, managing director and founder of BDA China in Beijing - said this was creating "havoc" for many ISPs, although he added the savings probably would be passed on to users and increase Internet usage on the mainland.
Take-up rates for new, fixed telephone lines, mobile-phone subscriptions, and Internet protocol-based telephony also are expected to increase rapidly this year as consumers benefit from increased competition and lower rates.
Nonetheless, not everyone was optimistic about the investment climate for technology in China. Harold "Bud" Enright, Compaq Computer's vice-president, called the investment community there "sub-par", adding that venture capitalists and entrepreneurs still had a get-rich-quick mentality that prevented them from coming up with realistic businesses plans.
"We are finding a lot of flash-in-the-pan, quick moves," he said.
Mr Enright said Compaq had an investment target of US$100 million for Greater China last year and did not spend the full amount.
"It wasn't because we didn't try. We didn't find enough plans of sufficient strength," he said.
He said that formerly deep-pocketed investors such as Softbank and CMGI were in "crunch mode" and therefore not active in China.
Another obstacle for foreign investors interested in China's telecom and technology fields is the regulatory environment.
In laws issued late last year, China went further than before in regulating allowable content on Internet sites, said Jeanette Chan, a partner at the law firm of Paul, Weiss, Rifkind, Wharton and Garrison, which is based in Hong Kong.
One aspect of the new Internet laws that might be hard to interpret is the provision against circulating rumours and incorrect facts.
"It is very hard to say what constitutes rumours and what constitutes incorrect fact. I don't know if the MII [Ministry of Information Industry] has interpreted this. I don't know if it's possible for them to interpret this," she said.
Speakers at the conference included Li Shihe, director of the Chinese Academy of Telecommunications Technology and inventor of TD-SCDMA, China's home-grown standard for third-generation, mobile-phone technology.
Mr Li said trials for TD-SCDMA would be conducted in the first half of this year and that commercial deployment was scheduled for next year. Equipment maker Datang, which proposed the standard, will conduct the trials.
He added that "a very famous company is co-operating with us for the chipset", although he declined to name the company. Adequate supply of hardware such as chipsets and handsets would be key to successful launch, he said.
Other third-generation mobile standards, such as Europe's W-CDMA and the United States' CDMA2000, are still under consideration for the China market, though the Government and Chinese mobile providers have yet to make any commitments.
Although the exact number of Internet users in the mainland is the subject of debate, estimates range from iamasia's 15.3 million to the 23 million that the China Internet Network Information Centre (CNNIC) is likely to report later this week.
CNNIC director Qian Hualin, speaking at the Honolulu conference, also noted there were 120,000 English-language domains ending in .com.cn, up from 100,000 in June and 48,700 at the end of 1999.
technology.scmp.com |
