China Network Optimization Industry Development Prospects and Investment Forecast Report, 2013-2017
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Table of Contents
The most distinctive characteristics of this report is forward-looking and timeliness. Through analyzing forward-looking characteristic of abundant first-hand market data, we deeply and objectively dissect China network optimization industry’s development size and competitive landscape. Furthermore, based on future development tracks and years’ practice experience of network optimization industry, we conduct prudent analysis and forecast for network optimization industry’s future development trend.
Network optimization refers to a process of collecting traffic statistics, radio parameter, frequency allocation, switch configuration relation, test data, equipment alarm, network engineering parameters, and so on, and then conduct comprehensive analysis for them, so as to find the reasons which affect the network operation quality, moreover improving the quality and operation speed of network by means of equipment troubleshooting, equipment resources adjustment, parameters adjustment, modifying frequency, switch relation optimization, BTS Antenna System adjustment, and so on. Network optimization includes wireless network optimization and switching network optimization. Since wireless network covers a very large number of base stations system, and its optimization work includes a large quantity of outdoor tests and adjustment, the workload and demand of wireless network optimization is heavier than that of switching network optimization.
Network optimization industry is still a new emerging industry in China, and the production and development of this industry is closely related to the reform of China telecommunication system, the application and progress of mobile communication technology, and the development of communication technology. Especially after the year of 1999, with the deepening reform of telecommunication system, China Mobile (China Mobile Communications Corporation) and China Unicom (China United Telecommunications Corporation) set up, the variety of telecommunication services keep being divided, and the communication technology services tend to be market-oriented. Some organizations, such as telecom engineering corporations and design institutes gradually transformed to corporations, which have been the third party corporations focusing on network technology services, and have been independent of telecom operators and communication equipment providers. They have formed a professional service field for themselves.
Meanwhile, since communication technology relates to wider and wider fields, and the market capacity becomes larger and larger, a batch of emerging third party communication technology professional providers have set up and develop, which keeps strengthening the network optimization industry.
With many years of development, China network optimization industry competes fully now, and it has basically been in a state of perfect competition. There are many small-sized network optimization enterprises in this industry. According to statistics, there are more than 400 large-sized network optimization enterprises in domestic market, among which most of them are regional enterprises, but only less than 50 of them are national enterprises; the registered capital of regional enterprises ranges from hundreds of thousands of RMB to millions of RMB, with the sales revenue from hundreds of thousand of RMB to millions of RMB; except for several enterprises, the registered capital of national enterprises is generally hundreds of billions RMB, with the sales revenue of tens of millions of RMB or even over a hundred million of RMB. Therefore, the enterprises in the industry generally occupy small market shares.
At present, the enterprises in this industry mainly benefit from the rapid development of China communication technology, the transition of operator positioning and the business expanding of communication operating and maintenance market, so many enterprises enter capital market successively in recent years, including Sunnada, Huaxing Chuangye, Dingli Communication, ZCTT and Sunwave listed in domestic; Centron Telecom and Comba Telecom listed in Hong Kong; and GRRF listed in NASDAQ, etc. The rapid development of the industry also promotes the development of industry size. In 2009, the industry market size was about 25 billion Yuan, with the year-on-year increase of more than 30%; in 2010, the industry size of China network optimization surpassed 30 billion Yuan. Although the year-on-year increase in 2010 drop a little, it still maintained at more than 20%.
In terms of market segmentation of network optimization, it mainly divides into two parts: equipment and service, among which the planning, test and evaluation, and optimization belong to service industry; the test and evaluation system and coverage equipment belong to communication equipment manufacturing industry. In terms of the industry development in recent years, the equipment market grows relatively steadily and slowly, while the service market has relatively high profits, so it’s the future major development market for the industry. In 2010, the size of network optimization industry exceeded 30 billion Yuan, among which the test and evaluation system was 7.2 billion Yuan, accounting for 23%; the optimization services market was 13.6 billion Yuan, accounting for 45%, and the coverage equipment market was 10 billion Yuan, accounting for 32%. In the future, with the drops of equipment investment amount, the service market shares will be further improved.
At present, China is in a fast development stage of commercial application of 3G technology. The huge investment in 3G network and the formation of network operation and maintenance outsourcing will bring vast market space for network optimization industry. As of the end of May 2011, there were 714,000 3G base stations in China, among which the base stations of China Mobile, China Telecom and China Unicom are 214,000, 226,000 and 274,000 respectively. The rapid development of 3G will vigorously drive the development of upstream and downstream industries of communication equipment manufacturing industry, terminal industry, and information service industry. After domestic communication operators experienced the concentrated construction peak of 3G from 2008 to 2010, the 3G network has basically finished covering the major regions. The year of 2011 will witness a network optimization period, which focuses on improving the indoor coverage and improving the sensibility of customers.
In addition, from 2009 to 2010, with the spread of smart mobile phone, a large number of low-speed data services take up the most of network resources, and the 2G network flow shot up. In the middle of 2010, the 2G network utilization rate of China Mobile reached its historical peak, but the quality of network decreased a little bit. In many provinces, a large sum of investment capital added to network expanding and optimization, so as to maintained the over 75% of wireless utilization rate. However, during the period of “twelfth five-year” period, the smart mobile phone will be accelerated to popularized, it’s hard to release the traditional 2G network pressure of operators, so the expanding capacity and network optimization demand will still be prosperous. In the future, the network optimization demand for 2G will still maintain a steady growth.
Facing the huge market potentials, the enterprises in this industry should notice, with the end of 3G construction peak, the network optimization prosperity peak will be vanish soon, so the demand amount for network optimization products will decrease and the net margin will lower down; the network services will be steady, with a stable net margin. Meanwhile, the network optimization concentration is low. With the up shifting of operators’ purchasing power, the industry concentration tends to be intensified, therefore, the acquisition and merger capability of leading corporations plays an special important role in upstream and downstream industries of this industry. Moreover, the network optimization corporations should fully and precisely grasp the market trend and development trend of the whole industry, and comprehensively learn about the latest market direction and operational strategies of competitor, so as to grasp the opportunities and win the market!
With Forward’s long-term tracking and collecting market data of network optimization industry, we roundly and accurately analyze the industry structure system for you from the view of mastering the whole industry. This report mainly focuses on analyzing China current network optimization industry’s market size, development speed and competitive situation, depending on macro-prosperity of current network optimization industry and relying on its production and marketing conditions as well as the demand trend.
The most distinctive characteristics of this report is forward-looking and timeliness. Through analyzing forward-looking characteristic of abundant first-hand market data, we deeply and objectively dissect China network optimization industry’s development size and competitive landscape. Furthermore, based on future development tracks and years’ practice experience of network optimization industry, we conduct prudent analysis and forecast for network optimization industry’s future development trend. This report helps network optimization enterprises and investment enterprises to precisely grasp current latest developments of the industry. Afterwards, they can make wise operating decisions and define enterprises’ development directions. Moreover, this report is the first and weighty report on analyzing the industrial chain of network optimization industry and analyzing its leading corporations in an all-round and systematical way.
Here, we would like to express our sincere gratitude to State Information Center, Bureau of Statistics of China, International Information Research Institute, Chinese Academy of International Trade and Economic Cooperation, Tsinghua University Library, Development Research Center of the State Council and Beijing Essence Forward Research Center, for their great support when we conduct this report!
Notice: All the market data, especially corporations' ranking data in the report, only for business reference. Please do not take the data for enterprise publicity. Thank you! Or Forward shall not take any responsibility for any consequences!
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