Patterns of Development, Operation and Regulation of Telecommunications Convergence: a Case Study of China

Convergence is emerging around the world as a result of development of technology and market demand. Serving as a high performance of telecommunications, it can greatly improve socioeconomic development in developing countries according to the theory of telecommunications and economic development. Convergence is occurring in China with China’s fast economic development and market growth. China has had the technological capacity, capital and market for promoting convergence. However, convergence did not develop as fast as people would expect. This thesis probes why and how regulation and policy should adapt to the new situation of convergence. This thesis exams the current development on different layers of convergence, the trend of convergence market and regulatory environment and possible reform scenario in China. Research done with this thesis shows that the regulatory environment now is the major barrier for convergence development in China. It is difficult for different iii communications sectors to enter into each other’s market because of the regulatory restriction. The telecommunications industry cannot reform and perform fully in accordance with the criterion of convergence. Thus the technological advantages of convergence cannot be fully applied to Chinese telecommunications industry and the market demand cannot be fully satisfied. To promote convergence, Chinese government must reform the regulations. Telecommunications industries should be regulated according to their functions. Cross administration must be eliminated. China is likely to implement some similar reforms due to her pressing claim to the global economic framework in the WTO. However, even though these reforms happen, convergence will still develop gradually in China due to China’s socioeconomic development level. Convergence will be most likely to service high end users. VoIP will be the most popular convergence application in China.