China Broadcasting and Television Network is listed: facing the problem of cable TV network integration

After four years, China Radio and Television Network Co., Ltd. (hereinafter referred to as State Grid Corporation) was finally listed.

Yesterday (May 28), at the SARFT compound at No. 2 Fuxingmenwai Street, Beijing, SARFT Director Cai Fuchao, SARFT Deputy Director Nie Chenxi and relevant leaders of the State Radio, Film and Television Corporation attended the unveiling ceremony.

Many industry insiders believe that the establishment of State Grid Corporation of China has taken the integration of the three networks one step further and is expected to become the fourth largest operator after the three major telecom operators. However, the reporter noted that the road for State Grid Corporation of China to become the fourth largest operator is not smooth.

Yang Peifang, chairman of the China Information Economics Society, said in an interview with the "Daily Economic News" reporter that State Grid Corporation should identify its own advantages, position itself well, and actively cooperate with other industries based on different divisions of labor.

Facing the difficulty of cable TV network integration/

According to the information, China Radio and Television Grid Corporation was registered on April 17, 2014. It is a wholly state-owned enterprise with a registered capital of 4.5 billion yuan. Its business scope includes cable TV network planning, construction, operation and maintenance, as well as technical research, technology development and information consulting for the above-mentioned business.

In fact, the establishment of State Grid Corporation can be traced back to 2010. At that time, the State Council proposed in the "Overall Plan for Promoting the Integration of Three Networks" that 2010 to 2012 would be the pilot stage of the integration of three networks, with the focus on two-way entry of radio and television and telecommunications services, cultivating qualified market entities, and network upgrading and transformation, and establishing a national cable television network company to initially form an industrial structure with moderate competition.

Today, China Telecom (50.21, 0.44, 0.88%) has entered the 4G era, and State Grid Corporation has finally arrived. Independent telecom analyst Fu Liang said in an interview with the Daily Economic News that the establishment of State Grid Corporation is a welcome step forward, but it has wasted the "golden four years" and missed the four years of playing the most active role in the integration of the three networks.

Tao Xujun, deputy general manager of the communications strategy department of Nomura Research Institute, told the reporter of "Daily Economic News" that after the establishment of State Grid Corporation, it will be necessary to integrate the capital, technology and content of cable TV companies in various provinces, but this will be very difficult to complete and it is estimated to take a long time.

Due to historical reasons, most cable TV companies in various places are jointly established by local governments and local radio and television companies. The advantage of this model is that it solved the problem of fund raising in the early stage of cable TV development and created conditions for the rapid popularization of cable TV. However, because of this, cable TV networks in various places are independent networks, and it is difficult to integrate them into a national network. In addition, local interests are involved and they compete with each other. The biggest problem is that these local cable TV companies have little relationship with the State Grid Corporation.

It is obvious that it is not an easy task for State Grid Corporation to take over cable TV companies in various places.

Data shows that the total asset assessment of the national cable TV network is about 150 billion yuan, with a net asset of more than 70 billion yuan, while the registered capital of State Grid Corporation of China is only a drop in the bucket. If administrative intervention is used, it is inconsistent with the market principle, so the integration of State Grid Corporation of China faces considerable embarrassment.

Wu Chunyong, an expert in three-network integration research, told the reporter of "Daily Economic News" that if State Grid Corporation can bring greater benefits to local cable TV companies, local governments will naturally be willing to integrate. Otherwise, even if it is forced, the effect will not be very good.

The road to operation still needs to be explored/

Although the State Grid Corporation of China faces many challenges, it is not without advantages. The cable TV network, 700MHz frequency band and content production and broadcasting rights are all advantageous resources of the State Grid Corporation of China.

According to Dazhihui Astock News Agency, after the State Grid Corporation was registered and established in April this year, it began to strive for broadband policies and planned to apply for the construction of IDC (Internet Data Center), which can provide users with services including applying for domain names, renting virtual hosting space, and server hosting and leasing.

Wu Chunyong told the reporter of "Daily Economic News" that if State Grid Corporation applies for an IDC license, it can build its own TV content data center and concentrate TV content from various provinces in State Grid Corporation. This will give it an advantage in competing with telecommunications and the Internet, such as increasing the revenue from content copyright cooperation or interconnecting with other networks.

In addition, the 700MHz frequency band of the radio and television system has always been a high-quality frequency band that telecom operators have long dreamed of. The 700MHz frequency band is in the low frequency band, has the characteristics of wide signal coverage and strong penetration, is suitable for large-scale network coverage, and has low networking costs, and is known as the "golden frequency band."

In 2008, Verizon spent $10 billion to acquire the 700MHz spectrum from the US government. Before the issuance of TD-LTE 4G licenses this year, telecom operators were calling for and striving to use 700MHz to quickly deploy 4G networks, but failed to do so.

Therefore, many industry insiders suggest that State Grid Corporation apply for a 4G network license. In fact, according to the content of the three-network integration, State Grid Corporation can indeed carry out mobile broadband services. But the problem is that China's telecommunications industry has entered a "red ocean" in the competition for users. Users have long been saturated, and it is almost impossible to increase the number. They are all operating on existing customers, and 19 virtual operators have joined. Therefore, State Grid Corporation does not have much competitive advantage in entering the market, and it also faces a large amount of infrastructure construction, which is also a considerable capital expenditure.

In an interview with a reporter from the "Daily Economic News", Yang Peifang, chairman of the China Information Economics Society, put forward suggestions for the development of State Grid Corporation of China. State Grid Corporation of China should identify its own advantages, position itself well, and actively cooperate with other industries based on different divisions of labor.

Wu Chunyong believes that the establishment of State Grid Corporation is only the first step. The framework needs to be built first, and how to operate it still needs further exploration. The fourth largest operator is expected to be put in quotation marks because the cable TV network is still difficult to achieve interconnection.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.