China to Double Broadband Users by 2011, Says MPA

By Mark Lee
© Bloomberg News

China may double high-speed Internet users by 2011 as the nation’s economic growth makes the service more affordable for a growing number of people, a research report said today.

The country will have a total of 126 million broadband users in four years’ time, Vivek Couto, executive director of Hong Kong- based research firm Media Partners Asia Ltd., said in a telephone interview. China added 14.4 million broadband subscribers last year for a total of 51.9 million, according to government data.

China Telecom Corp. and China Netcom Group Corp. (Hong Kong) Ltd., the country’s two largest providers of broadband connections, are increasing sales of the services to boost growth as demand for fixed-line telephone connections slows. Broadband services allow users to download Internet content such as videos and music faster than traditional analogue modems.

“Demand for broadband is driven by economic growth and the increasing availability of personal computers,” said Couto. The popularity of Web services such as online games, as well as Internet protocol television, are also boosting demand, he said.

The high-speed Internet market may be worth $9.2 billion in 2011, compared with $4.5 billion last year, Couto said.

China Telecom gained 7.3 million broadband customers last year for a total of 28.3 million. China Netcom gained 3.6 million broadband users in 2006, taking its total to 15.1 million.

Sales of broadband services accounted for 14 percent of China Telecom’s total revenue of 167.2 billion yuan ($21.7 billion) last year, and 12.3 percent of China Netcom’s sales of 85.5 billion yuan, the two companies said.

By 2011, 28 percent of China’s households will have broadband connections, Couto said, more than double the 13 percent at the end of last year. By comparison, Japan, which had 26.1 million broadband users, had a market penetration rate of 55 percent at the end of last year, Couto said.