China mandates consolidation in cable system operators market

APRIL 5, 2010 By Stephen Hardy -- The cable system operators market in China, which has been characterized by players of a variety of sizes, is headed for consolidation at the provincial level. Simultaneously, a series of triple-play test projects could lead to some commonality of last-mile infrastructure within the next two or three years. Both projects could lead to a more unified set of requirements that vendors who want to address this market will have to meet.

The consolidation effort is scheduled to reach completion by the end of this year, say sources in the vendor community. The resulting multiple systems operators (MSOs) will be led by a provincial head. Sources expect the consolidation of operations will also lead to more centralized decision-making regarding technology, architectures, and equipment suppliers, the sources say.

Meanwhile, the Chinese government has agreed to grant triple-play service licenses to cable systems operators. To evaluate the various architecture options, 10 cities will be selected to conduct technology and architecture experiments over a two-year period, the sources say. The goal is to recommend approaches for nationwide triple-play rollout in the 2012-203 time period.

China’s State Administration of Radio, Film, and Television (SARFT) has already recommended a coax-based approach for the trials. However, fiber-based approaches, particularly RF over glass (RFoG) and PON, are also expected to be tested, say the vendor sources.

The list of cities that will participate in the trials is expected to be released by this August. The sources speculate it will include Beijing, Shanghai, and Shenzhen.

The consolidation and upcoming architecture trials have already begun to affect how systems vendors operate. For example, Aurora Networks recently announced it has supplied equipment to the Agricultural Reclamation Headquarter (ARH) of HeiLongJiang for the first two phases of a network upgrade. In these parts of the project, the ARH has enhanced connection of its secondary headends to its main headend to support digital video transport as well as upgraded its data-services capabilities.

Aurora Networks has supplied analog transmitters, EDFAs, dispersion compensation modules, DWDM capabilities through the company’s VHub platform, and SMART Media Converters. The next major phase of the project will address customer connections. However, says Eddie Feghali, vice president of sales, Asia for Aurora Networks, the project’s budget will hinge on whether it is part of the triple-play trials. Feghali reports that the ARH has shown interest in RFoG technology for the last-mile portion of the network upgrade.