China Electric Company Enters Triple Play Fray

As China's government prepares to announce trial cities for triple play, the State Grid Corporation of China formally launched its fiber to the home (FTTH) trial in the northeastern city of Shenyang.

The move was a clear indication that the corporation will try to win contracts related to the scheme to converge the telecommunication, TV, and Internet industries. Many have assumed that China's cable and telecom operators would be the primary beneficiaries, but the entry of the state-backed electric company alters the competitive landscape with a new player that has massive resources and ready access to homes via the grid.

Investment and consumer spending related to triple play is expected to hit $100 billion over the next three years, according to Wu Hequan, VP of the Chinese Academy of Engineering.

The massive outlay has attracted the attention of businesses in a wide range of industries that triple play will touch upon, and electrical networks are considered one of the industries that will benefit most.

State Grid has plans to launch FTTH trials in at least 14 provinces and cities reaching 47,000 customers, a source close to the company said. The Shenyang trial is first and will reach a small community of 81 housing units. Construction needed to run the trial is expected to be completed in October.

FTTH are optic cable connections for individual residences. They deliver data more efficiently than copper coaxial cable and offer the speed and transmission quality needed to accommodate triple play.

There are many advantages to rolling out FTTH on a large-scale basis in conjunction with triple play. FTTH supports telecom, TV, and Internet services on one cable, plus it can collect utilities information to help introduce a power-saving smart grid.

When the government first proposed its idea to converge the services, it mulled over bringing together four networks, with the electrical grid included. But the electrical network was later looked at as a service that could be implemented simultaneously to triple play as a way of reducing the plan's overall cost.

Details of triple play have yet to be released, but an insider said documents circulating between government agencies show that part of the plan involves moving away from copper and toward optical fiber. And the deputy chief of the research bureau of the State-owned Assets Supervision and Administration Commission, Chu Xuping, recently said that triple play should take a smart electric grid into account.