The world's biggest telecom market should speed up the development of the next generation network (NGN) and try to be world a leader in new technology, officials and experts said at a Global NGN Summit in China 2004 in Beijing.

"The overall future of the NGN is still not clear, but it also means a historic opportunity for China and it should research industrial policies, regulatory policies, technologies, and business applications and then it will gain the advantage of being a first mover," said Xi Guohua, vice-minister for the information industry, in a speech to the delegates of the conference.

According to definition by the International Telecommunication Union, the major difference between NGN and the current telecom network is that the latter is based on circuit switching, while NGN is based on packet switching.

While the current telecom network provides data and voice services on different networks, NGN is able to provide different services on the same network with a much higher quality of service.

China has started trialing China Next Generation Internet (CNGI), as a major step in the development of NGN. There are five major telecoms involved and the aim is to build six provincial centers for the network. The bandwidth, the backbone of the network, is 10 gigabytes per second.

Wu Hequan, vice-president of the Chinese Academy of Engineering and a senior expert in telecom technologies and standards, said he agreed with Xi and pointed out that NGN would provide new avenues for telecom operators, which is just starting to recover the telecom depression of 2000.

Wei Leping, chief engineer of China Telecom, the largest fixed line telecom carrier in the country, also pointed out the urgent need for new technologies.

He said telecom revenues, after more than 20 years of high growth, accounted for 4 percent of China's total gross domestic product, much higher than the proportion of many developed countries, and it was quite difficult for the industry to maintain the high growth of past years.

He added the industry needed new technologies and that NGN was providing such an opportunity.

China Telecom, facing stiff competition from mobile telecom operators and China Netcom, will play an active role in developing and using new technologies.

In the past three years, the number of China Mobile's subscribers has grown 46 percent, while China Telecom's subscribers only increased 21 percent.

In the first quarter, China Telecom even suffered an unprecedented decline in its fixed line business.

Its share in the total telecom market also shrank to less than 30 percent, also for the first time in its history.

The telecom operator, which has been trying to lift its performance, has conducted two phases of trials of NGN in the past two years.

It will start trialling commercial use this year and aims basically to solve the quality of the carrier layer next year, a major step towards solving the quality of service problems in NGN, a major obstacle in its development.

However, it will still take years for NGN to become completely operational, as many issues remain to be solved.

Wu Quanhe said that issues including quality of service, network security, and feasible business models all needed further research and trials.

Liu Shumin, from domestic market research company CCID Consulting, said he believed that since the current net work capacity was enough to meet demand, telecom operators would focus on tapping the potential of the existing network first, while conducting trials on NGN in the next two or three years.

(China Daily May 17, 2004)