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Procuring Telecommunications and ICT Solutions in China
Neil Gallagher Director of
Sales - Europe 31st October
2018
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Agenda
A short history of Telecommunications in China
The role of Ministry of Industry and Information Technology (MIIT)
China’s Cyber Security Law
Using Encryption in China
Your Procurements Options For sourcing services in China
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A Short History of Telecommunications in China
Before 1994, the Ministry of Posts and Telecommunications (MTP) provided telecom services through its operational arm, China Telecom.
In 1994 China Netcom was established in competition to the former monopoly; China Telecom
In 2002 split China Telecom geographically into north and south: China Telecom - North kept 30% of the network resources and formed China Netcom (CNC) and 70% of the resources were retained by China Telecom - South or simply the new China Telecom.
In October 2008, China Netcom merged with China Unicom to become China Unicom.
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A Short History of Telecommunications in China - Regulatory environment - MIIT
Established in March 2008
State agency of the People’s Republic of China responsible for regulation and
development of the postal service, Internet, wireless, broadcasting, communications,
production of electronic and information goods, software industry
The MIIT grants licenses, supervises competition, promotes research and development
and service quality as well as for developing tariff rates.
The MIIT has built up a nationwide regulatory system composed of Provincial
Telecommunications Administrations (PTA) with regulatory functions within their
respective provinces.
Since 2014, the Cyberspace Administration of China is responsible for setting policy and
the regulatory framework for user content generated in online social activities on Internet
portals.
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Fiber broadband construction: The world's largest fiber access network. By the end of 2017, the penetration rate of
fiber users reached 82.7%.
4G quickly penetrated: 4G network has covered all cities and major townships, 4G users reached 997 million, and
the penetration rate is over 70%.
Global leader in broadband networks
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Fiber broadband user penetration rate comparison 4G user penetration rate comparison
Source: MIIT Source: MIIT,OECD
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Faster and more affordable Internetconnection
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Fixed broadband: The average access bandwidth exceeds 50Mbps, and the expenditure per Mbps is less than 1 yuan,
only one tenth of 2014.
Mobile data: The price per MB data is close to 2 cents, and the monthly average mobile data exceeds 2GB.
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China’s 5G Rollout
- China outstripping the US in the deployment of 5G
- U.S. carriers have built under 30,000 new cell sites since 2015
- China has built 350,000- China has spent $24 billion
more on 5G than the US
Source: Deloitte – August 18
Projected Number of 5G Subscribers in China
428 M
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China’s Cyber Security Law
Why? Ensure all Chinese Citizens online profiles remain private
All companies that collect and process personal data in China must comply by December 31st 2018.
Forcible since June 1st 2017 – Grace period granted until December 31st 2018
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China’s Cyber Security Law – What do I need to do?
Host personal data in Chinese Territories
Obtain user’s consent concerning the collection of their personal data.
We can assume the law retrospectively applies for all your existing Chinese citizen’s personal data
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China’s Cyber Security Law – What is Personal Data?
Any personally identifiable information – Full Name, ID Number, Birth Date, Email Address, Online identifiers such as IP Address, Cookies, phone number etc.
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China’s Cyber Security Law – What are the rules?
Data Transfer from China to overseas locations must comply with the Cyber Security Law.
Personal Data should be stored in China
User’s personal data collected must have their consent
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China’s Cyber Security Law – Data Transfer Abroad
Transfer of personal data abroad must be for legitimate reasons – is necessary and needed for business purposes.
Many Multi-national’s as a consequence are moving their data infrastructure from Hong Kong/Singapore to China. Apple and AirBnB are two examples and are hosting services in China for Chinese consumers
Many European companies still retain personal information on Chinese citizens outside of China – Hosted at HQ and/or Cloud platforms
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China’s Cyber Security Law – What if I don’t comply?
Companies that do not comply may face warnings and orders to comply
Confiscation of gains and fines
Suspension of websites
Business or Trade license in China removed
Some companies have already been warned and sanctioned.
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China’s Cyber Security Law – Recommendations?
Advice is to conduct a thorough security assessment and seek approval for any cross border transfer of personal data.
As part of assessment, review all data collection systems and make sure user is aware of scope and usage of data collected.
Ensure you have user consent to collect data.
Collected data should be recorded and time stamped, with evidence of user’s permission.
Update your privacy policies to cover to reflect assessment activity.
Don’t forget IOT devices that could be collecting or transferring personal information
Recommendation assessment every year.
Host all data collection systems in China
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Using Encryption in China
If your company is employing your own encryption over the Internet you could face issues.
Encryption technology is regulated by the Office of State Commercial Cryptography Administration (OSCCA), and only OSCCA-approved products are sanctioned for use in China.
No foreign encryption technology is allowed to be sold in China.
Solution is to use regulated operator’s own IPSEC solution - China Telecom’s encryption Technology is approved
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Procurements Options For sourcing services in China
Source locally in China
Source via your global provider
Source via a Chinese Operator with a European Presence
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Procurements Options For sourcing services in China
FeaturesLocal Procurement -China
Central Procurement -Via China Telecom Europe
Central Procurement - Via Global Provider
European Account Management
European Customer Service
English Speaking Help Desk
Contract Under European Law
Negotiable MSA
Negotiable SLA
Competitive Commercial Terms
Mandarin and English Speaking Operational Support
Mandarin and English Speaking Project Management
Local Billing - China
In territory Support in both European and Chinese time zones
In depth knowledge of regulatory environment
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Summary
The Telecommunications and ICT environment in China is unique
Understanding the environment is essential
Be wary of China’s Cyber Security Law – Take Legal advice if unsure
Using a specialist supplier has many advantages
• Neil Gallagher Director of Sales - Europe 31st October 2018 –[email protected]