Ovum believes that regulatory barriers, fragmented ownership structure and a lack of expertise have seriously undermined cable operators' competitiveness against DSL providers. This is in stark contrast to the North American market.

As for wireless broadband, Lee says that it is still at an immature stage, but the emergence of VoIP is giving operators new hope for seeing returns on their WLANs.

He said growing IPTV deployment is expected to encourage broadband uptake in China.

"The two DSL operators rolled out extensive IPTV trials over 2005 in collaboration with the IPTV licensees Shanghai Media Group and CCTV. Following Harbin, Shanghai will be the second city to begin commercial service by the end of September 2006," Lee said.

Ovum forecasts that prospects for further broadband development in China are bright, but significant uncertainties remain.