BEIJING, July 1 (Xinhuanet) -- The State Council has chosen 12 cities and regions, including Shanghai, in a trial of "Three Network Convergence," which will create cross-platform services like Internet Protocol TV, mobile TV and online broadcast groups.

The statement, published on the Ministry of Industry and Information Technology Website, represented the official start of network convergence among broadcasting, telecommunications and Internet networks in China, after debate and testing since the policy was first proposed in 1998, industry insiders said.

The first batch of pilot cities includes Beijing, Dalian in Liaoning Province, Harbin in Heilongjiang Province, Shanghai, Nanjing in Jiangsu Province, Hangzhou in Zhejiang Province, Xiamen in Fujian Province, Qingdao in Shandong Province, Wuhan in Hubei Province, Changzhutan region (including Changsha, Zhuzhou and Xiangtan cities) in Hunan Province, Shenzhen in Guangdong Province and Mianyang in Sichun Province.

Network convergence will permit telecom and broadcasting industries to enter each other's area, offering IPTV, mobile TV and online broadcasting organizations on one unified and connected network.

In the future, people can use a mobile phone to watch TV and surf the Internet, use a TV to phone other people and use computers with online tools to phone others and watch TV, said Zeng Jianqiu, a professor at Beijing University of Post and Telecommunications.

The General Administration of Press and Publication will regulate content and distribution of IPTV and mobile TV, according to Wang Xiaojie, general director of GAPP's science and technology division.

"The TV set (300 million in China) is the most popular and affordable device for new integrated services, compared with computers," said Wang. "The biggest bottleneck of the current TV network is single-way transition but it will change through the network upgrade in the pilot cities."

Shanghai Media Group, the city's No. 1 media conglomerate, said it would develop mobile TV, IPTV and VOD (video on demand) services during the testing, according to Zhang Dazhong, vice president of SMG.

Shanghai has led network convergence nationwide. The city had more than 1 million IPTV users by 2009, ranking it top in China. Meanwhile, China Mobile has launched mobile TV services in the city.

Economically speaking, the convergence will boost the demand of network upgrades, which brings opportunities for chip, optical cable and network equipment makers, according to Goldman Sachs.

But the detailed plans of the policy hadn't been decided until last month because both broadcasting and telecom firms were seeking to lead the network integration. The two regulators, including MIIT and GAPP, also differed on regulation scope.

"It (Three Network Convergence) has problems, not on technology but on the institutional problem of the regulation," said Wu Hequan, vice president of the Chinese Academy of Engineering.

But the release of the first testing regions means the problem has been solved, analysts said.

Editor: Xie Fang and Liu Xi

Source: Shanghai Daily