IT authorities advocate restructuring telecommunications industry Thursday, October 18, 2007

China needs to advance the development of telecommunications industry by introducing in more competition to weaken the monopoly of heavyweight operators, deputy minister Lou Qinjian of the Information Industry said in Beijing Thursday at a news briefing on the sidelines of a national congress of the Communist Party of China.

"Restructuring plans are coming in, providing different solutions. The linchpin is to secure a rapid growth of the sector and bring more benefits to people," he said.

Currently China has four major players in the telecommunications sector, with China Mobile and China Unicom licensed to engage in mobile services and China Telecommunications and China Netcom, to fixed-line services. As the number of cellphone users continues to outpace landline subscribers, there is a sharp difference among their operational results.

Last year, for instance, China Mobile contributed 70 to 80 percent of the industry's aggregate profits while landline operators were simply put to defensive. According to their half-year reports, China Mobile recorded a net profit of 37.9 billion yuan (4.99 billion U.S. dollars); while that of China Unicom, 5.65 billion yuan; China Telecommunications, 13.48 billion yuan; and China Netcom, 6.713 billion yuan.

From January to August, the average monthly rise in cellphone users stood at 6.82 million, more than ten times of the rise for landline subscribers. More than 378.5 billion short messages have been sent out by the Chinese, up 38.3 percent from the same period of last.

Lou didn't specify the objective of the restructuring. But a previous report by Caijing, a financial publication in Beijing, said that the restructuring would be mainly targeted at balancing the development of major operators only. For private and foreign capital, entering China's domestic telecommunications operational market is still "a mission impossible".

Lou also disclosed that there was no timetable for the issuance of 3G licenses as relevant departments were still mulling over the management and operational mode of 3G services.

He said that it was undecided what kind of 3G technologies would be used during the Beijing Olympics. "Our major concern is whether the technology could satisfy the need in bandwidth and transmission speed," he said.

For third-generation wireless services, China has three choices, all based on the code division multiple access (CDMA) technology -- the US-made CDMA 2000, the European WCDMA and China's own TD-SCDMA.  

China's telecommunications sector sees double-digit growth in Jan.-Aug. period
Provisions on Administration of Foreign-Invested Telecommunications Enterprises
Editor: Wang Hongjiang
Source: Xinhua