Chinese Telecom Industry to Undergo Major Restructuring

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Last updated at: (Beijing Time) Tuesday, January 08, 2002

Chinese Telecom Industry to Undergo Major Restructuring

Four integrated telecom operators to be established

China will set up four integrated telecom operators that provide fixed-line, mobile, data and other basic telecom services in a move to make the telecom market more competitive, Minister of Information Industry Wu Jichuan said Monday.

The restructuring will take at least two years since most operators have separate licenses for either fixed-line or mobile service, said Wu.

Telecom reforms

Thanks to reform efforts that started in 1998, the telecom market is now becoming competitive in China. It has two mobile operators, three fixed-line operators and one satellite operator, Wu said.

The telecom reforms split monopolized multifunction telecom operators into single service providers, a necessary step to make the industry more competitive.

Two new fixed-line carriers to be launched

Wu also said that the two new fixed-line carriers, China Network Communications Corp and China Telecom Group, will be officially launched on February 12, the start of the Spring Festival.

Three stages of China's Telecom Reform

The first step for telecom reform is a "horizontal cut", that is, to separate enterprise from government administration. The second step is "vertical" in the way competition is to be encouraged among telecom enterprises. Policy support will be given to new enterprises; monopoly and unfair competition by old enterprises will be prevented. The third step is to be introduced a mechanism of competition by Chinese enterprises with foreign counterparts in China.

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