China Railcom transferred to SASAC

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Last updated at: (Beijing Time) Saturday, January 31, 2004

China Railcom transferred to SASAC

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As approved by the State Council, the former China Railway Communication Co., Ltd was shifted to the administration of the State-owned Assets Supervision and Administration Commission (SASAC) on Jan. 29.

The hand-over ceremony was held in Beijing on the morning of Jan. 29. China Railway Communication Co. Ltd (China Railcom) is one of the six basic telecommunication service providers in China with a total asset of 35 billion yuan. It provides various communication services except public mobile communications (the other five communication service providers being China Mobile Communications Corporation, China Telecommunications Corporation, China Netcom Corporation Ltd., China United Telecommunications Corporation, China Satellite Communications Corporation). After the transfer, all the shares owned by the 18 shareholders will be delivered to the SASAC. The name "China Railway Communication Co., Ltd" will be changed to "China Railway Communication Corporation Ltd." The corporation will be run by itself as a State-owned, solely funded basic telecommunications enterprise.

Departments of the State Council concerned offered their great support to the transfer of China Railcom and made a series of rules on the adjustment.

As rules stipulate China Railway Communication Corporation will be a unit of first-grade in terms of the budget and will be in the list of the Ministry of Finance. China Railcom enjoys the resources and conditions for production and operation as required by the nation's unified distribution and is especially listed into the nation's relevant plans. It will continue to enjoy the preferential policies offered by the nation and the Ministry of Railway will exempt part of the debt transferred with the assets at the initial stage of the establishment of the company. The foreign loan gained by the Ministry of Railway but used by the company since its setting-up will be paid off by the Ministry of Railway. The Ministry of Railway will accumulate construction funds for the newly developed lines of network communication and the expansion of the existent lines and the net assets after the construction will be given to China Railcom in the form of State capital injection.

With the transfer, China's six basic communication service providers realized the unified management under the SASAC, which, as the report put it, will play a positive role in the supervision, administration and regulation of China's telecommunications market. The six enterprises will compete with each other on a equal basis and this will help create a good environment in the communication market.

Experts pointed out that the transfer will not have much influence on consumers due to the relatively small-scale business of China Railway.com. However, in the long run, it will be able to intensify the competition in the market, which will eventually benefit consumers.

Meanwhile, expert pointed out that as the several major telecommunications companies will be administered by the SASAC after the transfer of China Railcom, it is likely to have a new round of restructuring of telecommunication companies. Small and medium-sized companies such as China Railcom will face both opportunity and challenge.

Assets and businesses of China RailcomChina Railway Communication Co. Ltd was established on 26 December 2000 with 10.3 billion yuan of registered capital. It has 31 provincial-level branch companies and 316 municipal ones. Up to the year-end of 2003, the company had a total of 35-billion-yuan assets with a contingent of 70,000 staff. Now, except mobile phone business, it has a large-scale fixed communication network nationwide and has developed various kinds of basic value-added services such as fixed local calling, domestic and international long-distance calling, IP telephone, data transmission, internet and visual communication. The company owns 150,000-km-long communication line, 100,000 of which is optical fiber cable. Presently, switchboards in central offices have exceeded 18 million lines.

By People's Daily Online

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