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Chinese private firms may offer mobile services directly to users

By Zhu Shenshen   (Shanghai Daily)

09:01, January 09, 2013

CHINESE private firms could soon be allowed to offer mobile communications services directly to consumers by purchasing bandwidth from telecommunications carriers, a first step in opening up the state-controlled telecom industry, the industry regulator said yesterday.

The Ministry of Industry and Information Technology is proposing a two-year trial to allow companies to repackage and rebrand services to consumers in a move that analysts see as an end to the state-controlled telecom industry monopoly.

"The new measure is a moderate attempt to break the monopoly and bring opportunities to private companies, even small and medium-sized ones," said Xiang Ligang, telecom analyst and founder of professional website CCTimes.

The new policy, which is expected to create "virtual carriers," is also a new opportunity for companies such as Tencent and media groups to penetrate the mobile Internet sector, analysts said.

It is the latest detail in China's bid to promote and introduce private capital in the telecom industry, which aims to boost competition and service quality, the ministry said.

Private firms, which must have telecom work experience and a team more than 50 people, can apply for the services. They can purchase bandwidth from carriers China Mobile, China Telecom and China Unicom, which have to provide bandwidth at "fair or favorable" prices, the ministry said.

It is collecting public feedback on the proposal until February 6.

The State Council, China's Cabinet, said in May 2010 that it would encourage private investment in the telecom industry and promote competition.

Foreign investment is still limited to minority holdings in listed telecom firms, and foreign companies will not be allowed to apply to become "virtual carriers" at present.

By the end of November, China Mobile had 707 million mobile users, China Unicom 236 million users, and China Telecom 158 million.

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