Telecom Industry Should Be Open to Private Firms

Wei Wenlin, a National People's Congress deputy, proposed opening China's telecom market to domestic privately-owned enterprises before the sector is opened to overseas investors after it joins the World Trade Organization. Wei's proposal was supported by many deputies, including Li Yining, a famous economist from Beijing University.

Wei, a senior professor of technology at Qinghua University, said that the government should give the private enterprises equal rights to compete with State-owned Enterprises.

Recent statistics show that the telecom sector's income was 243. 3 billion yuan (about 29.38 billion U.S. dollars), contributing 3 percent to the national gross domestic product.

While, the most profitable aspect of the telecom sector, the Internet Service Provider (ISP) has been still under the control of State firms including China Telecom and China Unicom.

According to the Sino-US agreement on China's WTO entry last year, China will allow 49 percent overseas investment in all services, and 50 percent foreign ownership for value-added services in two years and paging services in three years. With the development of private firms in the ISP and paging businesses, telecom powers are eyeing the big profit margins available in mobile phone, fixed line and Internet content providing fields.

Wei said that it would be a good rehearsal to allow domestic private firms to enter the field first. While strict regulations are needed to avoid shoddy services and economically suicidal price wars.

Plus, more rivals will hasten structural and management reforms of the State firms while generating more business opportunities for the whole industry.

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