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China's Telecom Firms Begin Fierce Competition
After a massive reshuffle, China Telecom and China Mobile officially opened this week, marking the beginning of fierce competition in China's telecom market.
With registered capital of 220 billion yuan and 51.8 billion yuan respectively, the two firms are both large state-owned enterprises. Other major competitors include China Unicom, China Netcom, China Jitong and the to-be-launched China Satellite.
China Unicom was set up in 1994. The government has reshuffled China Telecom cutting its mobile telecom business to establish China Mobile, and transferring its paging business to China Unicom. As consolidation is a world trend in the telecom industry, China is catering to consumer demand by introducing competition and better services, said an official from the Ministry of Information Industry.
The former China Telecom experienced little competition. "It's a global trend to opening the telecom market," said the official, noting that China will soon become a World Trade Organization member, which will result in more fierce competition. Currently, foreign investors are banned from operating telecom service in China.
Competition has brought good news for consumers. In the past two years, China's telecom fees and charges have been reduced twice.
The newly-established China Mobile recently promised to further cut down or get rid of certain fees this year, including change of name and waiting to be put through. In China, consumer have long complained of high telecom charges.
China Mobile will further expand its network and improve the quality of mobile calls, said Lu Xiangdong, vice-manager of the firm.
China Unicom has opened long-distance phone network since May in 24 cities across China. This means an end to the China Telecom' s monopoly. According to China Unicom, its long distance phone service will be available in 128 cities nationwide this year.
What the Chinese government wants is "orderly and cooperative competition", said Wu Jichuan, Minister of the Information Industry. So far, all operators have expressed their willingness to cooperate and to avoid duplicated construction and vicious competition.
China Mobile and China Unicom, two major operators engaged in mobile telecom, are now negotiating on inter-networks between the two firms.
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