How the Government Should Manage the Telecommunication Industry

Speaking from the overall perspective, the government's managerial work should be to maintain order and fair competition in the telecommunications market.

Currently, from the perspective of business entities, China has already started to become competitive. However, in reality, China Telecom has an absolute advantage in the fixed communication field while China Mobile Communication holds an absolute advantage in the mobile communications field, so it's pointless to talk about competition.

So, the government should help support the development of startups, open up the market further and allow more domestic and foreign investors to enter China's telecommunication market. On the other hand, China is a big developing country whose overall level of telecommunications is lagging. Thus, the state should continue to support a group of key telecommunication enterprises and raise their overall competitiveness to give them stronger footing in the fiercely competitive international telecommunication industry. The government should use the management of telecommunication resource, market entry, network link and fees to achieve these objectives.

Why Macro Management is Necessary?

Various countries around the world, particularly developed nations, have been implementing the so-called "deregulation" work while our government emphasizes the need to increase macro-management. It seems to run against the global trend, but in fact, foreign deregulation refers to the loosening the restrictions to market entry and approval of charges while increasing management over networks and telecommunication resource is enhanced.

Macro-management should be suited to the actual situation of market competition. The greater the market competition is, the less the government needs to manage; the weaker market competition is, the more the government should interfere. Because there still is not real competition in China's telecommunication market and laws and regulations still need to be improved, the government needs to manage. Without it, dominating enterprises in market could easily use their position to wipe out startups and monopolize the market. As competition intensifies in the future, China will undoubtedly rely more on market mechanisms to promote the development of telecommunication industry. Only in areas where market mechanisms have failed will the government play an important role.

The government should actively protect the interests of the consumers. Telecommunication facilities are the most important infrastructure facilities in today's society. Ensuring the safety and openness of telecommunication network and communication is the responsibility of government. The telecommunication industry is also an important growth sector in the global economy, especially with the advent of the Internet era. It is very significant to increase the competitiveness of China's telecommunication industry and develop the IT industry to meet the challenge of new economy.

The telecommunication service affects the immediate interests of billions of people. Currently, there are many problems with the telecom service which the masses are unsatisfied with and need to be improved.

Way of Managing must be Changed

The government must reform its own macro-management practices to meet the requirement for WTO entry. Take the "equal nation treatment principle" and "transparency principle" as examples, the present way of management cannot meet their demands.

In the past, the macro-management of China's telecom industry mainly issued a lot of rules and documentation. These rules and documentation were unreasonable, lacked stability and openness. Entry into the WTO is a highly intensified shock to traditional managerial practices. What is urgent now is to enhance the legislation in the telecommunication field and base the telecommunication management on it.

After separating the functions of government and enterprise, the government's macro-management will be more arduous and complex than before. With the exception of postal enterprises, the business units managed by the state are to be transformed into companies in industry. The managerial methods are to be changed from administrative orders to legal means. The managerial focuses are to be establishing real competition and guaranteeing fair competition. The management goals are the full development of telecommunication industry and serving the information network of China. The managerial system should adopt the power separation of various levels of administrative organs.

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