© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: January 9, 2013 8:15 pm
China has opened up the prospect of private sector competition in its national mobile telecoms market, with a consultation about whether major state-controlled carriers should be allowed to sell some of their spectrum holdings to other groups.
The Chinese Ministry of Industry and Information Technology said this week that it was looking for views on proposals to allow the three state-backed groups to begin reselling spectrum that could be used for rival telecoms services.
The mobile market in the country, the biggest in the world by subscribers, is divided up into three groups – China Telecom, China Unicom and China Mobile . China Telecom and China Unicom also operate fixed-line businesses.
In a statement, the ministry said that this was part of the state council’s desire to “encourage and guide the healthy development of private investment”, which could be the first step towards a wider liberalisation. The ministry said that it would solicit public opinion until February 6.
If the trial were to proceed, private companies would be allowed to buy spectrum and offer services under their own brands to consumers. Most Chinese mobile users are still using phones for voice networks over spectrum allocated for 2G use, although numbers using 3G services, which allow data services such as internet access, are growing quickly. There are still no commercial licenses awarded yet for superfast 4G broadband, which is now being rolled out in the US and some European markets.
However, it is not clear what sort of infrastructure investment would also be needed for a new entrant to carry mobile services, and whether the physical network infrastructure of the major carriers would also ever be opened up for third party use. Without such resources, it would be difficult to launch telecoms services of any scale.
Even so, one analyst who declined to be named said that the move appeared to be the start of the thawing of the Chinese telecoms market, which he said had been controlled by the state so far.
The trial is also not expected to be open to foreign companies, which can only buy minority stakes in Chinese firms. The large Chinese telecoms groups have listings in China and Hong Kong, with Telefónica, the Spanish telecoms group, owning a 5 per cent stake in China Unicom, for example.
There has already been greater private sector activity in the telecoms equipment market, where Western companies such as Ericsson and Alcatel-Lucent are well-established providers of equipment and services to the large Chinese mobile carriers. Competition is also fierce among the hundreds of private-sector, domestic handset makers.
The move comes as the Chinese government is taking steps to more tightly oversee communication over the internet in the country, with reports of plans for the rollout of real-name registration system for all internet users that is already in place for phone users.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in