April 6, 2006 6:18 pm

AT&T executive calls for China deregulation

China should deregulate its telecoms market and ease entry for foreign competition and investment, Forrest Miller, group president of AT&T, the US’s biggest telecoms group, has urged.

In an unusual expression of public discontent from a pioneer in China’s telecoms market, Mr Miller also said China should re-examine and update its policies on technology amid rapid development in the sector.

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“While China is making noteworthy progress in opening markets since its WTO accession, there have been restrictive shifts as well,” said Mr Miller in Beijing on Thursday.

Mr Miller, who was speaking to foreign and Chinese companies executives, appears to want to put pressure on the Chinese government because AT&T is keen to win contracts before the 2008 Beijing Olympics.

His comments highlight a growing sense of frustration by multinational companies in sectors such as telecoms and media that have been limited by rigid regulation in China.

Rupert Murdoch, chairman and chief executive of News Corp, said last year his media group had “hit a brick wall” in China and that Chinese authorities were no longer opening up to international media companies.

AT&T was the first multinational telecoms group to set up a sino-foreign telecom service joint venture in China, in 2000. But executives have complained privately that the joint venture has not achieved much over the past few years because it is restricted to Shanghai only.

AT&T has also been limited by its 25 per cent stake. The joint venture is controlled by a subsidiary of China Telecom, with a 60 per cent stake, while the Shanghai municipal government has a 15 per cent interest.

The executives have also said that China requires foreign companies to commit investment of at least US$250m if they want to apply for a basic telecom license.

“Will the government, for example, ease the barriers for entry into the market?” asked Mr Miller on Thursday.

AT&T’s business in China grew 44 per cent year-on-year on 2005, four times higher than the average growth in Asia-Pacific.

Additional reporting by Mure Dickie in Beijing

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