China needs to speed up the development of its telecommunications industry by introducing more competition - a move that would weaken the market power of heavyweight operators, a top official said yesterday on the sidelines of the ongoing Communist Party of China National Congress in Beijing.
"Restructuring plans are coming in, providing different solutions," said Lou Qinjian, deputy minister of the Ministry of Information Industry. "The linchpin is to secure the rapid growth of the sector and bring more benefits to people."
China now has four major players in the telecommunications industry, with China Mobile and China Unicom licensed to supply mobile services and China Telecommunications and China Netcom in fixed-line services. As the number of cell-phone users continues to outpace land-line subscribers, there is a sharp difference in operational results.
Last year, for instance, China Mobile contributed 70 percent to 80 percent of the industry's total profit while land-line operators were on the defensive.
According to their half-year reports, China Mobile recorded a net profit of 37.9 billion yuan (US$4.99 billion), while China Unicom posted 5.65 billion yuan, China Telecommunications 13.48 billion yuan and China Netcom 6.713 billion yuan.
From January to August, the average monthly rise in cell-phone users amounted to 6.82 million, more than 10 times the rise for land-line subscribers. More than 378.5 billion short messages were sent out in Chinese, up 38.3 percent from the same period last year.
Lou didn't specify the objectives of the restructuring. But a previous report in Caijing, a financial publication in Beijing, said the restructuring would be mainly targeted at balancing the development of major operators. For private and foreign capital, entering China's domestic telecommunications operational market is still "a mission impossible," the report said.
Lou also said there was no timetable for the issuance of third-generation telecommunications licenses as government departments were still considering how to manage 3G services.
He said there was still no decision on the 3G technologies to be used during the Beijing Olympics next year.
"Our major concern is whether the technology can satisfy the needs for bandwidth and transmission speed," he said.
(Xinhua News Agency October 19, 2007)
