Pilot scheme to open and improve mobile telecoms market gets approval in China

By Rizza Sta. Ana

Dec 26, 2013 01:03 PM EST

According to a Reuters report, China has given its approval to implement a pilot scheme that will allow private firms to ride on the three dominant telecommunications providers of the country to offer its own-brand mobile services, prompting the opening of the largest mobile phone market in the world to more competition. In a statement on the website of the Ministry of Industry and Information Technology (MIIT) on Thursday, it announced that it has approved 11 private "virtual carriers" to allow reselling of mobile telecommunications services.

The pilot scheme, as explained in the report, will allow private companies to offer their potential customers discounts or more attractive deals, which will raise competition in a market initially dominated by China Mobile Ltd, China Telecom Corp Ltd and China Unicom Hong Kong Ltd, of which the report noted that all are state-owned enterprises.

MIIT added in its statement, "It's a milestone. It will draw private investment, and stimulate competition and innovation in the telecoms sector... giving a wide range of consumers greater choice and better service."

The pilot scheme, said the official Xinhua news agency, will have privately-run companies purchase mobile communication services in bulk from providers such as China Mobile and repackage them to be able to offer them to end users.

Among the 11 companies that acquired the approval as part of the pilot scheme were online retail giant Alibaba subsidiary Net.cn, major Chinese mobile phone retailer D.Phone and rival e-commerce firm Jingdong, Beijing Bewinner Communications Co and Shenzhen-listed Telling Telecommunication Holding Co.

MIIT also said in its statement that the approval documents had laid out rules regarding consumer rights and information protection, service charges and quality and market supervision. On the other end, the statement did not provide information on the effect of the pilot scheme to network providers.

China Mobile leads the domestic market with a subscriber base of over 760 million. China Unicom and China Telecom followed with 280 million and 185 million subscribers respectively.

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