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China's Telecommunication Market Gradually Opening up to Foreign Ownership
added: 2006-11-09

According to Research and Markets China's telecommunications market is one of the largest in the world and remains almost completely under the thrall of the state; therefore foreign-owned companies have little or no chance of directly operating networks or providing services in mainland China, except in co-operation with state-owned or approved entities.

Nevertheless, as a member of the World Trade Organization (WTO), China has committed itself to allowing foreign operators to gradually increase their investments in the Chinese telecommunications market. Currently, the ceiling on foreign ownership in basic value-added telecommunications service providers is set at 49%. Foreign ownership of mobile communications operators is currently limited to 35%, and then only in certain operations in selected areas of the country. Foreign ownership of wireline operators was barred until recently, but was opened to a limit of 25% (in three cities) in 2004.

Only a handful of licensed basic services operators currently exist. In the fixed line sector, China Telecommunications Corporation (China Telecom) owns fixed networks in 21 provinces, autonomous regions, and centrally-administered municipalities in southern China, including Shanghai, Guangdong, Jiangsu, and Zhejiang. China Netcom Group owns fixed networks in 10 provinces, autonomous regions, and centrally-administered municipalities in northern China. In all, China Telecom controls approximately 70% of the nationwide network established by the former Ministry of Posts and Telecommunications (MPT), while China Netcom controls the remaining 30%. Hong Kong-based divisions of China Telecom and China Netcom, holding the individual provincial fixed-line operating companies of the parent companies business, are listed on the Hong Kong and New York stock exchanges. State-owned China Tietong also offers fixed-line services at the local and long-distance levels.

There are two principal mobile communications operators: China United Communications (China Unicom) and China Mobile Communications. Both have Hong Kong-based divisions that own and manage the networks and service provision divisions of the parent companies, and which have also listed their shares on the Hong Kong and New York stock exchanges.


Source: Business Wire

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