Telecom licenses issued to 11 private firms
January 16, 2014 Category Uncategorized
The Ministry of Industry and Information Technology (MIIT) issued telecommunications service licenses to 11 private firms on December 26 in the latest move to open up the state-controlled industry. The firms, or virtual carriers, will be allowed to offer mobile services directly to consumers through purchasing bandwidth from China Mobile, China Telecom and China Unicom. The firms included online retailer Jindong; Net.cn, a subsidiary of e-commerce giant Alibaba; handset distributor Tianyin; mobile phone retail chain store D.Phone Group; and BusAP, a media provider on public transport. Telecom carriers have to provide bandwidth at “fair or favorable” prices to the virtual carriers, the Ministry said. Applications for licenses are open until July, the Ministry added. Seventy companies bid for the first batch of virtual licenses. China’s top two home appliance retailers, Suning and Gome, had also joined the bid but failed. Encouraging private capital to enter the nation’s telecom industry, the Ministry said, will inject new vitality into the market and bring further prosperity to the sector. The new players could offer traditional services like voice calls and text messages as well as proprietary value-added services such as mobile games. Foreign equity is only allowed in joint ventures related to “value-added market segments”, such as data centers, and foreign investors are not allowed to hold more than 49% of a joint venture. Five areas, including call centers and home internet access, will however be opened to full foreign ownership. Firms providing online data and analysis services will have a cap of 55% foreign ownership. Foreign companies looking to offer these services will have to base their infrastructure in the Shanghai free trade zone (FTZ), but will be allowed to offer services across the country. The only exception is home internet access, with foreign-owned firms allowed to offer the service only to consumers within the free trade zone.
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