The preparatory team, headed by Zhou Zehe, president of China Telecommunications Broadcast Satellite Corporation (ChinaSat), has already been formed. ChinaSat will be a major component of the new group.

China Satellite Communications Corp will operate satellite-related businesses in telecommunications, broadcasting and other sectors, like the transmission of data, video, audio signals, channel renting and satellite related export and import businesses, according to the MII.

China has six licensed basic telecom operators: China Telecom, China Unicom, China Mobile, China Railcom, China Netcom and Jitong. They focus on fixed-line, mobile and Internet protocol telephony sectors respectively.

Entry of the satellite telecom firm will make China's telecom market more integrated with networks on the ground, under the sea and in the sky.

The MII has given approval for the new company to operate Internet protocol telephony business, which will be carried out by ChinaSat before the group starts operation, said the MII official, who preferred to be unnamed.

The proposal to form a satellite telecom group was made in 2000, when China Telecom was split into four parts according to different businesses. The satellite group is the last one to finish reorganization.

Satellite communication will complement the fixed-line or mobile telecom devices, said Jim Lin, chief telecom analyst of Frost & Sullivan, a US-based research firm.

"Total coverage is satellite telecom's top advantage," said Lin.

Satellite could provide seamless coverage for people with special needs like those who live in remote mountains or places that fixed-line and mobile networks cannot reach.

However, it will not soon become a strong rival for the mainstream telecom operators due to the high costs, he said.

But satellite is very competitive in wireless Internet access services, according to Lin.

After 16 years of development, China's satellite sector plays an important role in transporting data, civil air ticket booking, ocean weather forecasting, seismological observation and many other areas.

(People’s Daily 04/21/2001)