Telecom Monopolies Urged to Be Curbed

China needs to further break up monopolies in its telecommunication sector in the coming years to promote competition and help the fledgling sector develop a more competitive edge, said a senior expert.

The move is seen as one of the most important steps planned for the successful transformation from the planned economy to a market economy in the telecommunications sector, which is now witnessing rapid growth.

Zhou Qiren, a senior expert with the China Center for Economic Research under Peking University, said China needs to add several comprehensive common carriers plus hundreds and thousands of resellers, competitive access providers, competitive local exchange carriers and other specialized service providers in a move to build a more competitive system to replace the current framework which features only one comprehensive common carrier -- China Unicom -- following the breakup of the China Telecom conglomerate.

The country has already moved towards breaking the state monopoly in telecommunications sector by kicking off several new service providers, such as China Unicom, Jitong and the Railway Telecom, and the splitting of China Telecom in 1998.

Speaking at the China Economy Forum under the new 10th Five-Year Plan (2001-05), Zhou said a more efficient competitive system in the telecommunications sector should be based on three to four comprehensive common carriers and the development of new technologies.

He suggests that more favourable policies should be offered in a move to stimulate growth of the sector, including allowing telecommunication companies to issue IPOs on both A-share and overseas stock markets.

He also unveiled that China Telecom, the current fixed-line operator, is applying for a licence from the Ministry of Information Industry (MII) for mobile services, but that the deal has not been finalized.

Zhou also calls for an integration of the completely fragmented cable TV market and the opening of the cable TV market to both domestic and foreign investors.

"China has already promised to open its domestic market to foreign investors after its WTO entry, so it is natural that the market should be open to domestic investors,'' said Zhou, adding that the government should make efforts to break down the separation between telecom and cable TV companies to enable them to have access to each other.

Currently, China's telecommunications sector and the cable TV sector are still barred from entering into each other's business.

Zhou also suggests that MII give more licence to other smaller companies, such as China Netcom -- a newly licensed broadband telecommunications provider -- to diversify their business in a move to spur growth in the market backed by their advanced facilities and high-profile staffs.

(China Daily 03/30/2001)