The Ministry of Information Industry (MII) gave the green light on February 6 to a joint venture between China Unicom and SK Telecom, an source close to the ministry said.

"All the examination and approval procedures have been completed," said the anonymous source.

SK Telecom signed a deal with China Unicom in March last year to provide telecom value-added service for the country's CDMA (code division multiple access) subscribers through establishing a joint venture with China Unicom, the nation's only CDMA network operator.

The joint venture will have a registered capital of US$6 million, with China Unicom taking 51 per cent of total share, and SK Telecom taking the rest.

But progress in establishing the joint venture was delayed, as it failed to obtain permission from the nation's telecom watchdog, although this had been expected at the end of last year.

"We've got the permission," said Si Honghui, an official at SK Telecom (China) without any further elaboration.

Analysts believe the watchdog's long awaited green light will give SK Telecom a more effective means of competing in China's telecommunications market.

John Liu, chief executive officer of SK Telecom (China), said last month that the Chinese telecom market would mature this year.

"We believe telecom services such as wireless data and multi-media will witness explosive growth this year," he said.

Major players in the global telecom industry, such as Vodafone, AT&T, Hong Kong's PCCW and Hutchison Whampoa are playing an ever-greater role in China's lucrative telecom market.

Minister of Information Industry Wang Xudong also pledged in January that the country will stick to its WTO commitment by drawing up more transparent policies to lure foreign investment.

Insiders believe that with the gradual lifting of restrictions on foreign involvement in the industry, foreign penetration will increase.

China's IT industry achieved great success last year thanks to the world economic recovery and strong domestic demand.

The country's IT industry fulfilled an added-value of 709 billion yuan (US$85.4 billion) last year, accounting for 6 per cent of gross domestic product.

(China Daily  February 7, 2004)