Government set to open up Chinese mobile market?

10 January 2013 | Kavit Majithia


The Chinese national mobile telecoms market could be opened up to competition after the sector began talks on whether state-owned carriers should be allowed to sell spectrum to private companies.

It has been reported that the Chinese Ministry of Industry and Information Technology is assessing proposals from China Telecom, China Unicom and China Mobile to begin reselling spectrum to promote rival services in the sector and promote competition.

China is the world’s biggest market by subscriber base, but is dominated by the three state-owned companies. China Telecom and China Unicom also offer fixed-line services.

In an unprecedented development, the ministry said the state council has a desire to “encourage and guide the healthy development of private investment”, and the move, if successful, could be an initial step towards liberalisation.

Discussions will be ongoing until February 6 2013 when a decision is likely to be made.

The trial would further mean that private companies will be allowed to buy spectrum and offer services across their own brands.

Consumers continue to use allocated 2G spectrum for voice, but the data evolution in China is a long way off the US and European markets, with 4G broadband licences yet to be awarded.

If the trial was to go ahead, the private companies may still have to make substantial investment in infrastructure to carry services. This, however, could depend on whether infrastructure of the larger carriers would be opened up to third party use.

Despite a perceived opening of the market, regulations will not be relaxed for foreign ownership, with rules at present restricting ownership from abroad to a minority. Telefónica, for example, only owns a 5% stake in China Unicom.