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Telecom Industry to Set up Competitive System
A senior official with the Ministry of Information Industry said recently that the central government would continue its practice of supporting China Unicom so as to make it a rival able to compete with several other telecom operators.
Zhang Chunjiang, vice-minister of Information Industry, told the journalists during an interview that China Unicom is a newborn telecom company, to which the government has provided come preferential policies because in the initial stage of opening the telecom market, it is extremely hard for inferior companies to grow up without government support.
Currently, the charges on China's telecom market is still set by the government. However, according to regulations, the charges on the telecom services provided by the Unicom are 10 -20 percent lower than those of China Telecom and China Mobile. In addition, China Unicom does not undertake common service obligations for the time being.
"In the future, the government will continue to support China Unicom, moreover, the preferential policies will cover a wider range", said Zhang.
However, the official also pointed out that when an effective competitive phase of the market really takes shape, for example, when the market occupancy rates of China Unicom and China Mobile are close to each other's, these preferential policies will be gradually cancelled.
In China's present mobile telecommunication market, China Mobile occupies a 90 percent share.
Zhang Chunjiang said that the State Council has decided to let China Unicom undertake the construction and operation of CDMA, this represents the strongest government support for China Unicom to enhance its strength." China has a population of 1.25 billion. The mobile telephone has a great potential market. To give the CDMA operational right to China Unicom is a very good news.
Related experts think that judged from the current technological development trend, the third generation of mobile telecommunication has two directions for development: from the GSM of the second generation to the WCDMA, or from CDMA to CDMA2000.
With the progressive opening of China's telecommunication market and the introduction of the competition mechanism, a phase of competition among several telecom companies has emerged. However, only China Unicom is permitted to run the comprehensive business including fixed telephone, mobile telephone, data, internet and paging. At present, China Telecom is mainly engaged in fixed telephone services, while China Mobile mostly in mobile telecommunication business.
In regard to the recent widely spread rumor that China would issue the third mobile telecom business license, Zhang explained that the direction of the reform of China's telecommunication industry is fixed and the opening degree will become greater. "We will not promise that we only maintain two licenses for China's mobile telecom. Anyhow, for the moment, I seriously declare that China has not issued the third license."
The official added that China has started to be concerned about the research and development of the third generation mobile telephone and established a special working group to study matters related to the issuance of licenses of the third-generation mobile telephones and the usage of frequency. The conditions of operating the third-generation mobile telephones will be listed and published for experts' evaluation this year.
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