A proposed regulation in China is planning to bring in more competition to the state-controlled telecom sector in the country, by starting up trials for Chinese firms to become mobile virtual network operators (MVNO), which allows the private companies to qualify themselves to resell wireless services.
China’s three state-controlled telecom operators are currently providing wireless services, with around 700 million customers. But with the trials, qualifying Chinese private firms could buy and resell the wireless services under their own brand names. The ministry is currently seeking public input on the proposal over a 30-day period. If the response is found to be good, then the trials would last for two years.
The main goal of the trials were proposed by China’s Ministry of Industry and Information Technology is to bring more private capital to the telecommunication industry, foster innovation, and explore how MVNOs can partner and compete with China’s established mobile carriers.
In the China’s massive market, there are around 1billion mobile subscribers, which also encourage in the development of MNVO’s on the same lines of the country’s state-controlled mobile operators, according to Nicole McCormick, analysts of a research firm Ovum.
The details in the draft regulations are limited, and it is not clear whether the MVNOs will face any restrictions in the services they can offer. Forecast says that initially, the trials will bring in more competition in China’s mobile telecom sector mainly due to interest shown by the internet companies to join the trials, according to Vincent Fu, an analyst of research firm Gartner. He said that, at present the mobile carriers are not been able to meet the expectation of better services that are needed by different market segments, such as high-end enterprise users. He also added that, in China there is a scope for companies to compete in, since the country doesn’t have as much competition.
Chinese telecommunication equipment supplier Huawei, a handsets manufacturer company and provider of enterprise communication products, Chinese Internet firms such as online messaging and gaming provider Tencent, and e-commerce giant Alibaba Group are the major players interested in the trials who are increasingly devoting resources to mobile apps and services.