Information Technology Reference
In-Depth Information
Regulatory Initiatives and Market
Forces in Broadband Industry
China Unicom were licensed by the Ministry of
Information Industry (former MIIT) to supply
telecommunication and Internet service. However,
China Unicom was the only operator who was
allowed to offer a full range of telecom services
such as cellular, paging, long distance, satellite,
data and Internet services.
As the country joined the World Trade Organi-
zation, the Government made a decision on further
reforms in China's telecommunication industry.
In December 2001, the State Council approved
China Telecom's restructuring plan, under which
China Telecom was split into the north sector
and the south sector. The south sector has the 21
provincial (municipal and autonomous regional)
corporations, holding 70% of the national trunk-
line transmission network assets owned by the
former China Telecom in the south and northwest
of the country and operates under the name China
Telecom. The north sector covers former China
Telecom's operations in the 10 provinces in the
north and the northeast of the country and regroups
with the former China Netcom and Jitong Telecom
to form a new China Netcom Group. The two new
groups, China Telecom Group (China Telecom)
and China Network Communications Group,
(China Netcom) were officially established in
May 2002. They retain the existing business scope
of the former China Telecom and are allowed to
build local networks, operate in areas under each
other's regime.
In May 2008, the MIIT regrouped the telecom-
munication service providers. China Telecom
acquired China Satellite and the CDMA mobile
network of China Unicom. China Unicom retained
its GSM mobile operations and merged with China
Netcom to form China United Network Commu-
nications Corporation. China Mobile Group took
over the China Railway Communications Group.
As a result, the number of carrier is decreased from
6 in 2002 to 3 in 2009. All of these three firms
were granted 3G licenses with using different
technology and allowed to offer a full range of
telecommunication services including fixed line,
The Telecommunications sector, in particular
the public networks, had been a monopoly of the
Ministry of Post and Telecommunications (MPT)
until in the early 1990s the Chinese government
introduced competition policy to the telecommu-
nication infrastructure. In an attempt to promote
competition in China's broadband Internet access
and telecommunications market, the govern-
ment has implemented regulatory initiatives and
undertaken four rounds of industry restructure
since 1994.
In 1993, the State Council approved the setting
up of the JiTong Communications Corporation,
which was responsible for the 'Golden Bridge'
VSAT-based ISDN backbone. The Golden
Bridge network would be interconnected with
the MPT data network and private networks
and be connected to the Internet via satellite. In
1994, the state council approved the setting up
of Unicom, the second state owned player. It was
run by a consortium of rival ministries and oper-
ates all telecommunications services except the
international service. The formation of two new
enterprises outside MPT to provide advanced data
communication services and long-distance voice
service represents a milestone in the development
of China's telecommunications sector.
The State Council decided to restructure
China Telecom and Unicom in 1999. As a result,
China Telecom was split into China Mobile,
China Telecom (for fixed line services) and China
Satellite. In 2000, the China Communications
Network Corporation (CCNC) was founded by
the Chinese Academy of Science (CAS), the
Shanghai government, the Ministry of Railways,
and the State Administration of Radio, Film, and
Television (SARFT). By the end of 2000, a new
competitive structure of networks has emerged in
telecommunications infrastructure market. China
Mobile, China Telecom (for fixed line services),
China Satellite, China Netcom, China Jitong and
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