BEIJING, Dec 26 — China took a step toward opening the world’s largest wireless market by awarding licenses to operate to 11 companies, including a unit of Alibaba Group, the industry regulator said.
China will allow the companies to lease wireless capacity from the nation’s three existing carriers in a trial program intended to boost competition in the US$213 billion market, according to a statement on the website of the Ministry of Industry and Information Technology today. The country’s carriers now, China Mobile Ltd., China Unicom (Hong Kong) Ltd. and China Telecom Corp., are all state-run.
Opening the market to new operators, which also include Telling Telecommunication Holding Co., Beijing Bewinner Communications Co. and Lianlian.com, is aimed at helping to cut prices, bring more choices and improve customer service to the nation’s 1.2 billion wireless users. The new licenses have been granted as part of a two-year trial to try to bring more competition into the market.
“Most of the new operators will look for a niche segment to differentiate their offerings from the major carriers,” Sandy Shen, a Gartner Inc. analyst in Shanghai, said in an e- mail before the announcement. The new operators may offer specific products and services at cheaper prices, she said.
Carriers are being pushed to improve customer service to encourage users to switch to service plans on faster networks in a nation where two-thirds of the subscribers have yet to upgrade to third-generation networks. China’s regulators this month issued licenses for the start of commercial service on fourth- generation networks.
The new private companies entering China’s telecom market will capture about 10 per cent of the nation’s mobile-phone connections by 2018, according to estimates from Nicole McCormick, an analyst at researcher Ovum. — Bloomberg
