Date
16 August 2017
General Economy Images Ahead Of Communist Party Plenum

The Big Picture: VIRTUAL CARRIER LICENSES

China has issued the first batch of virtual carrier licenses to 11 private firms, allowing them to provide mobile telecom services with infrastructure leased from state-run carriers, marking a key step in opening up the world’s biggest phone market.

The 11 companies granted licenses included Jingdong Century Trading Co., which operates one of China’s largest online shopping sites, and Net.cn, a subsidiary of Alibaba Group, according to a statement from the Ministry of Industry and Information Technology (MIIT) on Wednesday. The others on the list were DiXin Tong Inc., Bashi Zaixian Ltd., Zhejiang Lianlian Technology Co. Ltd., Telling Telecommunication Holding Co. (000829.CN), Funtalk China Holdings Ltd., Huatone (Huaxiang Telecom), Beijing Bewinner Communications Co. (002148.CN), Soshare Network Technology Co. and Telephone World Digital Group.

It marks a concrete step for private companies to access the nation’s telecom industry, which would promote competition and accelerate market reform in the sector. The move is expected to break the monopoly held by the three state-run telecom service providers — China Mobile, China Unicom and China Telecom.

With the new licenses, the 11 companies will be able to lease mobile services from state-run entities and then package the services as their own, possibly offering discounts.

MIIT’s latest move to issue more telecom service licenses can serve the purpose of intensifying competition and enhancing the efficiency among carriers while fulfilling Beijing’s core interest in protecting national security, observers say. As all the new license holders need to rent the three state-owned telecom giants’ networks, the central government can suspend the carriers’ services at any time if it feels that there are activities that could threaten national security. 

Although the three telecom giants are likely to lose market share to the new carriers, they will enjoy more network leasing revenue over the long run. Also, as the new telecom operators are willing to invest in the “last mile” networks, people living in remote or rural areas will enjoy better telecom services. Thus, it could be a win-win situation for telecom giants, smaller carriers and end-users. 

Social insurance fund income seen up 14.8%

China’s Ministry of Human Resources and Social Security said it expects the social insurance fund income from five insurance schemes to expand 14.8 percent to 3.32 trillion yuan (US$547.41 billion) this year from 2012, while expenses are likely to rise 21 percent at 2.68 trillion yuan, Xinhua news agency reported Thursday. The number of participants in the basic annuity scheme is expected to increase by 16.18 million to 320.45 million people by the end of the year, and those under the basic medical plan will grow by 31.59 million to 568 million. 

Eighty-nine trade remedy probes against China

Nineteen countries and regions launched a total of 89 trade remedy investigations (TRI) against China this year as of Dec. 24, China’s Ministry of Commerce said in a statement Thursday. Total amount involved was US$3.62 billion. Among the cases, the United States International Trade Commission (USITC) launched 17 investigations based on Section 337 of the US Tariff Act, which involves patent infringements and misappropriation of trade secrets, the report said.

–Contact HKEJ at [email protected]

JP/MY/RC

(Reposted for technical reasons; first posted: 08.23)

 

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