A helping hand to dial up success

PUBLISHED : Saturday, 10 December, 2011, 12:00am
UPDATED : Saturday, 10 December, 2011, 12:00am


China's accession to the World Trade Organisation (WTO) was expected to herald phenomenal growth in its telecommunications industry, as planned-economy principles gave way to market-oriented practices.

But while the past 10 years have seen the mainland achieve that expansion, becoming the world's biggest and fastest-growing market for telecom services, it has stemmed from the support of central planning. Greater competition has been realised through a strict policy of gradual deregulation by the government.

Data from the Ministry of Industry and Information Technology show that the country's mobile phone penetration by the end of June had reached 68.8 per cent, with 920.54 million users, compared with 20.1 per cent market penetration and 84.53 million mobile subscribers in 2000.

All that was accomplished by the mainland without the implementation of a formal telecommunications ordinance, legislation that mature markets such as Hong Kong and the US have adopted to regulate their industries, according to Cheung Chi-wah, a research fellow at independent consultancy firm Ovum. 'WTO accession has helped China evolve its telecommunications industry and set the bar for its performance against other markets worldwide,' Cheung said. '

Careful restructuring of industry players by policymakers has ensured rapid telecom infrastructure development and steady deployment of services across the mainland.

Following restructuring, China Mobile remains the domestic market leader, as well as the world's largest wireless network operator, with 633.52 million mobile subscribers by the end of September.

The government has kept foreign investment limited in the form of minority shareholdings in the three state-owned telecommunications network operators, according to Sandy Shen, a research director at market research firm Gartner.

Cheung said Beijing's 12th five-year plan calls for increased competition, which could mean the emergence of a fourth fixed-wireless network operator.