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Mark O'Neill

Sichuan firm China C Net has won a telecommunications licence from the Ministry of Information Industry (MII), becoming the country's eighth telecom provider and the first from the private sector.

The Orient Group, a private company based in Harbin that is listed on the stock exchange, has an equity stake in Jitong Communications, one of the seven other telecom providers, but is a passive investor.

The Workers Daily  reported on Sunday that C Net would not compete in basic telecom, such as fixed line or mobile, but would provide Internet protocol (IP) telephony, broadband Internet access, Internet service provider access, computer information network services and value-added telecom services to multi-media firms.

Its business licence, issued by MII early this month, allows it to provide international computer information network services in key cities such as Beijing, Shanghai, Tianjin, Chongqing, Shenyang, Nanjing, Wuhan, Guangzhou, Chengdu and Xian.

The company started preparing for the licence last August by adding 30 million shares to its original 15.19 million.

At the start of this year, with the support of the Sichuan provincial government, it held a meeting of 57 venture-capital and listed companies and received a private placement of HK$100 million.

It moved its headquarters from Sichuan to Beijing this year.

The spokesman said that, after next month, it would start to build up its broadband network, not by investing heavily in a new system but by leasing, like Jitong.

'China Telecom, [China] Unicom, [China] Netcom, [China] Railcom and the Bureau of Radio and Television are spending heavily on backbone systems.

'There will be great over-capacity one day. We do not want to duplicate what others are doing.

'Our main system will be IP city services, which offer the highest profit margins,' he said.

A spokesman for Beijing Ya Xun Zhong Cheng, a Beijing subsidiary of C Net, said C Net would use technology based on its Ipv6 technology and aimed for a 20 per cent share of the market share in broadband networks.

Chairman Xia Zhuanyou said: 'C Net is the Chinese urban Internet but is unlike other Internet systems.

'We set up this company with the security of the national network in mind.

'Internet is very fast and carries a great deal of information, but if you entrust it to the system of another country, it is very bad for the security of a country's information.

'Microsoft's Windows 98 operating system and Intel's Pentium Three chips both have back-door procedures through which the materials of the users can be stolen.

'This shows that Chinese must have their own network,' he said.



Private mainland firm first to win licence