China’s government is proposing to allow private companies, on a trial basis, to compete with existing operators by buying capacity on their networks — a move towards introducing competition in the country’s tightly-controlled mobile market.
The country’s Ministry of Industry and Information Technology (MIIT) said in a widely-reported statement that it will listen to feedback on its proposal for a two-year MVNO trial until 6 February.
However the ministry also said that foreign-owned companies would not be allowed to participate in the trial, meaning only local firms could compete with the three incumbents.
The country currently has three mobile operators: China Mobile, China Unicom and China Telecom.
Those companies permitted to participate in any trial would buy capacity and then offer their own branded services to customers.
The proposed liberalisation is an opportunity for the likes of Tencent and other media groups to enter the mobile market, suggested the Shanghai Daily.
The government’s proposal stipulates that any participant in the trial, in addition to being Chinese, must have some experience of the telecoms market.
In return, the country’s existing mobile networks must offer access at “fair or favourable prices”.
China’s State Council agreed in 2010 to encourage private investment in the telecom industry and promote private investment.
Foreign companies which do want to participate in the country’s mobile market are restricted to holding minority stakes in its existing operators.
The country said it would gradually open its telecoms market to foreign investors after it joined the World Trade Organisation in 2001, although so far entry has been restricted to the equipment side, and not the operating market.