After China’s recent reshuffle of its telecoms companies, China Mobile has emerged as the 300 kilo gorilla in mobile communications and its rivals, China Telecom and China Netcom, are leaning on supervisory departments to erect stricter limits over the beast to curb its rapid expansion.
China Telecom, jointly with China Netcom, has submitted an application to supervisory departments requiring “asymmetric regulations” over China Mobile.
Chang Xiaobing, chairman and CEO of China Unicom revealed last week that the government had already been formulating operable proposals for the issue, and telecoms operators had participated and raised their own opinions. He said the proposals related to price and market share. China Unicom is the first to confirm the formulation of asymmetric regulations after regulators announced they would be implemented in future.
China Mobile, which before the reshuffle was part of China Telecom, has greatly benefited from the telecoms reorganization, while China Telecom has lost its long No. 1 status in the industry.
China Mobile has responded to the regulatory threats quickly. Its president, Wang Jianzhou, claimed that as the company had taken on many responsibilities such as investing large money in the trial and operation of the TD-SCDMA network, China’s own 3G network, had taken over China Tietong’s 40 billion yuan debt, 8 billion yuan of which will come due this year, after the merger of the two companies, and had invested 18.3 billion yuan in China’ rural area telecoms construction, so it was already under de facto asymmetric regulations.
But China Mobile’s already large market share has been boosted through the reshuffling. Industry insiders estimate that, after the 3G launch, China Telecom will see profits from it in three years, and in the following 2 to 3 years, its CDMA users will reach 100 million, with market share around 15%. The New China Unicom plans to occupy at least 1/3 of the 3G market. If this turns out to be correct, China Mobile may take a 50+% share of the future 3G market with its “comparatively immature” TD-SCDMA network.
As this prospect is unacceptable for China Telecom and China Unicom, they are constantly working to get stricter limitations placed upon China Mobile’s business. The release of details of the asymmetric regulations will reveal how successful they have been.
Source:chinastakes