Wednesday, May 21, 2008

China's MII Spurs Industry Restructuring, 3 Majors to Compete

China's Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Finance have given the go ahead for a significant restructuring of the nation's telecom industry. Specifically, MII is encouraging China Telecom to buy China Unicom's CDMA network. China Unicom's GSM division is to merge with China Netcom. In addition, China Telecom is to acquire the basic telecom services unit of China Satcom and China Mobile Communications Corp. (CMCC) is to to acquire China Tietong Telecommunications Corp.

China Telecom, China Netcom, and China Tietong are fixed line providers, while China Satcom offers services including satellite, mobile communications and Internet services.

MII said the restructuring would create three nationwide service providers with both fixed and mobile assets. 3G licenses will be granted to each of the companies.