Economic Watch: China speeds up opening up of telecom sector

By granting British telecommunications giant BT Group nationwide operating licenses, China has showed the world its resolution in opening up the telecom sector.

Issued by the Ministry of Industry and Information Technology, the nationwide permits marked the first of its kind granted to an international telecom firm, and will allow its China joint venture BT China Communications Limited to contract directly with its customers and bill them in local currency, the company announced on its website last week.

BT, formerly known as British Telecommunications, obtained a nationwide domestic IP-VPN license and an Internet Service Provider (ISP) license, which represented a "major step" for the company in China, it said.

"Being able to service and bill locally significantly simplifies the process of delivering connectivity and other communication services," said Bas Burger, CEO of Global Services of BT.

"A lot of foreign companies have obtained IP-VPN permit in China via joint ventures with Chinese firms, just like BT, but getting the ISP license is somewhat more difficult," Li Zhen, an analyst with CCID Consulting, told the Economic Daily.

Telecom is one of the key sectors that China vowed to open up further, with foreign investors gaining an increasing share in many value-added telecom services.

According to a report by the China Academy of Information and Communications Technology, the total number of foreign-invested telecom firms with operation permits totaled 121 by the end of 2018, up 39 percent year on year.

Chinese authorities have been encouraging faster and cheaper Internet connections, with growing competition among the country's major telecom firms including China Mobile and China Unicom, which means that foreign carriers might not yet have a competitive edge in terms of rates, Li told the newspaper.

Still, getting access to the world's most populous country with increasing mobile penetration means opportunities.

Last year, the country expanded the policies experimented with in the Shanghai free trade zone (FTZ) on opening value-added telecom services to all other pilot FTZs, Miao Wei, minister of industry and information technology, said at a press conference Tuesday.

Building on these efforts, the country will implement previously promised opening-up policies in fields including automobiles and telecom, Miao said, adding that the ministry would also roll out policies on data management as well as safety standards in the industry.