January 24, 2018 / 11:07 AM / 7 months ago

China to grant licenses to virtual telecom operators

HONG KONG, Jan 24 (Reuters) - China will give licenses to virtual telecom operators, including foreign-invested ones, in a move aimed at opening up its telecom market that is dominated by state-owned China Mobile, China Unicom and China Telecom.

Virtual network operators do not own the networks they use to provide communications services but instead lease capacity from conventional operators, usually paying them a percentage of their revenue as well as fees.

China’s Ministry of Industry and Information Technology on Wednesday put out a draft notice regarding the approval of mobile telecommunication reselling services, after first introducing pilot schemes in May 2013.

Foreign-invested firms as well as private and state-owned enterprises will be eligible to apply for the license, according to the government’s proposal, which will become effective pending a month-long public consultation.

There will be no limit on the number of licenses to be handed out, state-run Xinhua quoted an official from the ministry, Chen Jiachun, as saying.

As of the end-2017, pilot schemes had attracted 3.2 billion yuan ($502.04 million) of investment from 42 private firms. User numbers totalled 60 million, or 4 percent of China’s mobile user population, according to Xinhua.

China has been slowly opening up its telecom market.

Last year, it introduced a $12 billion ownership reform for China Unicom, which on Tuesday proposed to name representatives from China’s tech companies - Tencent Holdings, Alibaba Group, Baidu Inc and JD.com - as members on its enlarged board following their investment.

$1 = 6.3740 Chinese yuan renminbi Reporting by Sijia Jiang; Editing by Himani Sarkar

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