Focusing on value-added telecom services
By Wang Guoping (China Daily)Updated: 2006-12-04 09:32
December 11 marks the fifth anniversary of China's accession into the World
Trade Organization (WTO) and in these five years, China's telecom industry has
accelerated its pace of opening-up through overseas public offerings and joint
ventures.
Foreign investors are penetrating the Chinese market and
increasing their involvement gradually and it is expected their participation in
the world's largest telecom market in terms of subscribers will be higher and
higher. In all telecom service categories, value-added service is a priority.
In 2002, the State Council released a regulation on foreign investment
into telecom enterprises in China to provide good and clear policy guidance to
foreign investment and honour its commitment to WTO members.
The coming
Telecommunications Law is expected to provide a better environment for fair
competition and a regulatory guaranty to foreign investment and operations.
Gradual opening
The Annex 1B of the Final Act of the WTO
stipulating the principles on general agreement on trade service, the Agreement
on Basic Telecommunication Services and China's commitment on telecom service
are the three main legal documents set to facilitate opening up of the
sector.
According to the regulation of the State Council in 2003, foreign
investors can establish foreign-invested telecom service entities, for both
basic and value-added services, with approval from the Ministry of Information
Industry and the Ministry of Commerce.
China's commitment stipulates the
ceilings of stakes foreign investors can hold in a period of time and the
process of opening region by region. It also says foreign investors should be
treated equally as domestic companies, when providing services to
consumers.
This July, the Ministry of Information issued a circular,
reiterating China's commitment to the WTO on telecom services: foreign investors
can not establish solely owned enterprises and must work in the form of a
Sino-foreign joint venture. One main reason was that some foreign investors had
been circumventing the rules in co-operation with local firms to carry out
value-added services.
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