China To Liberalize Telecom Tariffs Oct 1 - Xinhua
BEIJING -(Dow Jones)- China will allow telecommunications companies to set their own tariff structure starting October, the official Xinhua News Agency reported Friday.
China wants to liberalize the tariff structure to boost competition among the nation's carriers.
The report cited a joint decision by the Ministry of Information Industry, the telecom industry regulator, and the National Development and Reform Commission, China's top economic planning agency and a price regulator.
The new regulation will take effect October 1.
The only restriction will be a maximum fee per minute, which will be set by the relative government agencies, the report said.
China has four main telecom companies: China Telecom Corp. (CHA), China Mobile (Hong Kong) (CHL), China Unicom Ltd. (CHU) and China Netcom (Hong Kong) (CN).
But the market is expecting a telecom restructuring in China some time this year.
A possible scenario is the two big fixed-line operators, China Telecom and China Netcom Group, each absorbing one of China Unicom's two cellular networks.
The new policy on telecom rates won't have a major impact on the industry, since the sector is becoming increasingly mature in China, analysts said.
Fierce competition in the sector means telecom rates are already trending downward, said Ni Yong, analyst from Everbright Securities Co.
"The current rates have existed in name only for a long time," Ni said.
The mainland's two major mobile phone operators are China Mobile and China Unicom.
Fixed-line service is dominated by China Telecom in the country's south and China Netcom in the north.
"Competition among mobile operators is more serious (than among fixed-line operators)," Ni said.
Various price packages offered by the mobile operators have broken down the current rate structure set by the government, Ni said.
-Aiping Cui contributed to this story; Dow Jones Newswires; 8610 6588-5848; aiping.cui@dowjones.com
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Posted to the site on 2nd September 2005