China allows private capital in telecom

BEIJING -- China's Industry and Information Technology Ministry (MIIT) on Friday granted licenses to 11 private enterprises to pilot resale of certain mobile services.

The move will enable the firms, including e-commerce giant Jingdong Mall, to partner and compete with the backbone operators through the resale of mobile services, marking a breakthrough for China to further open the largely monopolized sector.

In a statement on its website, the ministry described the move as an important part of restructuring and reform in the telecom industry.

"This will help competition and innovation while offering more choices and better services to consumers," the post read.

To gain the licenses, private firms must sign a cooperation agreement with one of the three backbone operators -- China Mobile, China Unicom and China Telecom, before filing an application with the MIIT.

As the pilot scheme moves on, the ministry will grant more licenses to qualified private businesses.

The latest development comes after an MIIT guideline last June unlocked the gate to the telecom sector for private capital, offering  participation in eight major areas, including the resale of mobile communication businesses.