Telecoms due for a shake-up
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07/13/2001
Despite moves by telecoms firms to improve their competitive position, economists believe the environment for really sharp and fair competition hasn't developed in Shanghai.On June 28, China Unicom Shanghai Branch (CUSB) announced it would join Shanghai Post Bureau. The latter, with its citywide sales and service network, became the biggest retailer of CUSB, helping CUSB sell its fixed-line phone, IP phone and long-distance phone services. Another telecoms operator, China NetCom Shanghai Branch, announced its launch of after-paid IP phone service at the end of July in Shanghai. The IP phone, allowing people to make cheap calls through semi-fixed-line phones with no need to dial the long card numbers and passwords the IP cards usually require, is expected to attract a large number of IP phone lovers. Consumers gain All those moves have made the benefits of competition clear to consumers. Before China Unicom, currently the second largest telecoms carrier in China established in 1994, China Post and Telecom was the sole telecoms operator in the country, monopolizing the fixed-line phone, long-distance phone, paging and mobile services markets. Complaints about high phone rates have been among the most frequently voiced consumer gripes. In an effort to promote competition in this fast-growing market, the Ministry of Information in 1994 established China Unicom. After that, a series of new companies entered the sector. The field is now shared by China Jitong, China NetCom and the recently established China Railcom. They will be joined by the planned Satellite Telecom. Several restructurings took place in the China Post and Telecom Bureau Administration Bureau to separate the business of posts from telecoms services, which was later separated into fixed-line, paging, long-distance and mobile companies. These combined measures have created an optimistic picture for the market with competition and better services but low, low prices. "The picture is just taking its preliminary shape, however. It is far from being completed," said Wang Yongzhong, a manager from Accenture Consulting Co Ltd. Wang believes that the monopoly of China Telecom and its subsidiaries in regional markets will last for some time. Because China Telecom has long operated fixed-line phone services, its cable network covers a large area. In big cities like Shanghai, very little room is left for other telecoms operators to install their cables. Because of this limitation, China Unicom, the other company licensed for fixed-line phone service, almost gave up the local fixed-line phone services, according to Wang. "Historical reasons have made China Unicom very passive in the competition," he said. There is almost no competition in the local fixed-line phone service at this time, but Wang believes the central authority plans to change that. China Daily news
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