Focusing on value-added telecom services
By Wang Guoping (China Daily)Updated: 2006-12-04 09:32
Basic telecom service
In the basic telecom service, foreign telecom
operators already participated in the basic telecom service market, before
China's WTO accession in 2001 and its model was to enter as a strategic
investor.
In terms of operation, investing in basic telecom services
involves a huge amount of capital and with a clear industry scenario with six
main players, foreign investors won't enter blindly.
At present, the top
four operators China Mobile, China Unicom, China Telecom, and China Netcom all
made overseas IPOs and most of them have foreign strategic investors like
Vodafone in China Mobile. This is the best example of foreign involvement in
China's basic telecom service market.
Besides, while the opportunity for
direct investment into basic service is not mature, some foreign telecom
operators chose an indirect way, such as developing large accounts, training,
technology testing together with Chinese counterparts. A typical example is the
strategic partnership between British Telecom and China Netcom and a joint
research centre between France Telecom and China Telecom.
Within the
coming years, we can expect to see more heavyweight foreign telecom operators
entering the Chinese market and promoting the prosperity of the
industry.
Telecom equipment industry
When China joined the WTO, it
was also committed to endorsing the Information Technology Agreement, which
requires all members to elevate tariffs on information technology products.
China has fully complied with that agreement.
Besides, China also lifted
requirements on foreign currency exchange, trade balance, local content, and
export performance.
Thus in the telecom equipment market, the domestic
market is already integrated with the global market, so there is no fundamental
difference in operating in this market between domestic and foreign
companies.
A landmark event in the opening of this area is the
establishment of Shanghai Bell Alcatel, the first foreign-invested telecom
equipment company in China and the first one that foreign investors had an
absolute majority.
The author is an analyst with the research centre of
China Galaxy Securities Co Ltd
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