China allows private capital in telecom
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 andcompete with the backbone operators through the resale of mobile services, marking abreakthrough for China to further open the largely monopolized sector.
In a statement on its website, the ministry described the move as an important part ofrestructuring and reform in the telecom industry.
"This will help competition and innovation while offering more choices and better services toconsumers," the post read.
To gain the licenses, private firms must sign a cooperation agreement with one of the threebackbone operators -- China Mobile, China Unicom and China Telecom, before filing anapplication with the MIIT.
As the pilot scheme moves on, the ministry will grant more licenses to qualified privatebusinesses.
The latest development comes after an MIIT guideline last June unlocked the gate to thetelecom sector for private capital, offering participation in eight major areas, including theresale of mobile communication businesses.