China may introduce "asymmetric regulations" for the telecommunications industry to protect the interests of smaller companies like China Unicom and China Telecom after the recent industry reorganization, top telecommunications executives said yesterday.

"Asymmetric regulations" like enforcing a mobile market share ceiling and asymmetric mobile number portability have been adopted by other countries to give every company a level playing field.

However, China will go slow on the asymmetric policies and is likely to introduce one regulation at a time, according to Zuo Xunsheng, China Netcom's chairman.

The company most likely to be affected by the government's "asymmetric regulations" is China Mobile, the world's largest mobile phone operator.

However, analysts say it may not lose its dominant position just yet. China Mobile has more than 400 million mobile subscribers and a 70- percent market share in the domestic wireless market.

Chang Xiaobing, China Unicom's chairman, favoured this "asymmetric regime" and said it was necessary to adopt such regulations for the telecommunications market in China to grow in a healthy way. This is the first time a mobile phone operator has commented on the issue, even though the topic was hotly debated in academic and analyst circles.

"We believe these asymmetric regulations would assist small mobile operators like China Telecom to compete better against China Mobile," said Ovum, a UK-based research firm.

Under "asymmetric regulations", a company cannot exceed its market share ceiling determined by the regulators and will face action if it does so. Other policies include single-way mobile number portability, which would allow China Mobile subscribers to port their numbers to China Telecom and China Unicom, but not the other way round.

Smaller operators may get better spectrum allocation than China Mobile. China Telecom is set to acquire an extra 800MHz spectrum from the regulator for its CDMA operations. China Mobile may be asked to share its infrastructure with its newer rival operators, China Telecom and China Unicom.

China started a telecommunications reorganization in June. China Telecom, which purchased the CDMA business from China Unicom, will start mobile services as early as October.

(Shanghai Daily August 27, 2008)