China's supervisor of state-owned assets has planned to launch restructuring of the telecommunications sector in the fourth quarter of this year and finish the reform in March 2008, the latest issue of Caijing Magazine reported.
Caijing, one of China's most influential financial publications, said the State-owned Assets Supervision and Administration Commission (SASAC), which has been mulling over the reform since 2004, has formulated a restructuring plan, but it is not finalized yet and needs approval from higher levels.
Currently China has four major players in the telecommunications sector, namely China Mobile, China Unicom, China Telecommunications and China Netcom. The sharp differences among their operational results have fused the restructuring.
According to their half-year reports, China Mobile recorded a net profit of 37.9 billion yuan (US$4.99 billion); while that of China Unicom, 5.65 billion yuan; China Telecommunications,13.48 billion yuan; and China Netcom, 6.713 billion yuan.
A telecommunications expert said that the SASAC has hoped that the major operators can solve the restructuring problems through talks among themselves, but it did not go very well.
"Directed by the government while handling in line with market rules will be the main pattern of the restructuring," he said.
Chen Jinqiao, deputy chief engineer of the Telecommunications Research Institute under the Ministry of Information Industry, said the major target of the upcoming restructuring is to "realize a harmonized development of the telecommunications market," after which the competitors will narrow their differences in asset scales.
Whichever way the restructuring goes, the report says, the key influence on the development of the industry is still monopolizing the position of State-owned capital, for private and foreign capital, entering China's domestic telecommunications operational market is still "a mission impossible".
(Xinhua News Agency September 4, 2007)