The communist government in China has decided a bit of competition is a good thing and will private companies to piggy back on the country’s three dominant telecommunications providers. This will mean that new companies can offer own-brand mobile services, opening the world’s largest mobile phone market to increased competition.
Eleven private “virtual carriers” have been named to resell mobile telecommunications services, the Ministry of Industry and Information Technology (MIIT) said in a statement. The pilot opens up the market for privately run companies to offer discounts or more attractive deals, raising competition in a market dominated by state-owned enterprises China Mobile, China Telecom Corp and China Unicom Hong Kong.
“It’s a milestone. It will draw private investment, and stimulate competition and innovation in the telecoms sector… giving a wide range of consumers greater choice and better service,” the ministry said in the statement.
The private companies can buy mobile communication services in bulk from providers which have their own mobile networks, repackage them and sell them to end users, the official Xinhua news agency said. The 11 companies include Net.cn, a subsidiary of online retail giant Alibaba, rival e-commerce firm Jingdong and major Chinese mobile phone retailer D.Phone, Telling Telecommunication Holding and Beijing Bewinner Communications.