China Liberalizes Telecom Traffic Rules


Now from May 10 China is going to allow telecommunications companies to independently decide tariffs for their services, to give a greater role to market forces and promote competition.

On Friday, the Ministry of Industry and Information Technology said – China Telecom, China Mobile Ltd and China Unicom Hong Kong— along with “the market” — will determine the pricing of tariffs.
The government had previously set pricing bands.

On its website, the ministry said that ” Telecommunications companies can independently draw up specific tariff structures, standards and billing methods and all telecom service tariffs will be regulated by the market,”

Mark Natkin, managing director of Beijing-based Marbridge Consulting said that “From a competitive angle, the carriers turn into real telecoms operators and they can learn how to compete as businesses without government support.”

He added that “The growth is in rural areas. It will be easier for operators to get a higher percentage of people on board for mobile usage – one of the complaints was how high telecom fees are related to income.”

The first MVNO was launched last week. Companies such as Alibaba Group Holding, and Suning Commerce Group applied for MVNO licenses last year.China Unicom disagreed to comment on the tariff liberalization.