What does re-structuring of China Telecom mean to purported agreements w.GTCI?
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Posted: 9:55am Monday, February 8, 1999
cw.com.hk
MII confirms China Telecom restructuring
By Sumner Lemon
Ministry of Information Industry (MII) officials last week announced details of a proposed plan for the restructuring of China Telecom. Officials also announced moves to lower telecoms service charges and tighten control over Internet-based phone services.
While the MII announcements may help clarify speculation on the future shape of China Telecom, high-level discussions regarding the plan's proposals appear to be ongoing.
“The restructuring plan is under discussion and awaiting State Council approval,” said Minister of Information Industry Wu Jichuan.
Officials have reportedly proposed that China Telecom be broken up into three companies offering fixed-line telephone services, mobile communications, and paging services, respectively. A report in China Daily, the country's official English-language newspaper, indicated that, according to the MII plan, satellite communications services would be overseen by the company responsible for fixed-line services.
Prior to the official announcement, rumors had been circulating that MII was planning to split China Telecom into four companies, with a fourth company assuming responsibility for satellite communications.
Better service
Overall, the China Telecom shake-up appears aimed at improving the quality of Mainland telecoms services.
Mainland press reports have recently voiced criticism of the high costs and poor services offered by China Telecom. Reports have pointed to the lack of competition stemming from the company's position as the country's monopoly telecoms service provider as the main reason for the high costs and poor service.
In addition to outlining the proposed restructuring of China Telecom, Wu outlined MII objectives for the coming year.
“The MII's main efforts this year will focus on formulating long-term development plans, establishing regulations, cultivating a fair market climate and protecting consumers' interests,” said Wu.
As part of these initiatives, prices for international telephone calls, Internet access and data communications would be cut dramatically during the coming year, said Wu. [a good thing]
“It's necessary to slash the telecom service charges because consumers can benefit from the application of advanced technologies and products,” said Wu.
However, while some Internet users in Beijing appeared unaware of the government plan to reduce the cost of Internet access, they welcomed the move.
“This seems like very good news,” said one Beijing-based systems administrator.
At least one analyst agreed.
“One of the inhibitors of growth of Internet usage has been the cost of getting online,” said Pete Hitchen, senior Internet analyst at market research firm International Data Corp. (IDC) Asia-Pacific. “This is great news for the ISPs because that increases their competitiveness…and more non-business users will be tempted online,” he said.
No deregulation yet
While prices are coming down, MII officials moved to reassert their control over IP telephony service providers following the high-profile dismissal of a case against two Fujian province entrepreneurs charged with running an illegal Internet-based telephone service.
In that case, the Fuzhou Intermediate People's Court ruled that Internet-based telephone services are considered a “computer information service” and therefore, based on regulations promulgated by the State Council in 1993, not considered a monopoly business.
Despite that ruling, the two brothers remained in custody last week awaiting another trial, according to a report released by Xinhua, China's official news organ.
While some local industry observers had said that the Fujian court ruling presaged accelerated deregulation of China's telecoms market, those hopes appear to have been dashed.
Last week, MII officials took steps to reassert their control over Internet-based voice services, categorizing IP telephony as a business for China's telecoms operators.
MII has already licensed several telecoms companies to offer IP telephony services on a trial basis and plans to issue formal licenses later this year, said Zhang Chunjiang, director of the Telecommunications Administrative Bureau of MII.
“China is not going to push for deregulation for the next couple of years,” said Amala Menon, regional analyst for telecommunications at IDC Asia-Pacific.
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With deregulation and lower prices what does this
do to "exclusive" agreements and what does this do
the prospective earnings of companies counting
on exclusivity?
With lower prices and more competition amongst the
previously noted and reported almost 14,000 current ISP's what does this do to revenues and earnings after all marketing and
operating costs are factored in?
Anyone see a balance sheet for GTCI ?
Can anyone justify earning projections as promulgated
through GTCI's paid PR WSRG?
Do GTCI "investors" want to pay even more
for my Ocean Front property in North Dakota?
Remember all the Paulownia trees?
Sincerely,
ztect
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