MORE JITONG!!!!
With last weeks article about "Jitong's partner" seeking back door US listing, ET will not go unnoticed for long.
Chris
China Telecom may split, merge with Netcom, Jitong
(12 October 2001) The Chinese government is trying to figure out what to do with China Telecommunications Corp., the nations’ monopoly fixed-line phone provider.
Top officials have been debating for years how to increase competition in the sector without destroying one of the country’s few profit-making state firms. Now it looks like they may be close to a decision.
According to the Oct. 7, Yeu Gang Xinxi Ribao (Guangdong-Hong Kong Information Daily), the government is expected to make an announcement on China Telecom’s fate by the end of the year. Sources say the telecom is going to be split up into two units.
One unit will be in the northern part of the country and will merge with China Netcom Corp. The other will be in southern China and will merge with Jitong Network Communications Co.
Yeu Gang Xinxi Ribao reports that the State Development Planning Commission (SDPC) has led much of the discussion on China Telecom’s future. Originally, two schemes were proposed: splitting the company vertically and horizontally.
The vertical split entailed breaking the telecom into non-competing long distance, local and data transmission units. The horizontal split would simply break China Telecom into northern and southern units.
The horizontal scheme later evolved into several different versions. One version envisioned the telecom merging with China Netcom in the north, while the southern unit would remain China Telecom. Both north and south units would be given licenses to provide mobile phone services.
Later, it was decided to merge the southern unit with Jitong Communications.
Recently, the Hong Kong press has reported that the State Council is considering a plan to consolidate the telecom sector to reduce the number of providers to three or four. The above-mentioned division and mergers of China Telecom would be part of this plan.
New telecom providers popping up
In related news, the over 1,000 specialized telecom networks across the country are separating from their original owners to become stand-alone telecom providers.
Among them, China Railway Communications Corp., whose telecom network belonged to the railway service before it became a telecom, has obtained a license to provide basic telecom services.
Power Telecom, whose network belonged to the State Power Corp., is also said to have obtained a telecom license as well.
Other telecom networks affiliated with the crude oil sector and the water resources sector are also in the process of separating from their original owners.
