Virtual telecom operators business nears reality

Updated: 2013-11-05 17:07


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Sixteen companies are expected to get licenses for virtual telecom operators- business of resale mobile communication services- by the end of the year and open for business in 2014, Economic Information Daily reported.

Virtual operators business is reselling mobile communications services to introduce its own brand of telecommunication services through leased telecommunication operator's network and facilities or other forms of cooperation.

The three major telecom operators in China have completed the accreditation work on the companies applying to be virtual operators. The Ministry of Industry and Information Technology of China (MIIT) will further review the shortlisted companies and award business licenses to the qualified ones.

“China Telecom and China Unicom have both reached a preliminary cooperation deal with some companies and are now signing agreements; China Mobile is ratcheting up the final negotiations and is expected to complete the agreement soon,” deputy director of development department of MIIT said on Oct 24.

There are 70 companies applying to be virtual operators, and three kinds of companies are finally chosen as future partners: channels such as Suning, Gome and Dixon, Internet companies and those who already have the industrial resources such as Kingdee and UF. So far, 16 companies have signed agreements with the operators.

Both internal and external reasons have led to the promotion of virtual operators, said Zhao Xiaojie, Central London business manager of British Telecom O2. The growing demand for breaking the monopoly of the telecom industry, enormous pressure from the transformation of the State’s economic development and the rapid development of mobile Internet have forced traditional operators to find a new impetus, Zhao added.

“For example, after cooperating with Virgin, a company that is very popular among young people, market share of European operator T-Mobile jumped from fifth to second,” Zhao said.

“If there are 16 or more companies getting the license for virtual operators, the telecom market that has long been criticized will undergo a significant change. The degree of the market development will increase, and the process of openness will accelerate,” said an official from one of the shortlisted companies.