China paves the way for virtual telecom operators

China has announced plans to grant licenses to virtual telecom operators for the first time in an attempt to shake up the market.

The market is currently dominated by state-owned China Mobile, China Unicom and China Telecom. Virtual operators use the networks of established players and lease capacity from them.

Interestingly, licenses will even be granted to foreign-invested virtual telecom operators.

This will be a surprise to some given the nation’s state control of communications such as the infamous ‘Great Firewall’ which restricts internet traffic and prevents access to some foreign websites like Google in favour of Chinese alternatives like Baidu.

According to state-run Xinhua, an official from the ministry was quoted as saying there will be not limit on the number of licenses.

At the end-2017, pilot schemes had attracted 3.2 billion yuan ($502.04 million) of investment from 42 private firms. User numbers totalled 60 million which equates to four percent of China's mobile user population, according to Xinhua.

Last year, China introduced a $12 billion ownership reform for China Unicom, which on Tuesday proposed to name representatives from China's tech companies  — Tencent Holdings, Alibaba Group, Baidu Inc and JD.com  — as members on its enlarged board following their investment.

Yesterday, we reported on China Telecom teaming up with other leading firms in the region for a report on 5G network slicing.

Are you surprised to see China granting licenses to foreign virtual operators? Let us know in the comments.

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