China green-lights MVNO plan: foreigners need not apply

In a move more symbolic than substantive, China is to go ahead with an MVNO service pilot, allowing private players to enter its telecom market for the first time.

Participants must be at least 50% privately-owned and have no more than 10% foreign ownership, the MIIT stipulated in regulations posted to its website (here via C114.net) on Friday.

The three state-owned network operators – China Mobile, China Telecom and China Unicom – are barred from forging exclusive partnerships. They must sign up at least two MVNOs within four months of receiving the first application.

The long-awaited issue of regulations follows an unprecedented one-month industry consultation early this year. However, little if anything seems to have changed from the guidelines published in January.

The single biggest factor issue – the operators’ wholesale price – is still where it was: no lower than the operators’ lowest retail price.

This being China, MVNOs must also establish a network "security management system," even though they are barred from owning or operating a network. They are obliged to build billing and customer care systems and “appropriate” sales outlets and operational locations.

Industry websites have speculated that the first MVNOs could start as early as July, but given the preparation required, the first service is more likely to be at the end of the four-month window.

Although these are officially dubbed pilot services, it is very rare in Chinese telecoms for a large-scale trial not to be upgraded to full commercial level.

Dozens of firms are said to be interested in becoming MVNOs. However, the most likely new entrants are electronics retailers such as Suning, D.Phone and Gome, with established brands and handset distribution channels.