What part of 'virtual' don't they get?

An unusual story crossed the wires at Sina Tech on Saturday, reporting that China's new MVNO licensees are not permitted to build network infrastructure.

The natural response might be: what part of 'virtual' don't they understand?

However, the story suggests some of China's new MVNO licensees may have harboured hopes that they might be allowed to actually own their own kit.  In much of China’s indifferently regulated business environment, that’s a fair assumption.

Without naming any companies, it says “some internet firms [had] hoped to have their own network infrastructure.”  The first batch of MVNO licensees, announced in December, included subsidiaries of internet giant Alibaba and online mall JD.com.

These are politically savvy companies. Did someone in the MIIT really suggest that they might be able to own pieces of the network? A common-sense respone would be that with just three telcos and a clutch of provincial cable guys providing infrastructure for a bandwidth-hungry fifth of humanity, private network investment would be a no-brainer.

This being China, it’s forbidden. Yet talk of economic reform is in the air. So, while most likely this is merely a story confirming what was expected, just maybe it suggests there are thoughts of allowing private players to build and operate small parts of the network.

Still on MVNOs, the MIIT has handed out another eight MVNO licences, this time including heavyweight electronics retailers Suning and Gome (in English here).