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January 31, 2019

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British telco granted access to nationwide market

GRANTING British telecommunications giant BT Group nationwide operating licenses shows the world China is serious about opening up its telecoms sector, the government has said.

The nationwide permits, issued by the Ministry of Industry and Information Technology, are the first of their kind granted to an international telecoms firm.

They will allow its China joint venture BT China Communications Limited to contract directly with customers and bill them in local currency, the company announced on its website.

BT, formerly known as British Telecommunications, obtained a nationwide domestic IP-VPN license and an Internet Service Provider license, which represents a “major step” for the company in China, it said.

“Being able to service and bill locally significantly simplifies the process of delivering connectivity and other communication services,” said Bas Burger, CEO of BT Global Services.

Li Zhen, an analyst with CCID Consulting, said: “A lot of foreign companies have obtained IP-VPN permit in China via joint ventures with Chinese firms, like BT, but getting the ISP license is somewhat more difficult.”

Telecommunications is one of the key sectors that China has vowed to open up further, with foreign investors gaining an increasing share in many value-added services.

According to a report by the China Academy of Information and Communications Technology, the number of foreign-invested telecom firms with operation permits was 121 by the end of 2018, up 39 percent year on year.

Li said Chinese authorities have been encouraging faster and cheaper Internet connections, with growing competition among the country’s major telecom firms including China Mobile and China Unicom. This means that foreign carriers might not yet have a competitive edge in terms of rates.

Still, getting access to the world’s most populous country with increasing mobile penetration means opportunities.

Miao Wei, minister of industry and information technology, said that last year, the country expanded policies experimented with in the Shanghai free trade zone on opening value-added telecoms services to all other pilot FTZs.

Building on these efforts, the country will implement previously promised opening-up policies in fields including telecoms and automobiles, Miao said.


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