China may consider private telecom investment

By Telecom Lead Team: China, the leading telecom services
market in the world, may consider investment from private sector. This will be
a big boost for Indian telecom operators such as Bharti Airtel, Vodafone,
Reliance Communications, Tata Teleservices and others.

The Chinese government has made it clear that the
implementation rules for private investment must be drawn up in the first half
of 2012.

The Ministry of Industry and Information Technology is
formulating detailed rules and regulations and timetable concerning the access
of private investment to China’s basic telecommunication service and military
defense technology industry, said Li Yizhong, former head of the Ministry of
Industry and Information Technology, who is member of the Chinese People’s Political
Consultative Conference (CPPCC) National Committee, told Xinhua on the
sidelines of the Fifth Session of the 11th CPPCC National Committee, in

Though foreign investment is forbidden to enter China’s
basic telecommunication service sector, private and overseas investment has
already gotten involved as China’s three giant telecommunication operators have
all been public companies. However, it needs further guidance and regulations
for additional access to private capital in this area, noted Li.

Private investment will boost Capex in telecom sector.

Chinese telecom operator Capex increases 16 percent to $46
billion in 2011

The telecom capital expenditure of Chinese service providers
has gone up to $45.71 billion in 2011 from $39.397 billion in 2010, clocking 16
percent growth. However, telecom Capex in 2011 is lower than their capital
expenditure in 2009. In 2009, telecom operators spent $47.39 billion for adding
wireline and wireless infrastructure.

According to a new report from Wireless
Intelligence, China is approaching the 1 billion mark for mobile
connections, mostly due to the popularity of 3G, which accounts for nearly 25
percent of subscribers. China’s mobile connections grew almost 17 percent from
2010 to 2011.

India and China telecom markets account for 35 percent of 180
million net mobile additions in Q4 2011

India and China account for approximately 35 percent of the
estimated 180 million net mobile additions in Q4 2011, according to Ericsson
report. For India, this figure continues to be lower than Q1 and Q2 due to
operators’ increasing focus on active subscribers. Brazil, Indonesia and
Bangladesh follow in terms of net additions.

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