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Era of China Netcom expected
( 2002-07-31 10:22 ) (1 )

Beijing Telecom, China's dominant fixed-line telecoms carrier, has a new name - Beijing Communications Corp of China Netcom.

A renaming and relaunch ceremony was held on Tuesday. It symbolizes a new era for China's telecoms sector, industry experts said.

Beijing Communications was originally a local branch of China Telecom. It was given to China Netcom when the State Council decided at the end of last year to split China Telecom, the country's monopolistic carrier, in two to encourage competition.

The northern part became China Netcom. It consisted of 10 provincial companies belonging to China Telecom and two other carriers - Jitong and the original China Netcom.

The southern part, formed from 21 southern provincial companies, became China Telecom.

Beijing Communications, the fixed-line carrier in the capital, is one of China Netcom's most profitable branches, with more than 5.4 million fixed-line customers. Its revenues have grown 20 per cent in the past two decades, according to Zhao Jidong, the company's president.

"The nine other provincial companies will soon follow Beijing Communications' move and a new China Netcom era will start," said Xi Guohua, president of China Netcom, commenting on Tuesday's move.

The reformed China Telecom and China Netcom were formally announced by the Ministry of Information Industry (MII) on May 16.

But the asset settlement, the most difficult part of the breakup, has been going on for the last few months.

The restructuring is seen by many as a major reason for the significant drop in telecoms investment in the first half of the year.

According to MII, investment for that period amounted to 51.8 billion yuan (US$6.2 billion), a 35.7 per cent drop from the same period last year.

But that situation could change in the latter half after the restructuring is completed and a new round of competition starts, industry insiders said.

According to the MII plan, China Netcom and China Telecom will be allowed to do business in each other's territory.

China Telecom recently opened a northern branch to get ready for the competition.

And Beijing, the economic, cultural and political centre of the nation, will be the target of all telecoms carriers, including those from overseas, the president of Beijing Communications said.