The Ministry of Information Industry prohibits overseas telecom operators from entering the market indirectly

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The Ministry of Information Industry prohibits overseas telecom operators from entering the market indirectly [Copy link]

Xinbao News (Reporter Liao Qi) The way for foreign telecommunications companies to enter the Chinese telecommunications market was completely blocked yesterday. Yesterday, the Ministry of Information Industry issued the "Notice on Strengthening the Management of Foreign Investment in Value-added Telecommunications Services". The "Notice" stipulates that domestic telecommunications companies shall not rent, transfer, or resell telecommunications business licenses to foreign investors in any disguised form, nor shall they provide resources, venues, facilities and other conditions for foreign investors to illegally operate telecommunications businesses in China in any form.

　　The Ministry of Information Industry stated in the "Notice" that since the promulgation and implementation of the "Regulations on the Management of Foreign-Invested Telecommunications Enterprises", most foreign investors have strictly abided by the requirements of the "Regulations". However, recently, it has also been found that some foreign investors have circumvented the requirements of the "Regulations" with domestic value-added telecommunications companies through domain name authorization, registered trademark authorization, etc., and illegally operated value-added telecommunications services in China. This is also the reason why the Ministry of Information Industry issued the "Notice" this time.

　　In the Notice, the Ministry of Information Industry requires that the Internet domain names and registered trademarks used by value-added telecommunication business operators should be legally held by them (including company shareholders); the sites and facilities should be set up within the business coverage of the business license and be compatible with the value-added telecommunication business that the operator is allowed to operate; and network information security measures should be improved and implemented. The Notice also requires the Communications Administration Bureaus of all provinces, autonomous regions, and municipalities directly under the Central Government to organize companies that have obtained value-added telecommunication business licenses to conduct self-examination and self-correction, and to further strengthen the review of the setting of domain names, registered trademarks, servers and other facilities, as well as information security commitments and other materials in the daily approval of value-added telecommunication business licenses.

　　Regarding the cooperation between foreign investors and domestic value-added telecommunication companies, the Notice emphasizes that the Internet domain names used by value-added telecommunication business operators should be legally held by them (including company shareholders); the registered trademarks used by value-added telecommunication business operators should be legally held by them (including company shareholders); the sites and facilities should be set up within the business coverage of the business license and be compatible with the value-added telecommunication business that the operator is allowed to operate, etc.

　　According to China's relevant commitments when it joined the WTO, China will initially open up network services when it joins the WTO; starting from the end of 2004, foreign capital can hold less than 25% of the shares in the basic telecommunications industry in some parts of the country, and this proportion will be relaxed to 49% at the end of this year. However, such commitments did not set off a trend of foreign telecommunications giants entering the Chinese market. Except for some foreign operators who applied for value-added services and entered the actual enterprise establishment procedures, there were no foreign operators in the basic business sector who were ready to apply for the establishment of joint ventures, which made the foreign direct investment in the basic business sector continue to maintain a "zero" record in 2005.