China reshuffle

China: Some analysts believe it would wish to reshuffle its telecom market. The nation economy is booming, the telecom industry is receiving high levels of investment, there is a huge development of mobile telephony, and future great opportunities will occur with the introduction of 3G and new telecom services (triple play, IPTV, …). So time seems favorable for reshuffling the industry, and in addition remarks from officials could let think so. What could be possible and is rumored? China Unicom could be split; the GSM network could be sold to China Telecom, and China Unicom going on with its CDMA network. China Unicom poor recent results even raise questions about whether the company could be dissolve. It is also rumored that China could deliver three 3G licenses this year and no license would be given to Unicom.

Adding to the confusion, China Telecom and China Netcom have asked Chinese regulators about buying one of Unicom’s networks.

Whatever happens, consolidation, rationalization or specialization, China has to decide relatively quickly of the future telecom structure, and in any case, in my mind, before granting 3G licenses. That gives Chinese regulator some months to think the best organization.