Telecom and Mobile told to play nicely

29 Mar 2005

Chinese telecom heavyweights, China Mobile and China Telecom Corp, have signed a ‘strategic cooperation agreement’ as part of the state’s attempts to boost competition in the wireless market whilst reigning in cut-throat competition. Fixed line operator China Telecom Corp has been treading on China Mobile’s toes with the aggressive promotion of its PAS wireless services as a cheap alternative to traditional cellular telephony, and state officials fear the burgeoning price war between the two could undermine the sector’s long-term prospects. The new pact sees both telcos agreeing to ‘use resources reasonably and avoid duplicated construction’, a heavy hint that Beijing no longer wants to see its operators squabbling amongst themselves. The wide-ranging deal will see the companies’ leadership meeting regularly whilst joint work will ensure cooperation at the provincial level. The deal is just the latest attempt by the state to reinforce its control of the telecoms sector, including its decision late last year that the executives at three major operators – China Telecom, China Mobile and China Unicom – should swap jobs.