Unicom and Telecom face investigation

9 Nov 2011

China’s two largest broadband providers by subscribers, China Telecom and China Unicom are facing an anti-monopoly investigation from the National Development and Reform Commission, according to local news source The Economic Observer. The telcos stand accused of abusing their dominant market position by practicing price discrimination, charging higher prices for the use of their infrastructure to companies that are in direct competition. Between them, China Unicom and China Telecom represented 87.5% of the broadband market at the end of June 2011 with more than 120 million subscribers, according to TeleGeography’s GlobalComms Database. The government estimates that enforcing competition in the sector could decrease end-user prices by around a third over the next five years. If found guilty by the commission of abusing their market dominance, the telcos could face fines of 1%-10% of their annual operating revenue.