China Opens Up Telecom Sector; Alibaba and Rival Get Licenses

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The top telecom regulator in China said on Thursday that it had granted 11 licenses to private companies for running mobile telecom businesses which they will run after leasing services from the government owned carriers.

The creation of these virtual telecom operators was long expected and is thought of as the first step towards doing away with the monopolies held by the three state run telecom enterprises: China Unicom, China Mobile Ltd and China Telecom Corp.

One of the companies getting the licenses is a subsidiary of Alibaba Holding, which is the top e-commerce provider in China. The rival Beijing Jingdong Century Trading Co, also known as JD.com, has also got a license.

According to reports JD.com will start offering services in the second quarter of next year and is aiming ab becoming the fourth largest telecom operator in China in five years time.

The Chinese Ministry of Industry and Information Technology has said in a statement that this new plan will “stimulate competition” in the telecommunication industry and will also open more choices for the users.

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