China’s decision to greenlight over 100 foreign-invested telecommunications entities to pilot value-added services (VAS) in the country could be a major boon for some multinationals, though its impact on the domestic market is likely to be limited, according to industry analysts.
The Ministry of Industry and Information Technology (MIIT) said on Wednesday that it had approved licences for 166 foreign companies since February last year, covering VAS sectors including internet data centres, internet access and information services.
While the move signalled a step forward in market accessibility, industry experts noted it was unlikely to fundamentally disrupt China’s domestic telecoms landscape.
China has gradually eased restrictions on non-Chinese telecoms VAS providers, having lifted the previous 50 per cent foreign ownership cap to allow wholly foreign-owned enterprises to operate within pilot zones, including Beijing, Shanghai, Hainan and Shenzhen.
However, the sectors being opened were already fiercely contested, according to Yang Guang, a senior principal analyst covering communications at consultancy Omdia. Furthermore, the easing of restrictions remains limited to pilot zones.
“I don’t think there will be a significant impact on the domestic market,” Yang said.
