3/8/99 (Beijing) - Zhu Rongji appears to have won State Council approval to sack telecom
Minister Wu Jichuan. The State Council signed off on Wu's sacking at the
end of February, just weeks after Vice-minister Yang Xianzu, was ordered
out of the Ministry of Information Industry (MII) to take over as chairman
of China United Telecommunications Corp (Unicom). This is all part of
China's efforts to reform its telecommunications and converging information
sectors. When Wu will actually depart from the ministry is not yet known
(although it is expected to be in April or May), nor is the identity of the
successor minister.
As a part of the reform program, China Telecom is to be split into four
operating companies - fixed telephony, mobile, paging and satellite
services - in the first half of the year. In the second half the carrier
will begin to reorganise itself administratively, separating into six
regional operations. Substantial jockeying is now taking place between the
provinces as to which will be the lead PTA in each of the regional areas.
The consensus seems to be that this will be the first step along the path
to splitting China Telecom into regional operating companies, along the
lines of the landmark break-up of AT&T in the US in 1984.
The MII is to be further 'down-sized' from 13 departments to perhaps 7 or 8. The
first departments to go, following the NPC will be the finance and personnel
departments. Following this with be the planning and S&T departments and perhaps the
Information Industry department (although the State Council is adamant that this department has a
role to play somewhere).
In addition to the restructuring plans already tabled there is now discussion
about a further functional separation of China Telecom units, with a
separation of the transmission, datacom and PSTN businesses on the cards.
This could result in ChinaNet purchasing bandwidth from China Telecom at the same rates as other
wholesale ISPs.
A regulatory framework for the telecoms industry is now seriously expected
to be ready for the end of the year, in time for next year's NPC when it
could then be placed in front of the law-making body to become China's
first Telecoms Law.
These developments came as US Trade Reps confirmed that talks over China's
accession to the WTO were "back on track" ahead of Zhu's visit to
Washington next month. It now appears possible that one offer Zhu is likely
to table in the US next month, is the opening of the Internet business to
foreign investment. Since this is considered a value-added service, China would notionally
retain its restrictions on basic services.
-- Peter Lovelock, of Big Brains Ltd. HK, can be reached via e-mail at bigbrains@matrixeast.com or by phone in Hong Kong at (852) 2541 2776.
