China MVNO move opens door for OTT players

Tony Brown/Informa Telecoms and Media
18 Jan 2013

I was in a hotel bar in Hong Kong when I got one of my first major tipoffs as a budding telecoms journalist. It came from a well-lubricated telecoms-industry executive whom I never saw again.

“Look, I shouldn’t really be telling you this, but something big is about to happen in China,” he said. “Can you keep a secret?”

“Yes, sure,” I replied.

“Well, this really is top secret, but the deal is almost done so it can’t do much harm now,” he said. “Virgin Mobile is going to launch as an MVNO in Shanghai. Unbelievable, isn’t it?”

That was way back on Oct. 11, 2003 and Virgin Mobile never did get to launch as an MVNO in China – and nor did anyone else for that matter.

MIIT green-lights MVNOs

In the years since that boozy exchange took place, I never thought much about MVNOs entering China until last week – nearly a decade later – when reports claimed that the Ministry of Industry and Information Technology (MIIT) was finally considering allowing them into the market.

The reports claimed that proposed MVNO trials would take place over two years, with mobile operators having to take on at least two MVNOs each, though MVNOs would be restricted to domestic companies only.

The MVNO trials are the latest attempt by the MIIT to bring greater private investment and more competition to the telecoms market. But, as is always the case with China, there are plenty more questions than answers.

For example, will the MIIT be involved in setting wholesale prices between operators and MVNOs? If not, what will the MIIT do if operators play hardball and don’t strike reasonable deals with MVNOs? There is little point allowing MVNOs into the market if operators don’t offer them viable wholesale prices.

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