Telecom shake-up takes off - at l;ast

via WikipediaThe long expected reform of China's telecom industry seems to have taken off on Friday as trade in shares was suspended and the first major shifts in management posts were announced, reports Reuters and Market Watch. Reuters writes:

China Mobile will take over fixed-line peer Railcom while absorbing executives from rivals, the opening act of an overhaul that is likely to culminate in fixed-line operator Netcom (0906.HK: Quote, Profile, Research) merging with wireless player Unicom (0762.HK: Quote, Profile, Research), analysts and a source briefed by top management at one of the firms said.

Sources with direct knowledge of impending moves said the government is also orchestrating management changes at the country's other telecoms providers, including moving Unicom's president, Shang Bing, to fixed-line leader China Telecom (0728.HK: Quote, Profile, Research) as its party boss.

The move is not only going to consolidate the number of players, but will also have to justify a few baked-in faults of the first major reshuffle of the telecom industry in the second half of the 1990s, led by then prime-minister Zhu Rongji.
Zhu then wanted to break the power of the quasi-monopolist China Telecom and broke the company first according to functionalities and then also in a north-south divide. From that reform four major companies emerged: China Mobile and China Unicom for mobile phones, China Telecom and China Netcom for fixed lines. Because of the changes in the industry, the fixed lines market is shrinking, while the mobile phone market is booming, especially when the third generation mobile phones (3G) is going to be introduced.
Only with a licence for 3G telecom companies can survive and China is possibly not going to issue more than three.
Behind the curtain infighting and technical problems has delayed the introduction of 3G, including the Chinese standard of TD-SCDMA for years. The Beijing Olympic games were supposed to be the event to show off the new technology, but that seems to be too late now.