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We're rapidly running out of days in October for two major telecoms developments that many were expecting this month, namely the awarding of new licenses for 4G wireless service and for new telecoms service providers known as virtual network operators (VNOs). There are still 10 days left in the month, so it's possible that one or both could still happen. But the usual delays could mean we may not see any major announcements for a little while longer. Meantime, media are reporting some new information on a timetable for the VNO roll-out, and in another major development that could shake up the status quo, media are also saying that leading wireless telco China Mobile (CHL) could soon get a license to offer fixed-line telecoms services.

I've been writing about the VNO development for awhile now, as it's really quite exciting with the potential to instantly triple the number of telecoms service providers in the market from the current three to a new field of 8-9 operators. Equally important, most of those new operators, which would lease network capacity from the existing three telcos, are private sector firms. That means they should be much more nimble and innovative than the current monopoly of three big state-run companies, China Mobile, China Unicom (CHU) and China Telecom (CHA).

In the other development, the award of a fixed-line service license for China Mobile could also bring some much needed new life to the market for broadband services delivered over wired networks into homes and offices. That market is currently controlled by Unicom and China Telecom, which came under the microscope two years ago when China's powerful state planner investigated the pair for monopolistic behavior. (previous post)

So now let's turn to the latest reports, starting with one that says the upcoming field of VNO operators could formally launch their new services during next year's May 1 holiday. (Chinese article) That's when the Ministry of Industry and Information Technology (MIIT), China's telecoms regulator, is reportedly set to formally give out the first set of phone numbers to the new set of VNOs, which would then be allowed to start selling those numbers to retail and business customers.

The reports say the three existing telcos recently finished their selection process for VNO partners, and that each has recently submitted its choices to the MIIT. Previous reports indicated that electronics retailers Gome and Suning were among the finalist candidates, though no pure Internet companies were included. This latest timetable makes an official October VNO announcement look unlikely, though I'm still hopeful we'll see something by the end of this year.

From the VNO development, let's look at the other reports that cite a knowledgeable source saying China Mobile will soon receive a license to operate a fixed-line network. (Chinese article) China Mobile has been strongly lobbying for such a license for the last few years, since such wired service typically offers faster and more stable broadband connections than current wireless technology. But the regulator resisted the pressure, worried that China Mobile already dominates the wireless space with around two-thirds of the market.

These latest reports say the MIIT finally changed its mind after coming under pressure from the National Development and Reform Commission (NDRC), China's state planner, which first accused China Telecom and Unicom two years ago of monopolistic behavior in the fixed-line space. The awarding of a license to China Mobile would inject some much needed competition into the fixed-line sector, and would also give China Mobile a major new potential growth source.

This solution isn't really ideal, since China Mobile is another big state-run company that's prone to the same monopolistic behavior that we're seeing from Unicom and China Telecom. But the politically sensitive nature of network ownership means we're unlikely to see Beijing let private companies build telecoms networks in China anytime soon, meaning this might be the best solution we'll see for now.

Bottom line: China is likely to award VNO licenses by the end of this year, with service likely to launch around next May.

Source: China Mobile Eyes Fixed-Lines, VNOs In May Launch