China fixed line carrier China Telecom (ticker: CHA) and mobile operator China Mobile (ticker: CHL) announced a co-operation agreement. The agreement:
- Promotes benign competition, and prevents infrastructure duplication.
- Calls for regular management meetings, cooperation at the provincial
- Suggests that efforts will be made to settle outstanding disputes.
Quick thought: The agreement comes amid speculation that the Chinese
government will restructure state-owned telecom companies. It appears to be an attempt to ease government concerns about fierce competition between the four major telecoms, China Mobile, China Telecom, China Unicom (ticker: CHU) and China Netcom (ticker: CN).
The agreement is also expected to calm official fears about 3G. Some officials are concerned that granting 3G licenses to all four state-controlled operators could mean massive
overspending and burdensome competition.
More Chinese telecom developments from the China Stock Blog here.
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