NTC attended the one day event dedicated to providing information to foreign companies looking at taking an active role in China's growing Telecom Value Added Services. The event was organized by the European Union and the VAS committee in China, which is under the Chinese Ministry of Information Industry (MII). MII is the interlocutor for telecom services. The committee also consist of members from the China Telecom, China Netcom, China Mobile, China Unicom, China Satcom and China Railcom.
The speakers where all from multinationals, such as Nokia and France Telecom (main sponsors), Finish technical research company, the Beijing University of Posts and Telecommunications and the German laboratory of software Integration Technologies.
The meetings outline was to discuss and understand Chinas VAS service, the process to enter the market, partner, or get a license to operate the VAS service.
The Telecom VAS business in China is still very complicated for both local companies and foreigners wanting to enter as the Mobile Operators (MO) are the key deciders. Very few licenses have been issued to foreign companies and once they have a license they may only hold 50% share of the VAS company. This renders the participation in the market less interesting for foreign investors.
To complicate things more, the MO has the right to decide if you have VAS capabilities for China but also what % of margin you should get from them. Once you have negotiated and agreed, only then can you apply for a license with MII. This process takes up to a year for foreign companies as the interpretation of the WTO listing of services is very restrictive and involves a lot of paper work. It also only applies to one region, applications need to be made for each region.
Under the WTO commitments, by 2006 MII should provide similar license process and accessibility to Chinese as to Foreign companies.
The only optional now possible for foreign VAS companies which is both straight forward and gives instant accessibility is by acquiring a Chinese VAS company through a WFOE (wholly foreign owned enterprise) company in China. |
