China’s Top Telecom Operators to Cut Fees with Upcoming Anti-Trust Probe

August 28, 2013 Leave a comment

China’s Top Telecom Operators to Cut Fees with Upcoming Anti-Trust Probe

08-27 11:43 Caijing

The NDRC has delivered a combined fine of roughly 1.5 billion yuan so far this year in a string of anti-trust probes. China’s top telecom operators may further cut mobile and Internet service fees after the lucrative industry became one of the latest targets by the county’s economic planner in its antitrust campaigns. The National Development and Reform Commission (NDRC) will work together with the Ministry of Industry and Information Technology to push downward the country’s telecom charges in the rest months of the year, the Economic Information Daily reported.The move is in line with the NDRC’s broad campaign against monopoly, the Xinhua-run newspaper said, following a string of crackdown in industries such as dairy production, wine, pharmacy, auto vehicles and gold.

The NDRC has delivered a combined fine of roughly 1.5 billion yuan so far this year in the probes, most of which targeted industrial champions both home and abroad.

Against such a backdrop, the three leading mobile operators, China Mobile, China Telecom and China Unicom, will have to react quickly to avoid falling victim to the anticipated move.

The three telecom operators, which occupy nearly the market share in total, will be under “close watch”, the Economic Information Daily said, quoting a source close to the NDRC.

“Telecom charges have long been a key concern.. of consumers, which is likely make it a breakthrough of [the NDRC’s]anti-trust campaign,” the source said.

In addition to investigations, the NDRC will also unveil measures for further reduction of telecom charges, the source added.

The state-owned giants have in fact been forced to cut fees since 2011, when they were investigated by the NDRC for discriminatory pricing for access to their broadband network.

The companies have cut international roaming fees by an average of over 50 percent since first quarter this year. China Telecom and China Unicom lowered their charges on internet access services in the second quarter, while China Mobile initiated another cut in international roaming fees in the third quarter.

The companies will most likely to cut charges on broadband services, the paper said, with declines at between 30 percent to 50 percent.

“The three operators will have no other choices but to cut fees…. , given the high pressure from the NDRC,” the source said.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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