Alibaba Unit Wins License to Compete in China Wireless Market

December 26, 2013 Leave a comment

Alibaba Unit Wins License to Compete in China Wireless Market

China took a step toward opening the world’s largest wireless market by awarding licenses to operate to 11 companies, including a unit of Alibaba Group, the industry regulator said.China will allow the companies to lease wireless capacity from the nation’s three existing carriers in a trial program intended to boost competition in the $213 billion market, according to a statement on the website of the Ministry of Industry and Information Technology today. The country’s carriers now, China Mobile Ltd., China Unicom (Hong Kong) Ltd. (762) and China Telecom Corp. (728), are all state-run.

Opening the market to new operators, which also include Telling Telecommunication Holding Co. (000829), Beijing Bewinner Communications Co. (002148) and Lianlian.com, is aimed at helping to cut prices, bring more choices and improve customer service to the nation’s 1.2 billion wireless users. The new licenses have been granted as part of a two-year trial to try to bring more competition into the market.

“Most of the new operators will look for a niche segment to differentiate their offerings from the major carriers,” Sandy Shen, a Gartner Inc. analyst in Shanghai, said in an e-mail before the announcement. The new operators may offer specific products and services at cheaper prices, she said.

Carriers are being pushed to improve customer service to encourage users to switch to service plans on faster networks in a nation where two-thirds of the subscribers have yet to upgrade to third-generation networks. China’s regulators this month issued licenses for the start of commercial service on fourth-generation networks.

The new private companies entering China’s telecom market will capture about 10 percent of the nation’s mobile-phone connections by 2018, according to estimates from Nicole McCormick, an analyst at researcher Ovum.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

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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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