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BT announces entry into China

China Economic Net

Recently, British Telecom (BT) official website announced that the company became the first international telecommunications company to obtain a national license issued by the Ministry of Industry and Information Technology of China, obtained two business licenses - China's national IP-VPN license and China's national Internet Service Provider (ISP) license.


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These two “licenses” will allow BT's communications company in China, British Telecom Communications Information Consulting (Shanghai) Co., Ltd. (hereinafter referred to as “British Telecom”) to directly sign contracts with its global customers in China, and toll.
When the news came out, it was posted on Weibo. The netizens blasted the pot: China has the fourth largest operator? Can we use foreign mobile phone cards? Is our mobile phone tariff going down? Many netizens expressed concern about cyber security issues, "will it be monitored?", "Is personal information collected?"
In response, the Daily Economic Journal reporter interviewed Zuo Pengfei, assistant researcher of the Information and Network Economy Office of the Institute of Quantitative and Technical Economics of the Chinese Academy of Social Sciences. He answered the questions in detail.
It is of great significance to obtain a Chinese license
“The telecommunications industry involves personal privacy and communication data. It is not the state's commitment to open areas. BT is the first international operator to obtain a telecommunications license in China, which means that BT can provide network services and information services for Chinese companies and ordinary users. Therefore, this opening is of great significance." Zuo Pengfei told the daily economic journalist.
In fact, the call for the expansion of the telecommunications market has been around for a long time, and the relevant departments of the state have also taken a series of measures to promote the opening of the telecommunications market.
The reporter noted that the "Notice on Further Doing a Good Job in Private Investment" issued by the General Office of the State Council in 2016 mentioned that it is necessary to further liberalize access to basic telecommunications operations and other fields in areas such as infrastructure and utilities. Various explicit or implicit thresholds to promote fair competition. The Ministry of Industry and Information Technology has also issued several articles to promote the pilot opening of broadband access network services.
BT's official website shows that China is a diversified market that is undergoing a major transformation. It is rapidly evolving from a traditional low-cost manufacturing country to an emerging market driven by fashion luxury brands, innovation, growing front-end businesses, and high-value market players.
In this context, BT's national license issued by the Ministry of Industry and Information Technology also demonstrates our country's determination and sincerity to adhere to the opening up.
Bas Burger, CEO of BT Global Services, said: “With the cooperation of the Chinese and UK governments, we are able to obtain a national value-added telecommunications license in China, which will expand the scale to meet the needs of global customers. And charging will greatly simplify the process of providing network connectivity and other communication services."
The reporter noted that the report on the development trend of foreign-invested telecommunications companies (2018) issued by China Information and Communication Research Institute shows that at present, foreign-invested and operated telecom services are mainly concentrated in the value-added telecommunications business. By the end of 2018, a total of 121 foreign-invested telecommunications companies had been approved, an increase of 39% year-on-year. Among them, 86 were issued by the Ministry of Industry and Information Technology.
Business does not involve mobile communications and fixed lines
In fact, BT has entered the Chinese market since 1995 and is now expanding in size. Its official website shows that its network covers more than 330 cities across China, and has close strategic partnerships with China Mobile and China Unicom.


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BT's customers in China are multinational companies such as Procter & Gamble, Novartis, Unilever and Reuters, which provide global IT services to these companies. It also serves China's emerging multinational customers, such as Huawei, Air China, Sinopec, and ZTE, providing network IT services covering the Asia-Pacific region and the world to help them expand and accelerate their globalization.
The British Telecom, which was granted the license, was incorporated on October 29, 2015. The company's registered capital is 10 million RMB, and BT Hong Kong Limited and Shenzhen Huaxia Chengzhi Management Consulting Co., Ltd. The two major shareholders, each holding 50%.

In September 2018, the company changed its business scope. After the change, the scope of the domestic Internet virtual private network business has been removed from the "Shanghai only", and the Internet access service business has been added (only for Internet users to provide Internet access services).
Zuo Pengfei told the daily economic journalist that the national IP-VPN license (virtual private network) is mainly for enterprises. This network refers to the internal office network used by enterprises. Enterprises with this license can be internal to other enterprises. Provide a large local area network to help enterprises achieve cross-regional and inter-departmental internal and external network connection services. At present, there are about 390 domestic service providers. The service provider brands are mainly composed of three major telecom operators, including China Netcom, China Railcom, China Enterprise Communications, and Pacific Telecom.
The national Internet Service Provider (ISP) license is mainly for individuals, and usually provides Internet-related services to ordinary users, such as access, search, instant messaging, email, online news, etc. The typical representative is also the three major operations in China. Business.
"As for mobile communication services, BT does not have a basic telecommunications service license in China because it involves national security and personal privacy, so its business does not involve mobile communication services and fixed-line services." Zuo Pengfei said.
Since BT does not have a Telecommunications and Information Services Business License (ICP), BT can only provide Internet-related services for domestic users, and does not provide Internet content.


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In the short term, it will have little impact on the three major operators in China.
The status quo of domestic telecommunications infrastructure is also a long-standing one. Many people speculate that BT’s license will not impact the three major operators.
In this regard, Zuo Pengfei told reporters that BT is mainly engaged in broadband services for domestic users, while broadband services are not the focus of the three major operators of mobile, China Unicom and telecommunications, so in the short term, BT will operate on three major operations. Business has little impact; at the same time, broadband operations also need to build infrastructure such as backbone networks, and it will take some time for BT to provide broadband services to domestic users.
Therefore, from the current situation, it seems premature to hope that BT's entry will stimulate the three major operators, and thus the reduction of Internet tariffs.
The reporter noted that some insiders believe that from a global perspective, the average ARPU (Average Revenue Per User) and the profit level of domestic operators are also at a relatively low level internationally, if domestic users do not have With so much, the days of the three major operators may have been extremely difficult. Therefore, it is unrealistic to expect foreign operators to come in to form tariff competition.
User choice is more diverse
So, what impact will BT's entry have on our average users?
Zuo Pengfei said that because the development of China's telecommunications industry is relatively mature, the competition among telecommunications companies has been very fierce, and individuals or enterprises have certain dependence on telecommunications services. The entry of BT will not produce special for ordinary users. The big impact, "but competition has helped improve the quality of telecommunications services, giving users a more diverse choice."
The reporter noted that on October 3, 2018, the British Communications Authority (OFCOM) released the annual report "Selecting the Best Broadband, Mobile and Fixed Telephone Operators - Quality of Service Comparison 2017", which compares the main UK The service performance of telecom operators demonstrates the quality of service indicators of these telecom operators in broadband, mobile and fixed-line telephones. Among them, BT's user satisfaction reached 79%, slightly lower than the 80% average. However, the report mentioned that BT has been well received by users in terms of rapid repair failures, and most of the problems encountered by users can be repaired within one working day.

For many cyber security issues that many netizens are worried about, Zuo Pengfei said that BT's related network services in China must comply with relevant laws and regulations of China, such as cyber security law, telecommunication service regulations, telecommunication regulations, and Internet information service management. Ways, etc., so users who are worried about being monitored or personal information disclosure problems are hard to happen. If there is a problem, BT will also be sanctioned by our laws.
Industry insiders said that the entry of BT is indeed a landmark event, but there are still many technical issues to be clear, and how to implement the cyber security issue is the key. "Since the first step, the Chinese and British sides have taken the lead. Obviously, similar issues have been involved in the discussion and consideration, and there must be corresponding solutions," the source said.