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Rumor: NDRC Continues ISP Antitrust Investigation

The Beijing News, 11/22/11

A source within China's National Development and Reform Commission (NDRC) yesterday denied rumors of a settlement in its antitrust probe of China Telecom (NYSE: CHA; 0728.HK) and China Unicom (NYSE: CHU; 0762.HK; 600050.SH). The source said that the NDRC's antitrust division had sent investigators to five Beijing-based internet service providers (second-tier ISPs offering subscribers internet access, information services, and value-added services) and collected detailed evidence indicating that Unicom had implemented a policy of pricing discrimination against competitors.

Beijing University of Posts and Telecommunications (BUPT) professor Kan Kaili said that China Telecom and Unicom had set extremely high internet access prices for second-tier ISPs, while quoting its own major clients, such as banks, prices that were only fractions of those.

A spokesperson for the NDRC's antitrust division told reporters yesterday that it was increasing its efforts on the case, but gave no time frame for when results might be announced, saying only that antitrust cases were complicated, and reminding reporters that some overseas antitrust cases took three to five years to investigate.

Editor's Note: For more information on this topic, please see "Rumor: China Telecom, Unicom May Resolve Antitrust Probe," MD 11/21/11 issue.

Keywords: regulation Kan Kaili China Telecom China Unicom antitrust telecom Internet access NDRC 0728.HK 0762.HK 600050.SH CHA CHU

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