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Rumor: MIIT to Spur Private Investment in Last Mile Networks

Beijing Business Today, 6/14/11

Industry sources revealed yesterday that China's Ministry of Industry and Information Technology (MIIT) was preparing to announce plans to further encourage private capital investment in the telecom operator market. The plan, currently under revision before submission for review by China's State Council, will encourage operators to partner with broadcasting authorities and private capital to establish joint venture companies (with state-owned capital to account for 51% and private capital for 49%) to engage in "last mile" customer premises network construction.

"Customer premises network" refers to network equipment related to both on-premise networks and customer network terminals. It could refer to private residential compounds or to office buildings or company campuses; it could not, however, include city-level access networks. The same type of network is often called the "last mile" within the industry.

In some cities, real estate developers make telecom operators bear the cost of customer premises network equipment as a means of reducing costs for themselves. In order to secure the right to provide network access for a given community, some operators sign exclusive network access and network equipment agreements with real estate developers or property management companies, depriving customers of the right to choose.

Editor's Note: For more information on this topic, please see "Property Developers Charging Operators High Fees to Deploy FTTx," MD 6/07/11 issue.

Keywords: regulation telecom network construction MIIT State Council private investment JV


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