China United Telecommunications Corp., the country's second largest mobile telecom operator, has obtained the country's first business license from the cultural ministry to run a franchise of Net cafes nationwide, the company announced recently.
The licensing came four months after the company, along with other Net cafe operators, got the approval to run nationwide chains under direct management.
China Unicom had voiced its ambition before it got the direct store approval, with a plan to open 700 cafes this year across the country, with 600 of them franchise stores. The plan has been bottlenecked by the regulations governing franchise stores, which rule that a Net cafe operator must open direct Net cafes before being allowed to tap the franchise business, a lucrative area closely eyed by the Net cafe runners. As a result, China Unicom has so far opened 60 Net cafes across the nation, all under direct management.
Vice president Liu Yunjie said China Unicom plans to launch 150 to 200 direct cafes nationwide by the end of next year in addition to 2,500 to 2,800 franchise cafes. However, in Beijing, a key market competed for by Net cafe runners, China Unicom has to postpone its development space, because it has failed the bid to run franchise Net cafes there. Under the country's rule, Net cafe operators must participate regional bid held by the provinces and direct administrative cities to earn an entry into the local markets. Each province or city is allowed a quota of three Net cafe chains. Despite that, China Unicom will continue the effort to access Beijing, Liu said. But he ruled out possibility to form partnership with the already bid winners to enter the market.