China's National Audit Office will send teams to conduct data collection and investigation of the five major telecom operators of China Telecom (CHA), China Mobile (CHL), China Netcom (CN), China Unicom (CHU) and China Tietong in October.
According to a representative from CNAO, this is the first time that a national-level agency like CNAO has ever conducted an investigation of this sort in the telecom industry to know about the real situation of the industry. The data collected during the investigation will be used as basis for solving such problems as unbalanced development of the telecom industry, which is said to be the premise for the restructuring of the industry.
Lu Xianhong from Tsinghua University's Information Technology Research Institute has told local media this large scale investigation means that the restructuring of China's telecom industry is no longer just talk, and now action will begin.
Though the price war launched to attract more users among each telecom operator is good for the consumers, it is rumored to have caused a decrease of revenue for the companies. Since China needs to invest a large amount of money into the telecom industry and the upcoming 3G and 4G services, the country is sensitive to fluctuations within the sector.
Some local analysts say that the delay in 3G license issuance has perhaps something to do with the unsettled reorganization of the telecom enterprises. In order to find data support for the restructuring plan, an external force like the National Audit Office is needed to intervene to know about the details of the industry.
At present, though the four major Chinese telecom operators, including China Telecom, China Netcom, China Mobile and China Unicom have listed and hold diversified businesses, the State still hold the majority party of their shares. For the State-owned Assets Supervision and Administration Commission, the telecom industry is irreplaceable among the nation's 21 key industries.
Income from telecom operations accounted for CNY1400 billion of SASAC's total CNY9000 billion assets, and among the total profit of CNY754.69 billion in 2006, CNY104.73 billion was contributed by China Telecom, China Netcom, China Mobile and China Unicom, while the profit of China Tietong and China Satcom was not included as they were not publicly traded.