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FOCUS: BT, First Foreign Telecom With Nationwide China License
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First Foreign Telecom With Nationwide China License
By Dina Grebo
BT 201904 FOCUS 01国际首家!英国电信在中国获得电信许可证





BT 201904 FOCUS 02On January 25th, British multinational company BT, formerly known as British Telecom, announced that it became the first non-Chinese telecom company to be granted a nationwide operating license in China by the Ministry of Industry and Information Technology. The company received two licenses: China nationwide Internet Service Provider (ISP) and China nationwide Domestic IP-VPN license. The permit, which the company obtained, will allow it to contract directly with Chinese clients and also to bill them in the domestic currency, while at the same time enabling the BT to become direct competition to domestic telecom firms, including China Mobile, China Unicorn and China Telecom.

This step is very important for China, due to the presence of multinational customers who need secure and very reliable connectivity to run their daily operations. What also makes this step important is that the process of connecting and billing will be meaningfully simplified. After the announcement was made, the company added that it will continue to focus on foreign companies that operate in China. According to the official website of the company, there are numerous multinational corporations that use the services of BT, including: Novartis, P&G, PepsiCo, ZTE, Sinopec, Huawei and many other.

It can be said that issuance of this permit came as a surprise, if one considers increased tensions between Chinese and western telecoms lately. As a result of those tensions, the UK has blocked Huawei from taking part in 5G network infrastructure bids. BT, however, announced their plans for removing the 4G network equipment in the time span of two years. International Trade Secretary of the United Kingdom, Liam Fox, reacted regarding the news that BT received this permit by saying that he is “pleased that close cooperation between the UK and Chinese governments has resulted in BT securing those licenses, which will enable it to operate across the country”.

BT 201904 FOCUS 03Telecom sector

This is, yet, another example of China’s efforts to further open up its market access to foreigners. It is expected that this move will motivate foreign investors to expand their investments in China. Ministry of Commerce and National Development and Reform Commission both have expressed interest to ease market access to foreign investors in numerous different sectors in addition to telecom sector including: manufacturing, education, medical industry, entertainment industry, mining, agriculture and other. Another goal is to expand areas in which foreign companies can independently work in China. The government hopes their efforts will attract many more companies to settle their operations here.

China is on its path to further open up to foreigners, and telecom sector is one of the key sectors on the agenda. Foreign investors keep on increasing their share in numerous telecom services, and authorities expect the trend will continue in 2019, as well. Based on the report of the China Academy of Information and Communications technology, the number of foreign-invested companies in this sector, which were granted operation licenses, was 121 in 2018, which is 39% more in comparison to the year earlier.

BT 201904 FOCUS 021Partnerships with foreign companies

Some foreign companies also found their way to penetrate Chinese market by partnering up with domestic, state owned telecoms. For example, China Telecom and Orange Business Services recently publicized that their strategic partnership will extend into IoT space. Their new form of cooperation will allow each of the companies to provide services to their customers in Asia, Europe and Africa through a combined imprint. Two companies intend to cooperate not only commercially, but also technically with a common goal to produce new service models, which will support global IoT prospects. On the one side, this agreement basically makes Orange preferred partner of China Telecom for connectivity on the mentioned continents. On the other side, China will provide support to Orange when it comes to connectivity in China. In addition, companies also agreed to explore other business opportunities together.


British multinational company BT became the first non-Chinese telecom company to be granted a nationwide operating license in China. Chinese telecom sector is dominated by the three state owned players and the competition in this sector is fierce. However, China is the most populous country in the world and capturing even a small fraction of the market share here is comparable to capturing a significantly larger market share in some less populated country. That is why receiving this license is a big step for BT.

It is expected that other telecom companies will also be granted license, which is in accordance with the opening up strategy. It is already familiar that Orange applied for the same permit. This means that consumers will probably benefit the most from companies striving to produce better services, while trying to combat incumbents in the sector and also foreign newcomers. Moreover, the Government is promoting faster and cheaper internet connectivity in major state-owned telecom companies, which implies that foreign companies will have to struggle even harder to attract customers.

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