The industry regulator in China is the Ministry of Information Industry (MII). There are six main operators in China: China Telecom, China Netcom, China Mobile, China Unicom, China Tietong, and China Satcom. The MII was formed in April 1998 through the merger of the Ministry of Posts and Telecommunications (MPT), the Ministry of Electronics Industries (MEI), and parts of the Ministry of Radio to form the Ministry of Information Industry (MII). In August 1998, the MII also absorbed the former Radio Regulatory Commission, State Council Regulatory Commission, and other satellite agencies. As an integral part of the State Council, the MII is a regulatory body in charge of the manufacture of electronic and information products, communications and the software industry, as well as the promotion of informatization of the national economy and social services in the country.

China’s fixed-line market is dominated by incumbent operators China Telecom and China Netcom, which have a near-monopoly on the provision of local access lines in the country. By the end of December 2004, the number of fixed users in China has exceeded 300 million, up to 312.44 million. The fixed-line penetration was around 24.9%. Especially, the number of urban telephone users has exceeded 200 million, up to 210.85 million; and the number of rural ones has exceeded 100 million, up to 101.6 million.

China is the world’s largest market for mobile services with 334.83 million mobile subscribers at the end of December 2004, in some provinces the number of mobile subscribers exceeds the number of fixed lines and many Chinese use mobile services as their primary telecommunications resource. The overall mobile penetration rate in china at the end December 2004 was around 25.9%, although it is much higher in the large cities. China Mobile’s main competitor in the provision of communications services is China Union which operates GSM and CDMA networks, in addition to offering fixed-line long-distance, voice over Internet protocol (VoIP), leased lines, and Internet and data services. China Unicom is the only operator authorized to provide CDMA services. China mobile is much larger than China Unicom and dominates the Chinese mobile market; in fact it is the largest mobile operator in the world in terms of the number of subscribers.

In the environment that global telecommunication industry is paying attention to 3G, operators, equipment manufacturers and mobile phone vendors in China have made good preparations for the coming 3G times, though 3G in China doesn’t actually roll out. 3G will not only boost China telecommunication development, but also provide more opportunities and challenges for China telecommunication market.