Beijing (CNS) - China Telecom and China Unicom, two state-owned telecommunications operators, are being investigated for monopoly of broadband access, according to the China National Development and Reform Commission(NDRC). It is the first time for state-owned enterprises to be regulated in line with China's Anti-Monopoly Law.
Since the release of the law in 2008, it has been confronted with many challenges, particularly when it comes to the variety of state-owned enterprises which perform as monopolies, said Lu Shuguang, professor at China University of Political Science and Law.
The NDRC's move against the two telecom operators has been regarded as a milestone in the anti-monopoly movement.
For a long time many people wrongly assumed that state-owned enterprises would be exempted from the Anti-Monopoly Law, so large state-owned enterprises were shocked by the current plight of China Telecom and China Unicom, said Wang Xiaohua, director of the Economic Law Office under the Law Research Institute at the Chinese Academy of Social Sciences.
It has been speculated that China Telecom and China Unicom will be fined about 1 billion yuan each, and that network prices will be reduced 80% in five years. However, Mei Xinyu, a researcher at the Commerce Department Research Institute, warned that such predictions may be exaggerated.
There are also rumors that the anti-monopoly investigation could spread to Sinopec and PetroChina, the two biggest state-owned oil and gas enterprises.
In response to the speculation, Shi Jianzhong, a professor at China University of Political Science and Law, explained that the pricing behavior of China Telecom and China Unicom is a kind of marketing behavior, which is restrained by the Anti-Monopoly Law. However, Sinopec's and PetroChina's pricing is governmental behavior that is beyond the Anti-Monopoly Law's regulation.
Only when the pricing of petroleum products fits into the market mechanism can the Anti-Monopoly Law be properly applied, Shi added.
