Vital Connections: New PRC Interconnection Regulations

Telecommunications is not an easy business in the PRC, especially where issues of interconnection are involved. In an attempt to clarify the obligations of carriers, the Ministry of Information Industry recently promulgated a regulation addressing key interconnection issues.

Background

Telecommunications (telecom) and value-added services operators in the People's Republic of China (PRC) face many business and regulatory obstacles. Arguably, one of the most pressing hurdles is the availability of adequate interconnection to enable operators to reach end users. Essentially, interconnection allows different telecom networks to integrate and provide a seamless service to consumers.  The interoperability of services enables consumers to select from a wide range of service providers and effective interconnection between competing providers allows customers of one network to access or use the services of another network.  Industry commentators suggest that open interconnection is a necessary condition for telecom competition and the lack of interconnection is a serious market entry barrier and a crucial factor affecting the profitability of operators.