China Classifies Telecom Services

By Nancy Leigh,  Baker & McKenzie, Hong Kong

Is China Telecom's popular "Xiaolingtong" wireless phone service a mobile phone service or is it a fixed-line service? Did Chengdu operator Tailong Telecom provide fixed-line services disguised as the sale of network services to local users? In April 2003, the Ministry of Information Industry (MII) attempted to address such confusion by releasing a second revision to its Classification of Telecommunications Services (Classification). MII officials suggest that the new Classification is the source document clarifying former grey areas and highlighting service opportunities for both foreign and domestic investors.

Certainly, the revised Classification is more detailed, but still maintains the general distinction between basic telecom services (BTS) and value-added telecom services (VATS). In addition, while the earlier versions of the Classification simply specified the names or types of telecom services, the revised Classification attempts to define the scope of each service to address earlier criticism that the Classification was far too vague in its definitions.