China Telecom

In China telecom industry reformation, as the regulation is limitedly loosened and the competition is introduced, the property right of the state-owned telecom enterprise isn't touched all the time. So domestic civilian capital is very difficult to become the shareholder of basic telecom industry. Property right can't be multi-element. The governing structure in mutually restricted companies can't come into being.Firstly the national autocratic monopoly situation in China telecom industry is analyzed in this article. It discusses the definitions of administration monopoly and natural monopoly and the differences between them, and emphasizes that the attribution of natural monopoly in telecom industry will change along with the development of telecom technology, the expansion of market scale, the diversification of telecom service variety and the cost-price structure .It analyzes the relationship between natural monopoly industry and government regulation, and explains why government regulate natural monopoly and the essence point of the government regulation policy.Secondary, it analyzes the necessity and the feasibility to introduce private capital in our national telecom industry. In the aspect of the necessity, we consider the reasons are as follows: 1) The target of telecom field reformation is to establish the adequately competitive mechanism; 2) The key to introduce adequate competition in telecom field is to form the price competition mechanism on the basis of market as soon as possible; 3) China telecom must firstly open to domestic private capital as abidance by WTO agreement to open outside; 4) The introduction of private capital will promote the international competitiveness of China telecom industry. In the aspect of the feasibility, we divide telecom market into three degrees market from the point of view of industry chain, and at the same time point out that we should open roundly to private capital in second-degree and third-degree market. On the premise of guaranteeing the efficiency of first-degree market, capital should be introduced reasonably.It analyzes several assumptions to introduce private capital to promote the competition in national telecom industry. If China telecom will introduce private capital we consider we must do: 1) Telecom basic network must be monopolized relatively, and we must actively push mutual connection and union. 2) We should adequately use the subsistent network resource, and encourage their competition .3) We should reform the regulation system and perfect the market entry rules, on the base, reform price and investment management system, deepen the reformation of national monopoly telecom enterprise, establish the macro base of effective competition.