Five years on, China finally issues licenses to first batch of 15 virtual telecom operators

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China’s Ministry of Industry and Information Technology finally has issued the official virtual telecom provider licenses to the first-ever batch of fifteen companies today. Some of the big internet names like Xiaomi, Alibaba and JD are included in the list.

Aiming to open up the telecom market that’s dominated by state-owned telecom carriers of China Mobile, China Unicom, and China Telecom, China allows virtual network operators to lease service capacity like roaming and text messages from conventional operators. The virtual operators do not own network infrastructures themselves and pay traditional carriers a percentage of their revenue as well as fees.

This final announcement comes five years after the authority first introduced the virtual telecoms pilot scheme in May 2013. It issued pilot operation licenses to eleven ‘mobile virtual network operators’, or MVNOs, at the end of 2013 and have gradually increased the number of virtual carriers to 42.

China’s Mobile Virtual Network Operators Suffer As License Deadline Looms

Optimism abounded when the pilot scheme first launched and everyone expects it to be a burgeoning market. But it didn’t happen that way. As of the beginning of this year, virtual telecoms have attracted about 50 million subscribers, take up only 3.5% of the total market.

Some virtual telecom carriers failed to comply with China’s real-name mobile registration system, leaving some virtual telecom services filled with fraudster and scammers. What’s more, it’s still impossible for subscribers to take their number when switching to a virtual telco

Originally, the scheme was expected to be finalized by the end of 2015, but it’s postponed to April this year due to various problems. Given the prolonged pilot scheme and shifting market, the project is gradually losing steam among China’s tech titans.

Here’s a full list of companies that got the license:

  • Suzhou Snail Digital Technology Co., Ltd. (苏州蜗牛数字科技股份有限公司)
  • YuanTel (Beijing) Telecom Technology Co., Ltd. (远特(北京)通信技术有限公司)
  • T.World Telecom Group Co., Ltd. (话机世界通信集团股份有限公司)
  • Shenzhen Youyou Interactive Co., Ltd. (深圳市优友互联有限公司)
  • Beijing Dixintong Telecommunications Services Co., Ltd. (北京迪信通通信服务有限公司)
  • Hongdou Group Co., Ltd. (红豆集团有限公司)
  • Minsheng Telecommunication (Shenzhen) Co., Ltd. (民生通讯(深圳)有限公司)
  • Beijing Funtalk Telecom Technology Co., Ltd. (北京乐语通信科技有限公司)
  • Xiaomi Technology Co., Ltd. (小米科技有限责任公司)
  • Sharing Mobile Group Co., Ltd.(分享通信集团有限公司)
  • Hainan HNA Information Technology Co., Ltd. (海南海航信息技术有限公司)
  • Telling Telecommunication Co., Ltd. (天音通信有限公司)
  • Alibaba Cloud Computing (Beijing) Co., Ltd. (阿里巴巴云计算(北京)有限公司)
  • 263 Telecommunication Co., Ltd. (二六三网络通信股份有限公司)
  • Beijing JD 360 Degree E-commerce Co., Ltd. (北京京东叁佰陆拾度电子商务有限公司)