Telecom leadership changes trigger reform speculation

China's Cabinet appointed new heads for the Big Three telecommunication carriers on Monday, triggering speculation that long-awaited reform of the sector may be on the way.

Shang Bing, former vice-minister of telecom watchdog the Ministry of Industry and Information Technology, took over China Mobile Ltd, while Xi Guohua, its former head, is retiring, the company said.

The smaller China Telecom Corp Ltd and China Unicom Ltd, saw their chairmen - Wang Xiaochu and Chang Xiaobing - swap places, according to the companies.

Leaders of the Big Three telecom firms, in which the government owns majority stakes, are appointed by the State Council. It is the first time in 11 years that the heads of the three companies have changed at the same time.

The appointments come as revenue at the telecom giants has slumped. The companies attribute the declines to tax policy changes and loss of users in voice and short-messaging services.

The new chairmen have yet to announce if there will be strategy changes after the transition.

Milly Xiang, a telecom analyst at research firm IDC, said the changes may signal the start of consolidation in the industry.

Linus Yip Sheung-chi, chief strategist at First Shanghai Securities in Hong Kong, said: "The management changes may foster long-term restructuring in the mainland telecom market. This can promote better management practices in the industry by rotating the leaders in different telecom companies."

Last week, speculation arose that the government may introduce a merger plan for China Telecom and China Unicom to increase competitiveness. However, the State Council did not announce such a plan.

Some reforms are already underway. The companies have split their infrastructure construction subsidiaries to form a new company to serve all. The next focus is to provide higher-quality services.

Earlier this year, Premier Li Keqiang criticized China's slow Internet speed and traffic charge. The carriers later announced plans to cut service fees by about a third.

But deeper-rooted issues have still to be addressed, including the further opening up of the telecom market to private capital.

Zeng Jianqiu, a professor at Beijing University of Posts and Telecommunications, said the authorities have to push reforms when carriers are facing growing pressure from privately owned mobile Internet companies.

Contact the writers through gaoyuan@chinadaily.com.cn