Network Competition: The Opening and Reform of China's Telecommunications Industry

Author: Zhou Qiren
Publisher:
Publish Date: 2001-08-01
Features: In 1998, AT&T announced its merger with TCI, the second-largest cable TV company in the United States, with a total transaction value of $48 billion. Why did AT&T specifically choose to acquire TCI, a cable TV company that seemed completely unrelated at the time? Comparing international experiences, how will the opening and reform of China's telecommunications industry unfold? Read this book for an explanation on the competition among digital networks. Being regarded as an expert on China's telecommunications issues was an unexpected accident for me. In the summer of 1998, I had the opportunity to attend a training program on infrastructure financing at the World Bank headquarters. At the time, the Peking University course ended quite late, so by the time I arrived at the program location, the University of Maryland in Maryland, USA, on June 21, the training had already been going on for a full week. Due to my late arrival, I didn’t really get into the content of the training. To my surprise, two days later, a major event in the U.S. telecommunications industry allowed me to catch up. On June 24, major global media almost exclusively covered on the front pages of their financial sections that AT&T announced its merger with TCI, the second-largest cable TV company in the United States, with a total transaction value of $48 billion. Mergers and acquisitions are not new in the United States. Between 1989 and 1996, when I studied in the U.S., I learned that mergers and splits were almost part of the daily life of American businesses, and I had long become accustomed to them. However, AT&T’s merger with TCI was still an eye-catching news. Everyone knew that AT&T was the leader in the U.S. telecommunications industry. In 1997, AT&T had 70 million long-distance users, 4 million wireless users, 1.1 million dial-up users, 15 million business users, and owned teleport local networks in 250 cities across the United States, with a total annual revenue of $51.32 billion. Such a global telecommunications giant, if it were to acquire any other...