Last year, the State Council formally declared the illegality of the CCF joint ventures. But before the CCF model was written off as another plot against the nascent service provider, subsequent events showed that the State Council, under the leadership of current premier and economic czar Zhu Rongji, had other plans for Unicom. Under plans to beef up China Unicom's competitiveness, the State Council gave Guoxin Paging, China Telecom's paging arm, to Unicom. Guoxin, which is three times the size of Unicom, merged with the second carrier in May following the break-up of China Telecom. Other steps taken to boost Unicom's position have included, among other things, the long awaited blanket interconnection with China Telecom's networks and exclusive rights to run CDMA cellular networks, including the rights to operate Telecom Great Wall's CDMA networks, which used to be partially owned by the People's Liberation Army before the military was told to exit its businesses.
More operators are due to enter the telecoms market.
Other ministries intent on securing operating licenses are the railway and power ministries. China has come a long way since the People's Republic of China was founded in 1949. In 50 years, the number of fixed lines has gone from 300,000 to more than 110 million. But in a country with a population of over 1 billion people, that is only 11 telephone lines for every 100 people. The government still has much more to do, not only to increase the number of telephone lines but also to create more competition in the market place.