"Virtual network operators do not own their own networks. They rent infrastructure resources from telecom operators."

A number of companies, including Internet firms such as Tencent Holdings Ltd and mobile device manufacturers like Huawei Technologies Co Ltd, may join in the pilot project to optimize their services and grab a bigger slice of the market.

"I expect the Chinese government to officially issue virtual network operator licenses by June this year," Ji said.

In developed economies such as the United States and Japan, virtual network operators have legally existed for a long time. Their participation diversifies products and services, and helps lower customers' costs.

Chen Min, a telecom industry observer based in Beijing, said if private companies enter the telecom industry as virtual network operators, the telecom monopoly might start disappearing. "Telecom operators' current businesses may be under pressure, but on the other hand, emerging virtual network operators may also introduce new revenues to them," she said.

Li Yizhong, a former minister of industry and information technology, said last year the opening of China's basic telecom service market is an inevitable trend, but the government should complete the task step by step.

High-level management at China Mobile and China Unicom have previously told China Daily they welcome competition and will fulfill their responsibilities to create an open industry.

Zhang Feng, head of the communication development division of the Ministry of Industry and Information Technology, said China will open the telecom market, including allowing private capital into the areas with the most rapid growth rate, Web portal Netease reported.

shenjingting@chinadaily.com.cn

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