Xiaomi, Youku, and more get virtual telecom operator licenses, but can they right the ship?

According to Techweb, China’s Ministry of Industry and Information Technology (MIIT) has issued its fourth round of virtual telecom operator licenses. The licenses grant companies the right to operate a “virtual” telecom company, charging their own fees and offering their own plans but leasing their network from one of China’s three state-owned telecom companies (China Telecom, China Mobile, and China Unicom). The latest list of companies issued licenses includes Xiaomi, Youku-Tudou, and Haier.

How much any of these companies will be able to do with these licenses remains to be seen, though. The trial program for virtual operators in China began earlier this year, and thus far the results are unimpressive. As of September of this year, virtual telecom operators had attracted just 400,000 subscribers, many of whom are telecom industry insiders. Among regular people, virtual telecom subscribers are virtually (no pun intended) unheard of. Don’t expect these licenses to lead to a windfall for any of the companies listed.

With that said, the industry is probably still worth keeping an eye on now that Xiaomi has been issued a license. It is not the first mobile company to be granted entrance to the virtual telecom scene, but it is by far the hottest, and the company has for years been demonstrating its impressive marketing skills. A virtual telecom plan that was packaged in some way with Xiaomi hardware might be just what the industry needs to get back on track.

This fourth round of licenses is likely the last that MIIT will issue, so this is probably it. Looking at the full list of companies granted licenses, which includes banks and media companies in addition to a number of tech companies, Xiaomi seems like the best hope for the virtual telecom industry in China. But whether China’s hottest handset maker has the clout to right the ship and get Chinese consumers excited about virtual telecom operators is anyone’s guess.

See: Xiaomi considering a smartwatch, asks fans what they want

(Source: Techweb)