Alibaba poised to offer telecom services in China

The e-commerce giant's subsidiary has been awarded a MVNO license by the Chinese government

Chinese e-commerce giant Alibaba Group is set to diversify into telecom services, having bagged a license from the Chinese government.

HiChina, a subsidiary of Alibaba, received a MVNO (mobile virtual network operator) license from China's Ministry of Industry and Information Technology, a spokeswoman from Alibaba said via email on Friday.

Alibaba is not providing further details at this point, she added.

The ministry said Thursday it had issued licenses to 11 private companies in a bid to get greater private sector involvement in the telecom sector and stimulate competition.

Under the MVNO program, the new operators will resell services from China's three state-owned operators - China Mobile, China Telecom and China Unicom.

The government this month issued 4G licenses to operate LTE TDD (Long-Term Evolution Time Division Duplex) networks in the country to the three operators.

The market opportunity for Alibaba and the other new players could be large if they are able to get the right terms from the incumbent operators. China accounted for 1.2 billion out of a global total of 6.6 billion mobile subscriptions at the end of September, according to a report by Ericsson. The country added 30 million new subscriptions in the third quarter.

Alibaba has been promoting to handset makers in China its own Linux-based mobile operating system, which could get a boost from the group itself offering mobile services. The company could also use its MVNO service to promote some of its e-commerce services and applications.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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