DLA Piper Intelligence

Telecommunications
Laws of the World

Overview of legal landscape

China
China

The telecoms sector in the People's Republic of China (PRC or China) is highly regulated. 

Under the PRC's regulatory landscape, telecoms business activities are subject to a licensing system, pursuant to which any entity or individual who has not obtained a telecoms operation licence is prohibited from engaging in any type of telecoms business.

Telecoms business activities in China are divided into basic telecom services (BTS) and value-added telecoms services (VATS).

Last modified 25 May 2017
Overview
China

The telecoms sector in the People's Republic of China (PRC or China) is highly regulated. 

Under the PRC's regulatory landscape, telecoms business activities are subject to a licensing system, pursuant to which any entity or individual who has not obtained a telecoms operation licence is prohibited from engaging in any type of telecoms business.

Telecoms business activities in China are divided into basic telecom services (BTS) and value-added telecoms services (VATS).

Last modified 25 May 2017
Laws and regulations

The key telecom regulations in China include: 

Last modified 25 May 2017
Regulatory bodies

The Ministry of Industry and Information Technology (MIIT) is the primary telecoms regulatory body in China.  The main responsibilities of MIIT in respect of the telecoms industry include: 

  • Formulating plans, policies, laws, regulations, and technical criteria for the information and telecoms industry

  • Managing the public information and telecoms network, in addition to the internet

  • Supervising the telecoms and information service market

  • Coordinating with other government departments to formulate policies and standards for the telecoms service fee

  • Allocating and managing radio frequency spectrum resources

  • Overseeing the security of the telecoms network 

The Ministry of Industry and Information Technology

Address:  No. 113 West of Chang An Street, Beijing, 100804, China

Website: www.miit.gov.cn

Last modified 25 May 2017
Regulated activities

Telecoms business activities in China are divided into BTS and VATS.

BTS refers to the business of providing public network infrastructure, public data transmission and basic voice communications services. VATS refers to the telecoms and information services provided through public network infrastructure.

The Telecom Catalogue sets out the detailed types of BTS and VATS. 

Last modified 25 May 2017
Registration / licensing

In general, an entity should obtain a telecoms operation licence in order to engage in telecoms business activities.

Specifically, a BTS operator should obtain a basic telecoms operation licence. A VATS operator covering an area across two or more provinces should obtain a cross-regional value-added telecoms operation licence, whereas a VATS operator covering an area within one province should obtain a value-added telecoms operation licence.

Last modified 25 May 2017
Establishment

An entity is required to have a permanent establishment in China prior to commencing the provision of telecoms services.

In addition, foreign investment in telecoms businesses is subject to shareholding restrictions. 

The amount of equity interest a foreign investor is permitted to hold in a telecoms company is capped at 49% (for BTS) or 50% (for VATS). 

Last modified 25 May 2017
Interconnection/roaming

Under the PRC Telecom Regulation, interconnection of telecoms networks should be effected on the basis of the principles of technical feasibility, economic sense, fairness, impartiality and mutual complementation.

Leading telecoms service operators may not refuse interconnection requests from other telecoms business operators and operators of dedicated networks.

'Leading telecom service operators' refers to operators that control vital telecoms infrastructure, have a relatively large share of the telecoms market and can materially influence the entry of other telecoms business operators into the telecoms business market.

Last modified 25 May 2017
Consumer protection

The PRC Telecom Regulation itself does not differentiate between the provision of services to businesses and consumers. 

However, the provision of services to consumers is subject to the PRC Law on the Protection of Consumer Rights and Interests. 

This law sets out the requirements and obligations for the provision of services to consumers. For example, business operators are required to disclose all information related to the services, and consumers have the right to privacy and to have their personal information protected when receiving a service. 

Last modified 25 May 2017
Taxes and fees

The telecommunications industry is subject to Value Added Tax. The tax rate for BTS is 11% and 6% for VATS.

Besides VAT, the telecommunications industry is subject to an education fee of 3% and a local education surcharge of 2%.

Last modified 25 May 2017
Enforcement

Depending on specific violations, a breach of telecom regulations may be subject to a rectification order, a warning, a fine, the confiscation of illegal gains, the revocation of a telecoms licence, the shutting down of the telecoms business or criminal liabilities.

Last modified 25 May 2017
Contacts
Scott Thiel
Scott Thiel
Partner
T +852 2103 0519
Last modified 25 May 2017