On December 25, 2015, the Ministry of Industry and Information Technology promulgated the 2015 Catalogue of Telecommunications Services (the “Catalogue”), which will go into effect on March 1, 2016. Since the first version of the Catalogue was promulgated as a schedule to the Telecommunications Regulations of the People’s Republic of China (the “Regulations”) in September 2000, this represents the third revision of the Catalog by the Ministry of Industry and Information Technology (previously the Ministry of Information Industry), 12 years after the previous revision in 2003. Since the telecommunications development environment and business patterns have changed significantly, the scale of these adjustments is also quite substantial.
Under the Regulations, the state implements a licensing system for the operation of telecommunications business; the licensing system is categorized as basic telecommunications business and value-added telecommunications business. This basic classification framework will not be changed under the new amendment. Basic telecommunications businesses will still be further divided into Type I telecommunications businesses and Type II telecommunications businesses. In addition, provisions relating to IP telephone, cellular mobile communications business, satellite communications business, Internet data transmission business, and internet access facility service business are also adjusted and refined. Value-added telecommunications businesses will also maintain its two subcategories with specific details about the component business.
In the value-added telecommunications business, Type I value-added telecommunications businesses are based on facilities and resources, while Type II value-added telecommunications businesses are based on public application platforms. Basically, to encourage small and medium businesses to participate, compete and promote growth, there is a loosening of policy regarding entry barriers to Type II value-added businesses, such as online data processing and transaction handling business, call center business, and information service business, while the requirements for information security management are more stringent for Type I value-added telecommunications business such as data centers, contents delivery, virtual private networks, and Internet access services, which are closely linked to infrastructure and telecommunications resources and have major impact on the information security and social order of the state.
As for the IP telephone business, which has received more public focus, the Catalogue defines it as a telephony business jointly provided by fixed networks or mobile networks and the Internet, thereby separating it from fixed communications business as an independent item under Type I basic telecommunications businesses. However, stricter entry barriers are still maintained, and operators are required to own a communications facility service business. It is also required that those who provide IP telephone services shall do so via only the international communications gateways established with the central government’s approval. Telephony business exclusively provided by the Internet is considered “real-time interactive information services” under Type II value-added information service business and is deregulated and open to private operation.
The “information service business” in the value-added telecommunications business is currently the most active area. The categorization by the Internet technology involved as used in the 2003 Catalogue (information services provided via fixed networks, mobile networks or the Internet were separately required to obtain a fixed network license, SP license and ICP license respectively) is no longer compatible with the actual market development (for example, information transmission may simultaneously go through mobile networks (such as 3G/4G networks) and the Internet). Therefore, this revision uses the nature of the service provided and technical features (such as the organization and transmission of information services) into five business subcategories:
(1) Information posting platforms and delivery services, such as news sites, electronic bulletin boards, mobile clients, mobile news, and application stores.
(2) Information search and query services, such as search engines.
(3) Information community services, such as social media, blogging, podcasting, Weibo, chat rooms and online gaming.
(4) Real-time interactive information services, such as instant messaging, interactive voice services, and Internet-based peer-to-peer bidirectional real-time voice services.
(5) Information protection and processing services, such as spam interception.
Operators who merely provide information services via mobile apps will be asked to apply for the corresponding telecommunications licenses for the relevant categor(ies) above after the 2015 Catalogue becomes effective.
With the rapid development of call center businesses, offshore call center businesses have gradually become a very important component of offshore outsourcing. The Catalogue also subdivides “call center businesses” into “onshore call center businesses” and “offshore call center businesses” to better accommodate internal and external deregulation needs.
Starting from March 1, 2016, the Ministry of Industry and Information Technology will review telecommunications business license applications pursuant to the 2015 Catalogue. The previously issued telecommunications business licenses will still remain valid within the original scope and term of license. Within the term of an original license, if the enterprise needs to amend the license, it may apply for the issuing of a new telecommunications business license.