Governance Structure, Corporate Strategy and the Imbalanced Market Structure of China’s Telecommunications Industry: The Paradox of Competition

After a series of reform and restructuring that aimed to construct balanced market competition since the mid 1990s, China’s telecommunications industry had not developed in the expected way. The market structure remained unbalanced with China Mobile’s dominance. This article attempts to investigate the reasons behind the imbalanced market structure of China’s telecom industry from the perspectives of interactive corporate strategies, structure of intercorporate relationship, and government regulation and institution. It takes into consideration that the reform of China’s telecom industry resulted in a unique tripartite regulatory structure. Thus telecom operators, to some extent, are free to select their own strategy. At the same time, a special intercorporate relationship gradually formed during restructuring. China Mobile simply took advantage of this special regulatory framework and structural relationship by adopting different corporate strategies, and gained dominance in China’s telecom market.