The shares of Chinese telecoms companies listed in Hong Kong surged yesterday on what the industrys regulator and a government researcher called speculative reports about the long-awaited introduction of 3G mobile services.
While Beijing blamed journalists for misreading its telecoms policy signals, the share moves were a sharp reminder of the notorious lack of transparency surrounding regulators plans for the worlds biggest telecoms market by number of subscribers.
Shares in Chinese operators and equipment companies climbed by up to 7 per cent after a government statement about wireless technology was interpreted as a step towards the start of 3G services.
Officials have for years been engaged in heated but secret debate about when and how to issue 3G licences to Chinas state-controlled but internationally listed operators, leaving observers desperate to know their intentions.
So the State Council, Chinas cabinet, attracted attention when it issued an ambiguous statement on Wednesday night saying that it had judged a "new broadband wireless mobile communications network" to be "basically mature and ready for implementation".
But while some media interpreted the statement as referring to 3G, the Ministry for Information Industry, the regulator, on Thursday said it was actually about development of post-3G wireless data technologies.
"For some institutions to seize the chance to cook up the 3G concept is a fundamental misinterpretation," the Sina news website quoted a ministry official as saying.
Speculation surrounding the State Council announcement followed local reports that a research body under the powerful National Development and Reform Commission had offered "strong support" for the break-up of number two mobile operator China Unicom (NYSE:CHU), with its network to be split between the two leading fixed-line operators.
But a senior researcher with the NDRCs Institute of the Economic System and Management condemned suggestions that the report reflected government intentions or policy.
In the absence of greater policy clarity, however, Chinese telecoms stocks are likely to continue to be vulnerable to speculation.
China Telecom, which is the countrys biggest fixed-line operator and seen as likely to benefit most from getting a mobile licence, jumped 6.26 per cent to close at HK$6.28 on Thursday. Smaller fixed-line rival China Netcom (NYSE:CN) rose 3.44 per cent to HK$24.05.
The prospect of stronger competition for dominant wireless operator China Mobile sent its shares down 2.26 per cent to HK$138.6, but Unicom climbed 3.57 per cent to HK$17.98. ZTE, Chinas second largest telecoms provider, was up 7.02 per cent.
