Photo: VCG

There will be more cooperation than competition between UK telecommunications giant British Telecom (BT) and major telecom operators in the Chinese mainland, experts said, after the company was licensed to carry out certain telecom businesses in China. 

They made the comments after BT became the first overseas company to obtain nationwide licenses from the Chinese government, triggering some speculation on the internet as to whether BT would challenge the dominance of China's major State-owned telecom operators like China Mobile. 

BT announced on Thursday local time that the company obtained two licenses: the China nationwide Domestic IP-VPN license and China nationwide Internet Service Provider (ISP) license from the Chinese government. 

The two licenses would allow BT China Communications to contract directly with its customers and bill them in local currency, according to a statement released by BT on Thursday. 

The Global Times contacted BT China Communications, based in Shanghai, and was told that the company wouldn't give interviews to the media. 

On data search platform tianyancha.com, it is shown that BT Hong Kong holds 50 percent of the company's equity.

Experts have noted that granting the licenses is a big step in opening up as in the past the government only issued regional licenses for overseas telecom operators, which sometimes made doing business difficult for overseas companies whose businesses cover multiple regions in China. 

According to Xiang Ligang, a Beijing-based independent tech commentator, the national virtual private network and ISP licenses would allow BT to provide VPN services and broadband access services for its customers nationwide. 

"Without those licenses, overseas companies like BT are legally forbidden to carry out those businesses in China. Some of them might still tap into those businesses by working with an intermediary agent, a domestic company that holds those telecom licenses, which is not convenient for them," Xiang said.

"BT has strengths in providing global telecommunication service, and its service could be favored by multinationals operating in China and Chinese companies conducting a global business," said Ma Jihua, an independent industry observer based in Beijing.

"And the business segment that serves companies yield higher margin for telecom operators and BT could potentially carve out a market share from the incumbent service providers including China's big three telecom operators and some smaller companies that provide the service," Ma told the Global Times Tuesday. "But the overall impact for now won't be too much."

Xiang also noted that although BT does not have the capability to build a broadband network in China and has to cooperate with major domestic telecom giants, multinational company customers in China may value BT's reputation as a global telecom giant as well as some of its services.