In 1999, in a first step towards creating a new regulatory and competitive environment, the government divided China Telecom into four entities covering fixed line operations (China Telecom), mobile (China Mobile), satellite (China Satellite Communications Corp) and paging services (folded into China Unicom). With China's entry into the WTO will come a commitment to open any major telecommunications company to up to 50% foreign investment by 2006. However, current foreign investment is low and funding is largely dependant on relatively scarce internal sources. The primary decider on what happens next will be the degree of competition and level of foreign investment, which enters the sector. The most likely outcome is that China Telecom will be further divided into six regional operators and a couple of other major new entrants competing in a range of business and residential segments. On the value added services side , it is likely that the market will see the adoption of new standards and the possibility of foreign players investing up to 49% in local operators after one year. This will lead to the introduction of multiple players in the cellular, internet service provider ISP, internet service re-seller ISR, internet phone I-Phone, paging and broad band areas.
