Guess who's teaching China about telecoms? Only Marconi

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It's been a strange week for China. As it finalised its entry into the World Trade Organisation, it also faced up to what it has to do to qualify – namely liberalise and deregulate its telecoms industry.

To learn how this can be achieved, Chinese government officials visited the UK last week. But one could question their decision to go to Marconi to learn the details.

After all, Marconi is surviving by the skin of its teeth after reporting a £5.1bn half-year loss last week, and straining under £4.3bn of debt.

Meizhuang Zhao, deputy director-general of the department of policy and regulation in the Chinese Ministry of Information Industry, came to London with several of his officials. The trip was organised by Marconi but the officials also visited Oftel, the telecoms regulator, and Patricia Hewitt's Department of Trade and Industry (DTI).

"The primary area of discussion was how we regulate the telecoms industry and how we set up Oftel and how it works," said a DTI spokesperson. "They are looking to learn from the experience of seeing us."

With any luck, at least for those with shareholdings in Chinese telecoms firms, this will mean they will keep an eye on ballooning debt levels, over-pricing and frivolous spending on obscure technologies such as 3G.

Hopefully they will also not allow companies such as Marconi to collapse from a well-respected, valuable company to its current state of staff redundancies, falling sales and management changes.

But Marconi said it was a good place to come for wisdom on how to run the telecoms industry.

"We have customers all over the world who operate in de-regulated market places," said a spokesperson for Marconi.

"Because we work very closely with all of those, we have a better understanding of operator markets and how it varies by country and what works and doesn't work."

Marconi has four offices in China and sells network products over there, so it is in its interests to court the Chinese officials.

China must open up its telecoms markets to foreign interests. Currently it only allows a quarter of a company to be owned by non-Chinese interests but in two years time it must allow 49 per cent of the market to open up.

Major Chinese telecoms companies such as China Telecom, Railcom and Unicom are all majority-owned by the government.

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