EU-China Value Added Services Seminar
Yesterday took place an event called ‘EU-China VAS Seminar‘, organized and attended by representatives from government and businesses on both EU (European Commission, European telcos, etc.) and China side (MII, CATR, China Telecom, etc.).
We were invited as ‘international expert’ to provide insights and comparisons of the Internet and mobile VAS situation in advanced market, with a focus on Japan, Korea and Europe.
Sitting on the EU side, we could not benefit from the wind from the open windows occupied by the Chinese delegates in that very warm day (but enjoyed the view from the 11th floor).
The discussions touched items such as WTO vs. MII list of VAS, national treatment and other interesting regulations such as pre-approval processes for Internet and mobile VAS, and capital requirements.
We left with the impression that:
(1) The main reason why foreign VAS providers do not enter the market might actually not be MII regulations but rather operators’ content policies – effectively acting as secondary regulators
(2) Another reason could be that foreign companies are largely risk-averse (especially when they are publicly listed) and do not want to face any political or business risk, especially when the limit between those two is not clear. Chinese companies and entrepreneurs do not deal with risk the same way.
As an add-on, the day before at the Boao Forum for Asia, the Vice-Minister of MII reminded that 22,000 licenses for VAS had already been awarded and that the market was open to foreign players with up to 49% equity in VAS companies.
Last, we were granted a Chinese translation of our corporate motto by one of the MII senior representatives – which in itself was worth the day! The Chinese version goes by ‘他山之石，可以攻玉‘ (‘By other’s faults, wise men correct their own.’ or ‘One can remedy one’s own defects by accepting another’s good suggestions.’ which is closer to the IDEO quote — we found later some less popular alternatives with ‘可以攻错’ or ‘可以为错’).
Benjamin & Yiqun