China Railcom Group Co Ltd (China Railcom) should speed up its adjustment and reform practices to secure a firm foothold in the country's fierce telecommunications market, after its separation from the Ministry of Railways (MOR), insiders say.

"Interior integration and resources readjustment are crucial for China Railcom to become competitive," stressed Chen Jinqiao, director of the China Academy of Telecommunications Research under the Ministry of Information Industry (MII).

Chen believes the split from the MOR last month offered a golden opportunity for China Railcom to become much more market-oriented.

According to a statement from the State Council, China Railcom, formerly China Railway Communications Co Ltd under the MOR, has been operating under the regulation of the State Assets Regulatory and Management Commission since January 20.

With the separation, China Railcom now directly competes with five other major telecom operators including China Telecom, China Netcom, China Mobile, China Unicom and China Satcom.

Analysts believe that China Railcom's transfer to the commission will help the MII better supervise the operation of China's telecommunications industry.

"We are busy with the registration work, designing our new logo as well as working out our development plan," said an official with China Railcom who declined to be named.

According to the official, China Railcom is due to be officially inaugurated at the end of February or early in March.

China Railcom is aiming to become a strong telecom operator in the coming three to five years.

Taking advantage of its railway networks, Railcom has worked intensively in rural areas to recruit more fixed-line telephone users.

However, due to fiercer telecommunications competition mainly brought by the split of the former China Telecom, Railcom now has to rely heavily on the networks built by the Ministry of Railways.

Insiders have pointed out that further restructuring of China Railcom will help the company to lure more investment as it moves a step closer to going public.

(China Daily February 9, 2004)