China's two major fixed-line telephone operators have signed an agreement to confine each other to their major geographical market to limit competition.

China Telecom -- which operates in central and southern China -- and China Netcom which is based in the northern region, were split off from the former nationwide monopoly China Telecom to spur competition in the sector. In January, China Netcom sold its assets in Guangdong and Shanghai municipality to its parent company for 3.5 billion yuan (437.5 million U.S. dollars), a sign that China Netcom was withdrawing from the southern market.

The agreement will help the two fixed-line operators counter cellular operators, as some customers -- encouraged by caller-pay schemes introduced by China Mobile -- switch entirely to cellular.

Under the new China Mobile charging scheme, subscribers who buy monthly prepaid fee packages no longer pay for receiving calls, just like fixed-line users.

Source:佚名