On May 16, 2002 (April 5, 2002 in the lunar calendar), China Telecom and China Netcom were officially established. Approved by the State Council, the China Telecom group company and China Network Communication group company, which have attracted much attention from the society, were officially announced on May 16, 2002 after reorganization. Wu Bangguo, a member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, sent a letter of congratulations. Wu Bangguo said in the letter that since the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China, our country's telecommunications industry has made remarkable achievements and played a strong role in promoting economic and social development. He pointed out that the establishment of the China Telecom group company and the China Network Communication group company is a major measure to deepen the reform of the telecommunications system, further introduce the competition mechanism, and promote the development of the telecommunications industry in our country. It is of far-reaching significance for improving the socialist market economic system and promoting the informatization of the national economy and society. Wu Bangguo hopes that the two group companies will take this reorganization as an opportunity to seize the historical opportunity of the country's implementation of the "informatization-driven industrialization" strategy, speed up the establishment of a modern enterprise system, improve the management level and operational efficiency of enterprises, and strive to provide high-quality and efficient information and communication services for the broad masses of the people, and make new and greater contributions to the national economy and socialist modernization. The newly formed China Telecom group company is composed of the former China Telecom South 21 provinces, autonomous regions and municipalities in accordance with the national telecommunications reform plan, with a registered capital of 158 billion yuan and 70% of the number of optical fibers and communication channels in the country. The newly formed China Netcom group company is composed of the former China Telecom North 10 provinces and municipalities Telecom Company and the former China Netcom Company and China Jitong Company, with a registered capital of 60 billion yuan and 30% of the number of optical fibers and communication channels in the country. In this way, both parties have a complete long-distance trunk transmission network covering the whole country, thus forming two full-coverage trunk transmission networks across the country. Moreover, since both companies have local telephone networks in their respective regions, and both have the right to operate local telephone, long-distance telephone, international telephone and international Internet services, and both companies can conduct business nationwide, it is conducive to the formation of an effective competition situation. After this reorganization, the pattern of our country's telecommunications industry has undergone new changes, forming a pattern in which six basic telecommunications companies, China Telecom, China Netcom, China Mobile, China Unicom, China Satellite and China Mobile Tietong, and more than 4,000 value-added telecommunications and wireless paging companies compete with each other. The proportion of the six major companies has also changed significantly. The proportion of China's telecommunications business revenue, which used to be absolutely dominant, dropped from more than 50% in the past to 33.8%, ranking second, and China Mobile jumped to the top with 36.6%.