Shi Wei, an expert with the Institute of Economic System and Management under China's top economic planner, said that private firms participating in the program must strive to make innovations in their services, or else they will become just agents for major carriers.

"Private companies should develop more innovative applications and provide differentiated services to win their share of the market," Shi said.

Li also said that private enterprises have ample room for innovations and can provide diversified services of their own.

"Private enterprises in the reselling business and major mobile carriers are not only cooperation partners but also competitors," Li said.

The pilot program is designed to last for two years.

Private enterprises can send applications to telecom authorities within the first year of the program.

China has attached great significance to encouraging private investment, as it plays an important role in creating jobs, boosting domestic consumption and maintaining sustainable economic growth.

In 2010, China's State Council, or the Cabinet, announced policies to open a range of government-run industries to private investment, including water projects, power generation, mining, as well as the telecommunication sector.

To help implement those policies, the MIIT made a detailed plan for guiding private capital to enter the telecom industry in June 2012.

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