(Yicai Global) Sept. 7 -- Dr. Peng Telecom & Media Group, the parent company of Great Wall Broadband Network Service, once China’s biggest private broadband services provider, sold the unit and three others to Zhong’an Industrial Investment Shenzhen for CNY1 million (USD146,340) following years of losses.

Dr. Peng Telecom will only retain internet access services in Beijing, Shanghai and Shenzhen after the sale, the Chengdu-based company said in a statement on Sept. 4.

Dr. Peng Telecom said that in recent years, as competition in the internet access market has intensified, the sector’s income per user has continued to decline, while profit margins on home broadband services have narrowed. The sale will reduce the adverse impact of the loss-making businesses on the company’s performance and long-term development, it said.

Last year, Great Wall Broadband lost CNY2.6 billion (USD386.3 million), showing a negative net worth of CNY170 million in the first half of the year, with a debt ratio of more than 97 percent. Dr. Peng, had more than 10 million users by the end of last year.

Zhong’an Industrial said it was mainly optimistic about the future advantages of Great Wall Broadband in community and home services. After the acquisition, Great Wall’s team and services will be unchanged as it builds operation sites offering comprehensive services in communities, while improving the quality of its broadband services.

Beijing-based Great Wall Broadband was founded in 2000, and from 2010 to 2012, Dr. Peng spent a total of CNY1.7 billion (USD248.8 million) to acquire all of the company. From 2013 to 2017, Great Wall Broadband became China’s largest private broadband network operator via a low-price strategy.

But Great Wall was merely a second-tier operator in the sector, which means it was unable to build inter-city networks, creating only large local area networks similar to being a distributor of the three state-owned telecoms operators’ networks to users in the community. Many users complained about slow network speed and lack of stability, adding that Great Wall’s only advantage was price.

Demand for online traffic and bandwidth surged amid the Covid-19 pandemic this year because of demand for online entertainment, telecommuting and education, an executive with Dr. Peng explained, adding that Great Wall’s networks would have had issues like high latency and lack of internet access during peak periods.

Editor: Peter Thomas