In early July 2025, mounting discontent within China’s broadband infrastructure sector burst into open protest, as telecom contractors across Henan Province converged to voice opposition against a sweeping policy overhaul by the Henan Branch of China Telecom, commonly referred to as Henan Telecom. The demonstrators, numbering in the hundreds, gathered in Jang Joe, signalling what some analysts have described as a rare act of defiance against exploitative practices embedded in state-affiliated contract systems.

While exact figures remain hard to verify due to the dispersed nature of the protest, estimates suggest between 300 and 400 contractors were visibly present, with indications that total turnout could have surpassed 1,000. Slogans condemning “telecom fraud” reportedly echoed across the scene, hinting at profound frustration beneath the surface. Within hours, the gathering was forcefully contained by local authorities, leading to physical scuffles, injuries, and multiple detentions.

At the heart of the controversy lies a structural transition initiated by Henan Telecom: the unilateral cancellation of existing cooperation agreements, replaced with a so-called “store package for district and township” contract. This new model, framed as a strategy to consolidate service delivery and standardize performance benchmarks, has been widely criticized by those affected as punitive, unilateral, and financially ruinous.

Under the previous arrangement implemented widely across Henan in the mid-2010s, local contractors were enlisted to build out telecommunications infrastructure, including network cabling, connectivity coordination, equipment installation, and long-term maintenance. China Telecom provided only signal resources, leaving contractors to bear operational and financial risk. In some cases, initial profit-sharing arrangements offered reasonable margins, but these deteriorated over time. Agency fees per user reportedly plummeted from sustainable figures to just a fraction of their original value, leaving contractors unable to recover substantial upfront investments.

For many, the business model became unsustainable. Independent operators, often working without staff due to constrained finances, found themselves in roles demanding intensive manual labour for meagre returns. Despite these challenges, contractors remained tethered to their networks, gradually building user bases and maintaining service reliability under trying conditions. It was this accumulated infrastructure, largely financed and managed by private contractors that drew alarm when the updated contract terms threatened their autonomy and assets.

The revised “store package” framework imposes stringent performance conditions and introduces new financial liabilities. Contractors are now required to staff three-person teams for installation and repairs, maintain township-level network assets, and construct service centres at their own expense. These obligations come with aggressive performance quotas: falling below 1,000-point monthly benchmark triggers reduced maintenance fees, while declining broadband subscriptions for three consecutive months can result in contract termination and forfeiture of future compensation.

Such revisions have been interpreted by many in the sector as a calculated attempt to nationalize private investments. Contractors allege that Henan Telecom seeks to reclaim and centralize control over fully operational broadband networks built through years of individual labour and funding. As profits shrank, investments remained unrecovered, with some operators reportedly injecting millions into infrastructure that now risks confiscation under the new policy. These developments have raised broader concerns over how state-owned enterprises in China leverage policy shifts to absorb privately developed assets without due compensation.

Behind the scenes, sources close to affected contractors suggest that the contract shift may not have originated with the Henan Telecom branch alone. Speculation abounds that higher-level directives possibly linked to larger policy manoeuvres aimed at consolidating rural digital infrastructuremay have influenced the abrupt transition. Attempts to contact the company for clarification have gone unanswered, fuelling further mistrust.

This episode highlights the growing tension between entrepreneurial labour and institutional control within China’s evolving tech and infrastructure landscape. While the state’s push for broader broadband penetration aligns with national objectives, its implementation, particularly through abrupt contract restructuring, raises uncomfortable questions about fairness, accountability, and equitable development.

Analysts argue that the Henan protests may mark a turning point in contractor-state relations, challenging traditional assumptions about labour compliance and state control. With increasing scrutiny from both domestic observers and international rights monitors, such demonstrations may herald broader demands for transparency, renegotiation, and recognition of privately initiated contributions to China's digital expansion.

Though suppressed swiftly, the unrest serves as a powerful reminder of the simmering unease that can emerge when economic policy is wielded without regard for those whose sweat and capital have built the very infrastructure being reclaimed. As contractors seek remedies and redress, China Telecom and its provincial branches may face growing pressure to re-examine the ethical and legal contours of their contractual engagements.