China's Telecom Fees Decreased by 13.6%

Tuesday, 08 April 2008

The government intervention in the Chinese telecom industry is yielding results by propelling the telecoms industry towards the peak and reducing telecoms fess and roaming charges.   The result of Chinese government’s stringent control on telecom prices is 13.6% year-on-year reduction in the telecom fees, announced the Ministry of Information Industry (MII) on February 27, 2008 at this year’s annual meeting of telecom services, according to the news published by Chinaknowledge. As per the MII, currently, China possesses 900 Million telecom consumers, out of which, 366 Million have fixed-line phones and 547 Million are mobile phone users. Therefore, keeping this quick growth in the number of telecom subscribers and profit made by the telecom sector in viewpoint, government has taken such steps. Because of the government steps, consumers can subscribe for the telecom services easily in the country. In early February 2008 too, the mobile roaming service charges were decreased in the range of 54% and 73% according to locality. The government initiatives to lessen the telecommunications fees are bringing results and the frequency of users complaining about too high charges levied by telecom giants may decrease soon. Moreover, the Chinese telecom market has observed extraordinary growth because of essential economic and industry restructuring of the Chinese government. The reasons include the speedy telecoms industry development in last decade along with entirely transformed competitive setting of the Chinese carriers market. Besides, population of educated people and business professionals are increasing which, in turn, is supporting growth in the Chinese telecom industry. According to Shi Wei, Director of Economic System and Management Research Institute under the National Development and Reform Commission, China has also worked out the reform plan of the telecoms industry. China Unicom is going to branch out its CDMA network to China Telecom and integrate with China Netcom to drive GSM network. Also, China Tietong and China Mobile will be merged. As per a Research Analyst at RNCOS, “Chinese telecoms industry is all set to grow high. The favorable business conditions along with the government support are surging the telecoms industry to its highest level. Therefore, the Chinese government should continue restructuring, benchmarking market-oriented price by the government’s macro-control. China telecoms industry must also form a competent and fair price supervision means across the industry.”

 

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