Telecommunication costs down 13.6%
, , , , , January 8th, 2008
There was a 13.6% drop in 2007 in overall telecommunication charges in China. Information Industry Minister Wang Xudong said it means the cost have reduced by half in the past five years. He added that ‘a preliminary market-oriented pricing system has been established.’
Which is not encouraging for he did not mention the specific amount or how the cost was calculated.
I am writing this in a hotel in Thailand. Today I have phoned Australia three times, Burma twice and the UK twice and it has cost pocket money. Totally insignificant.
Telephone calls effectively cost the industry nothing omce the infrastructure is in place. Where the money goes is in maintaining large companies to operate systems which simply do not need that much over-structure.
China is a case in point where the telecommunications industry, dominated by several state-owned giants, reaps handsome profits by charging monopolistic prices.
The government has now urged the companies to offer lower pricing packages. But the government owns the companies it is urging. Thus does bureaucracy screw itself up.
Things are changing — but not fast enough.
China Mobile started to offer charge packages that offer free incoming calls in February. Similar packages were also adopted by rival China Unicom.
Price cuts did not bring down the mobile operator profits because the 539 million Chinese mobile users were encouraged to make more phone calls. China Mobile registered RMB37.9 billion net profits (US$5.19 billion ), up 25.7% in the first half.
Fixed-lines are getting less attractive. While 39.9% of the population have a mobile phone, only 28.3% have fixed-lines.
The telecom business volume reached RMB1,680.86 billion, up 27% in the first 11 months last year, and the business revenue amounted to RMB663.92 billion, up 10.9%. With that sort of money coming in it is vital China gets it right, gets it world competitive, makes it totally inexpensive. And, yet, so far it has not even managed to launch 3G which much of the rest of the world has had for several years.
Source: Jongo News
