China's telecom service charges can be expected to soon drop dramatically and operating licenses are to be auctioned off.
"The telecom price adjustment will soon be announced and most of the service charges will drop by several folds," said Liu Cai, director of Policy and Regulation Department of the Ministry of Information Industry (MII).
Liu said that the Ministry has been working on the adjustment for months. The original plan includes reduction on international long distance call charges, Internet access fees and mobile phone charges. Rumors of cellular one-way charges and an increase of local fixed-line telephone charges have aroused hot debate.
On granting new telecom operating licenses, Liu told that China would adopt public bidding and auction for scarce telecom resources.
"But we will not follow the high-price policy which is popular in Europe," he added. Telecom firms in Europe spent several dozens of billion of U.S. dollars for each 3G (third generation) license.
"China has the best telecom network but the industry has suffered backlash of low quality services. Competition is the only treatment to cure the disease," according to Liu's saying.
China has broken the monopoly in the telecom industry by forming six basic telecom business operators and 3,000 value-added telecom business companies.
A railway-based China Railway Telecom is soon to be launched as the seventh player in ground communications.
"The government has realized that only a fair, open, competitive environment could nurture the rapid growth of an industry," Liu said.
China promulgated in September its first telecom regulation which boosted prospects for both overseas and domestic telecom firms.
"The regulation clearly shows our commitment to competition," Liu said.
(China Daily 11/20/2000)
