China to improve Internet speed, cut fees

The State Council, China's cabinet, on Wednesday pledged faster broadband and lower prices for Internet services, a common concern in China.

China will accelerate construction of a high-speed network with lower charges, support "Internet Plus" and foster new growth impetus, according to a statement released after a State Council executive meeting presided over by Premier Li Keqiang.

Telecom companies should publish detailed plans to increase speeds by over 40 percent, reduce prices and offer free upgrades to existing customers. Stricter monitoring of broadband services and charges will protect consumers.

Optical and broadband networks will be expanded in the countryside to improve access in 14,000 villages by the end of this year. Greater bandwidth is needed to help the country connect with the world more easily and attract investment, the statement said.

This is not the first time the premier has called for faster speed and cheaper prices.

On April 14, Li brought up the issue at a symposium, saying current charges are too high to promote top-end telecom technology and satisfy the need for modern communication. China's broadband is only ranked 80th in the world, leaving a huge space for improvement, Li said, while demanding that work to solve the problem begin as soon as possible.

The move will not only benefit consumers, but cut costs for Internet businesses, stimulating start-ups and investment.

Zeng Tao, a telecom analyst, said there should be different standards for regulating the service speed and prices for wired and mobile broadband, considering the distinct gaps between their construction investment, maintenance and service characteristics.

An open market, fair competition and more financial support will help upgrades in rural areas and expand pilot broadband access to over 100 enterprises by the year end.

"Three telecom giants are not enough competition and are a direct cause of current high charges for unsatisfactory services," said Ning Jiajun, director of the Experts Committee of the State Information Center.

He said policy incentives for more private will be necessary to open up the telecom market and fuel information consumption.

"Removing institutional obstacles and giving full play to market are the only ways to protect consumers and push forward the 'Internet Plus' strategy," he added.

The premier also mentioned the speed-price issue when unveiling the "Internet Plus" plan in March.

"Internet Plus" is the integration of the Internet and traditional industries through online platforms and technology, expected to serve as another new engine for future growth.

China Telecom on Wednesday published a white paper on "Internet Plus", describing plans to invest 80 billion yuan each year to establish a industrial circle for the strategy.

The State Council also agreed to promote public-private-partnerships (PPP) in transportation, environmental protection, medical care and pensions.

PPPs will optimize public capital selection through fair competition among state-owned and private enterprises, increase the supply of public products and services, change government's role and fuel new growth.

The meeting demanded red tape be cut and encouraged local government and financial institutions to establish funds making full use of tax breaks, financial incentives and transfer payment.

China encourages social security and insurance funds to be involved in public products and services, the statement said.

A mechanism to adjust price and availability of public services will be established.

The meeting decided to expand the pilot securitization of credit assets by 500 billion yuan (81.8 billion U.S. dollars).

Li urged pilot banks to contribute to refurbishing rundown housing, water projects and extending railways in central and west China.

The meeting also announced better supervision of local authorities to streamline administrative approval, which has become a highlight of central government work.

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