What's behind 500m phone users: News analysis

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Last updated at: (Beijing Time) Wednesday, October 29, 2003

What's behind 500m phone users: News analysis

The number of phone users in China had topped 500m by the end of September this year. It is a thumps-up achievement.

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The number of phone users in China had topped 500m by the end of September this year. It is a thumps-up achievement.

First of all, the figure of 500m means China's phone coverage has approximated 40 percent, which is by and large on a par with the world's average. It's a sharp contrast to the coverage of less than one percent at the beginning of the reform and opening-up, far below the world's average. During the past 20 years the development in this aspect is quite remarkable. Given the information era at present, the informationization process would have been limited on paper should there be no such coverage as of 40 percent. It is in this sense that the figure, 500m goes not only beyond its significance but rather an important cornerstone from which the construction of informationization can be stepped up for leading onto the road of a new type of industrialization, thereby making the Chinese economy to soar up.

Secondly, the curve as showing the development of the 500m users indicated a distinct acceleration in recent years. Statistics showed that it took China 110 years to reach 10m phones from the first one in 1882, while it took only six years to rise from 10m in 1992 to 100m in 1998. In the recent three years, we've seen an annual increase of 100m new users. The variation of figures indicates that the Chinese telecommunication industry realized its great acceleration after 1998. And this coincides with the heated-up period of the system reform in telecommunication industry. The intensified reform, ranging from the separation of post from telecom and government function from corporate operation to the introduction of competitive mechanism proceeded in such an aggressive way that any industries could rarely have experienced. Would the serious "surgery" in a short span of 4 years effect some adverse impact on the short-term development of telecom industry even though it is in the interests of its long-term growth? At the initial stage many people were concerned about it. However, the reality now has proved that the fervent telecom reform has in no way slowed down its development. What's more, the industry kept gaining its vitality thanks to the competitive mechanism and more energetic corporate operation. A typical example is the mobile sector. It took the lead to introduce competition in it and has thus grown to be the most vivacious one. After the reform of telecom system, the number of mobile users increased faster than that of fixed phones. Mobiles, which used to be an exclusive means of communication for the rich, have become a tool indispensable for the common folks. Now the number of mobile users stands almost the same as that of fixed users. It can be concluded from the development of the phone users that the reform on telecom system is effective and has scored a great achievement.

Thirdly, due to the fact that the urban population is lower than 400m, the figure of 500m shows that the number of phone users is going up in rural areas. Statistics showed that about 90 percent of the administrative villages in China have phone connections and mobile telecom covers all counties in the country. Undeniably, upgraded telecom condition in rural areas plays an important role in increasing farmer's income and transforming the duel structure of urban-rural economy.

Notwithstanding, while enjoying this 500m we should be clear about one thing i.e. compared with developed countries the phone coverage in China is still lagging behind and unbalanced. For example, the coverage in the western area shows no more than half that of the eastern part and the gap is even wider between the urban and rural areas. There is much room for improvement in service and pricing so as to make the customers feel satisfied. We are convinced that on the basis of holding 500m users, through efforts in telecom industry, China's telecom will keep on its healthy development.

(Economic comments of PD Online and translated by PD Online staff member Lijia)

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