New Company Ends Shanghai Telecom Monopoly

The long-standing monopoly of the telecommunications sector in Shanghai ended on Saturday after the two years of restructuring efforts.

The Shanghai Post and Telecom Administration Bureau, founded in 1957, used to be the sole player in telecommunications in the city.

The city now has divided the monopoly into four separate entities to handle fix-lined phone service, mobile telecom service, satellite telecom service and paging services.

Shanghai Telecom, the new company, a subsidiary of China's largest telecom carrier China Telecom, will cover fixed-line and Internet-related services.

Cheng Xiyuan, general manager of Shanghai Telecom, said broad-bandwidth telecom services will lead the firm's business strategy to become a competitive player in the global scene within three years.

Broadband services will allow users to surf the Internet, make phone calls and buy goods on line. It will replace the current narrow-band technology which are too slow for many Internet applications.

Local residents anticipate better telecom services at lower cost.

"I felt great. I had to wait almost a year and a half to get a telephone in my house, not to mention the high fees. I got nervous every time I went to pay the bill," said Zhu Chengyi, a local railway worker.

Internet companies are also pleased with the news.

"We have to pay high charges to the telecom provider. It is a big burden. The costs have limited what we can do in terms of improving on-line content and services," said Chen Xiaofeng, founder of a Shanghai lifestyle website.

Cheng agreed that the old system was burden:"Without market-oriented business, it is not only the consumers that feel the pinch, but also telecom carriers that will be hard hit after China's WTO entry brings in foreign competition," he said.

Cheng said Shanghai Telecom will target more research and development of new technology in Internet, interactive and digital services.

The company's efforts will likely be helped by the city's planned cyber port project. The plan aims to increase Internet and telecom sophistication in Shanghai.

The information technology industry, practically nonexistent in Shanghai until 1996, accounted for 6.1 per cent of the city's total GDP of the city last year. It is expected to account for 15 per cent by 2005 to become the city's top pillar industry.





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