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Monday, November 27, 2000, updated at 10:38(GMT+8)

Official Refutes Immediate Adjustment of Mobile Fees

Telecom service charges, ranging from mobile phone communications, Internet accession and fixed-line communications, are to witness sharp adjustments at the end of this year, insiders say.

It's widely rumoured that the current dual-way charging of mobile phone communications will be changed to one-way alone.

Some local newspapers reported that the proposal of one-way charges, 0.4 yuan (5 US cents) per minute for mobile communications, has been submitted to the State Planning Development Commission (SPDC), the country's pricing watchdog.

However, a spokesman of the Ministry of Information Industry (MII) refuted the rumors, saying that the final adjustment proposal has not yet been hammered out.

"The final result, whether one-way charge or not, will come out soon," said the spokesman.

Insiders said the two-way charges of mobile communications will most likely be replaced by one-way fee collection, but the price margin per minute would probably increase.

China's mobile phone subscribers have seen double-digit annual growth in the last three years, reaching 65 million by September this year.

Following rapid expansion of the mobile phone user pool, consumer complaints about the two-way charging also rose.

Moreover, telecom service operators have taken advantage of policy woes to attract more subscribers with discounts.

The price wars between China Mobile and China Unicom, the country's only two mobile communications operators, have been continuous.

"Generally, competition is allowed in every industry, but we must keep a regulated market climate to ensure fair competition," said an official with the MII's telecom administration bureau.

But, the official said service charges, especially mobile fees, should maintain a certain level because of the huge investment of network infrastructure.

"Expansion of the user pool should consider the related costs, otherwise, it will backfire eventually," he said.

Compared with the mammoth China Mobile, pricing adjustment is a key element for the infant China Unicom to secure a certain market share.

"If we have no right to take price as a market bonus, we can hardly survive in the future," said a China Unicom official.

Charge adjustments are not limited to mobile phone communications.

Insiders said the charges of fixed-line communications would be increased and Internet accession would be decreased.

China Telecom, the country's biggest fixed-line operator, has held two rounds of hearings on the price-increase proposal for local fixed-line communications.

Although consumer representatives and some social experts have strongly opposed the move, the price hike is unavoidable said the company.

Officials from China Telecom said the hike would not surpass the acceptance level of mass consumers.

The charges of Internet access has experienced several adjustments in the past two years.

Increasing competition among Internet service providers (ISPs) contributed most to the downturn of Internet charges.

The government support for the popularity of Internet use has also encouraged ISPs to reduce charges continuously to attract more Internet users.

Source: business weekly

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A spokesman with China's Ministry of Information Industry (MII) recently refuted spreading rumors that drastic adjustment of telecommunications fees will come very soon.

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