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Monday, December 25, 2000, updated at 15:46(GMT+8)

China Lowers Telecom Fees

China announced a major plan to significantly lower telecom fees and costs Monday, December 25.

The State Development Planning Commission, the Ministry of Information Industry (MII) and the Ministry of Finance jointly issued the readjustment plan this morning.

The readjustment covers all telecom businesses except mobile phones services.

Telecom charges, apart from local phone calls, are lowered by a big margin.

Charges for international phone calls, leased circuits and Internet surfing are cut by more than 50 percent.

Charges for domestic long-distance calls are changed to 0.07 yuan per six seconds from previous pricing standard which charges differently according to different distances based on calculation by minute.

International phone calls are also lowered to 0.80 yuan per six seconds and calls to the Hong Kong, Macao and Taiwan districts are unified to 0.20 yuan per six seconds.

The telephone fees in rural areas will be lowered by a large margin.

Other readjustment items include charges for linking to Internet, IP telephone, and paging.

An official with the MII said that the new pricing standard will be applied as of January 1, 2001. But he added that the deadline is the March 1, 2001, considering the complexity of the readjustment.

China's telecommunications industry posted a hefty growth rate of more than 30 percent in 1999, much higher than the country's national growth rate.

However, telecom charges remained high due to the virtual long- term monopoly of the sector.

Thanks to the expansion of the telecom network and the introduction of new technologies, telecom authorities have readjusted charges on several occasions.

In December, 1996, for example, phone installation fees and international long-distance call charges were reduced, and the charges for domestic long-distance calls were further simplified.

However, it is acknowledged that current telephone charges are still high compared with developed countries.

For example, a phone call from Beijing to New York costs 18.4 yuan (2.2 U.S. dollars) per minute, about 3 times the charge to make the same call from New York to Beijing.

Other aspects such as high charges for telecom lines rental and long distantance calls to Hong Kong and Taiwan, and low costs for inner city calls still stand in the way of further expansion of the telecom market.

MII and other relevant departments said earlier this year that they will speed up reforms on the data telecom fees and draw up a more scientific payment policy.

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China announced a major plan to significantly lower telecom fees and costs Monday, December 25.

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