Interview with MII Official on Telecom Fee Adjustment

The Ministry of Information Industry (MII), the State Development Planning Commission, and the Ministry of Finance jointly issued the telecom fee readjustment plan on December 25. Following are the main points of an exclusive interview by Xinhua Reporter with an MII official on the characteristics of the readjustment plan, its possible influence and some other problems.

Question: International and domestic long-distance calls and the monthly rents, additional charges and other Telecom fees have close relations with the masses of Telecom users. What are the characteristics of the adjustment?

Answer: In the adjustment, the overall level of Telecom fees is to be greatly lowered. At the same time, in order to make Telecom charge policy more fair, transparent and rational, some Telecom business structures are simplified, for instance, no difference will be made in call-in location for international phone calls, the fees will be adjusted to a unified 0.80 yuan per six seconds and calls to Hong Kong, Macao and Taiwan are unified to 0.20 yuan per six seconds, in the meanwhile, additional charges are to be canceled.

Question: China has always practiced government-fixed or government-guided prices for telecom fees, while Telecom operators have little right to set prices, regarding this, are there any new stipulations in the telecom fee readjustment this time?

Answer: On the premise of tightening government supervision in the present telecom fee readjustment, some Telecom operators, which have formed a fully competitive system, can introduce self-fixed price regulated by market forces. First, liberalizing service charges on pager. Second, IP phone call providers can set relevant charge standard according to their own cost structure and operating characteristics, but in regard to the settlement of international call that affects national interests, they shall implement the standard stipulated by the MII. Third, controls over charges on server trustee business, transferring fee, pager shifting, display upon telephone ringing, short message and other value-added charges will also be lifted.

But, these decontrolled Telecom charges shall all be put into records. With regard to unfair pricing acts, such as lower-than-cost competition and disrupting normal price order, they shall be investigated and prosecuted by pricing management departments in accordance with relevant laws and regulations.

Question: What influence will be exerted by the readjustment on Telecom operators?

Answer: After the telecom fee readjustment, the general level of telecom fees will be drastically lowered, according to a static estimation of constant business volume in 1999, the yearly revenue of telecom enterprise will drop by about 20.378 billion yuan. The price cut will effectively stimulate consumption and increase domestic demands, but due to different consumption structures, local telephone structural readjustment will have different influence on different clients. Generally speaking, the average cost per consumer will reduced by 20.12 yuan annually.

Question: As an important component part of the national economy, what impact will the present readjustment have on the national economy?

Answer: lowering the general fee will play a positive role in promoting the development of the national economy. On the one hand, it will make China's Telecom structure become more rational, thereby speeding up the development of China's Telecom industry; on the other hand, it will accelerate the growth of China's economy and the secondary and tertiary industries.

First, lowering the general fee will effectively increase the number of telecom users.

Second, the readjustment will play a direct role in promoting the development of relevant industries, especially the Telecom equipment manufacturing, Internet and e-commerce industries.

In addition, according to experts' prediction, the readjustment will at least cause the number of long-distance calls and that of local telephone users to respectively increase by 5 percent and 10 percent, and will bring about a further GDP growth of the secondary industry by 0.1 percent-0.2 percent and that of the tertiary industry by 0.6-1.1 percent.

Question: Compared with the world telecom fee level, what change will take place after the present readjustment? And what benefit will it bring to promote China's opening to the outside world.

Answer: The drastic lowering of the standard for charges on international phone calls and on calls to Hong Kong, Macao and Taiwan will further narrow the telecom fee gap between China and developed countries, and regions; it will help crack down on illegal internal and external operation of phone calls: international phone calls and calls to Hong Kong, Macao and Taiwan; it will also help further improve China's soft investment environment, encourage foreign businessmen to increase their investment and development efforts in China. The substantial telecom fee cut on phone calls to Hong Kong, Macao and Taiwan will exert far-reaching influence on further accelerating political, economic and cultural exchanges between China's mainland and the regions of Hong Kong, Macao and Taiwan, and on promoting the accomplishment of the great cause of the reunification of the motherland.



By PD Online Staff Li Yan


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