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Jitong Gets Big Boost from Fee Adjustments
Jitong Communications Co Ltd, one of China's six telecom operators, got encouragement from the recent telecom charge slash and expects to do a brisk business in the milder environment.
On December 25, the government announced a new telecom charging plan in which the lending fees for DDN (digital data network) and trunk lines were greatly reduced.
The price adjustment statement issued by the Ministry of Information Industry, the State Development Panning Commission and the Ministry of Finance said the lending fee for trunk lines used for citywide telecom business would drop from 9,000 yuan (US$1,090) to 3,000 yuan (US$362.30) per month. The rental fee for citywide trunk lines used in providing Internet services also declined, from 4,500 yuan (US$543.50) to 2,000 yuan (US$241.55).
The company, which has branched out into a variety of telecom sectors since it was established in 1994, said in a statement that the price readjustment will eliminate a large portion of its operating costs.
Before the government's decision, Jitong had been watching its profits and future plans wither away in the face of high line rental fees.
"The lowering of network rental fees and the trial fibre optic rental business could help us readjust our network construction budget and reduce planned construction costs," the company statement said.
"Our target for the coming five years is to set up a nationwide high speed broadband comprehensive telecom network and try to cover 200 cities," the company added.
Jitong's networks have already covered 100 Chinese cities, and the company has set up more than 100 subsidiaries across China.
Source: China Daily
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