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Jitong Slashes Price of IP Calls
The price war in the IP (Internet phone) business has finally exploded with the Jitong Communications Co Ltd announcing Thursday that it will dramatically slash basic charges for IP calls starting from February 18.
Such calls involve customers purchasing prepaid cards for calls that are placed via the Internet. The technology was introduced to China by Jitong in 1999.
From February 18, domestic IP calls will be 0.03 yuan (US$0.0036) per six seconds. Calls to Hong Kong, Macao and Taiwan will be 0.12 yuan (US$0.014) for every six seconds between 7am and 9pm, and 0.10 yuan (US$0.012) for every six seconds between 9pm and 7am. Calls to the United States and Canada will be 0.24 yuan (US$0.029) for every six seconds from 7am until 9pm, and 0.20 yuan (US$0.024) for every six seconds between 9pm and 7am. Calls to other countries and regions will cost between 0.26 yuan and 0.35 yuan (US$0.031-0.042) for every six seconds.
Previously, prices were decided by the Ministry of Information Industry (MII) -- on average, 4.8 yuan (US$0.58) per minute for IDD (international direct dial), and 0.30 yuan (US$0.036) per minute for DDD (domestic direct dial).
Jitong's charges for basic calls are the cheapest among its four rivals -- China Telecom, China Unicom, China Mobile and China Netcom.
"The six-second charge unit will attract many potential customers," said Ning Xianfu, vice-president of Jitong.
Business insiders said Jitong's price cuts could be seen as a move to fight back against China Netcom, the first firm to ignite the IP price war.
On January 1st, China Netcom announced that its charges for IP calls were being cut by up to 50 per cent. The move started a scramble among China's five IP call providers to slash prices.
Seeing many customers attracted by China Netcom's lower prices, Jitong vowed to grab back its lost share of the market with its own lower prices.
Before this year, only the MII and not individual telecom operators could make changes to prices.
"Jitong is making these new adjustments according to the responses of the market as the MII has given us right to decide the price for IP calls by ourselves," said Ning.
Source: chinadaily.com.cn
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