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Railcom Set to Steam Ahead
The competition between a new telecom company and the country's dominant fixed-line telecom operator started over the weekend.
China Railcom, the country's second biggest fixed-line telecom operator, established at the end of last year, announced its new standard rates in Beijing on Saturday.
China Railcom's fee for installing a new telephone in a home or office, is 680 yuan (US$82), half of the 1,235 yuan (US$149) rate that China Telecom charges.
China Railcom's service charge for local phone calls will also be 10 to 20 per cent lower than that of China Telecom, said Dong Binfeng, a spokesman for Railcom.
He said although Railcom will have a tough job competing with rival China Telecom in the short term, it will provide a second choice for customers.
Although small compared to giant China Telecom, which has over 140 million fixed-line users nationwide, China Railcom is making China Telecom nervous.
Before the birth of China Railcom, China Telecom enjoyed a monopoly in the fixed-line telecom business for several decades and there were frequent complaints from its customers about its high charges and poor service.
Facing growing competition, China Telecom launched a series of offers recently to attract more customers. Such deals include waiving installation fees for customers installing a second telephone at the same address, and giving gifts to new ISDN (integrated service digital network) subscribers.
"China Railcom will focus on group users and the newly constructed residential areas this year and plans to adopt fixed monthly charges, a practice widely used abroad," said the spokesman of Railcom.
He said the company is busy constructing a long distance call network. When the network is finished in June, Railcom's charges for long distance calls will witness a significant drop.
At present, Railcom uses the same charging standard for long distance calls as China Telecom, since it has to lease lines from the latter.
Jim Lin, chief telecom analyst of Frost & Sullivan, a US-based research house, said Railcom will completely change the country's telecom market which has been dominated by China Telecom.
"But the government must assure inter-connectability of the different operators," said Lin, who is worried that the dominating operator will not lease the network lines to minor ones thereby hindering the development of fair competition.
Source: China Daily
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