China Railcom Expected to Start Business in July

China Railcom is scheduled to start providing fixed-line telecom services around the country in July, a move that is expected to provide the first head-to-head combat with the dominant China Telecom.

China Railcom is the second biggest fixed-line telecom provider, but before being spun off from the railway industry in late 2000, its business was limited to the railway sector.

"A nationwide marketing movement will start in July and all the companies' 29 provincial branches will start to provide services," spokesman Dong Binfeng said.

Trial operations started months ago in Beijing and Shanghai. China Railcom's fixed-line telephone business received a warm welcome because calls cost significantly less than those from China Telecom.

The first-time access fee or telephone line installation fee is 680 yuan (US$82) with China Railcom, nearly half of China Telecom's price.

China Railcom's regular telephone dialing charge could also be 20 per cent lower than China Telecom, according to documents from the Ministry of Information Industry.

Five nationwide optic fibre circuits will also kick off in July, which are said to be the best in Asia with 400G bandwidth, the spokesman said. The phrase "400G" means 400 gigabits of information could pass per second.

"China Railcom's backbone network will top Asia in both length and bandwidth. With the most updated technology adopted in the network, the transmission speed of data, voice and visual signals will be significantly increased," Dong said.

The China Development Bank is providing 7.2 billion yuan (US$867.5 million) for the network construction.

China Railcom is now in negotiation with China Telecom for network interconnection. Interconnection refers to the network connecting and renting and data transmission among different operators.

As the dominant fixed-line telecom operator, China Telecom owns major shares in the country's network capacity. It has 155 million telephone users at present. Low charges on interconnection are a key reason to guarantee Railcom's future development.

Although encouraged by the preferential policies of the government and supported by a strong network capacity, China Railcom is not expected to threaten China Telecom's monopoly in the short term.






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