TELMIN 5
Economic and Telecommunication Department in 21 Member Economies
Development of China's Telecom Industry
TELMIN 5
The Fifth Ministerial Meeting of Telecommunications and Information Industries (Telmin5) is to be held in Shanghai from May 29 to 31, 2002. This will be the first ministerial meeting of telecommunications and information industries since the beginning of the new century, and it is therefore of great significance.
Since the Meeting in Seoul, APEC has held 4 ministerial meetings of telecommunications and information industries. With these meetings, profound and extensive discussions were made on many major policy and technology issues with regard to ICT development in the APEC region; a number of important guiding documents were adopted and long-term initiatives of building Asia-Pacific Information Society (APIS) and Asia-Pacific Information Infrastructure (APII) proposed.
Responding to the instructions of the Ministers, APECTEL has made great efforts and accomplished positive results in studying the issues such as infrastructure development, e-commerce promotion, market opening and human resources development, contributing greatly to facilitating APEC trade and investment liberalization and economic and technological cooperation.
At present, with the world economic slow-down and even trend to recession, especially with the bursting of economic bubbles and over-competition in the telecom market, ICT sector in the Asia-Pacific region has fallen into sluggish development. Faced with such a severe situation, it is urgent and important for APEC economies to recognize the trend of globalization and network based informatization, believe in the driving force of ICT in the global economic growth, seize the digital opportunities and bring about common progress of ICT in the region. Therefore, the theme of the coming ministerial meeting is proposed as "leveraging digital opportunities to promote common development". Around the theme, ICT development strategies in the APEC region will be discussed, future directions will be proposed and specific action plan will be formulated. Member economies will take the opportunity to explore ways to enhance cooperation and exchanges, get out of the ebb of economy hand in hand and promote prosperity of info-com industry in the region.
Telmin5 will produce two important output documents, namely, Shanghai Declaration and Program of Action, in which the ministers will make general policy statements with regard to future development and goals of ICT in the Asia-Pacific region. It is hoped that this meeting will send a strong signal to all APEC economies that ICT sector will remain a strategic position and ICT will continue to serve as a main driving force to the development of the global economy. At the same time, member economies will be called upon to strengthen further cooperation and exchanges, grasp digital opportunities and work for common development. Furthermore, the ministers will give concrete instructions to APEC TEL for their work in the coming two years in terms of information infrastructure, communication policies and market regulation, information and network security as well as human capacity building.
Prior to the ministerial meeting, a Senior Officials Meeting (TELSOM2) will be held on May 27 and 28 to discuss and finalize Shanghai Declaration and Program of Action for the ministers to adopt.
Telmin5 will be officially open on May 29, followed by a three party dialog at which Ministers, industry CEOs and leading academics will discuss and explore ways to transform the digital divide into digital opportunity and seek to strengthen the cooperation among APEC members.
The first plenary session will focus on the "infrastructure construction" to address such issues as interconnection, promotion of infrastructure development, the uplifting role played by info-com for traditional network, the application of info-com technologies, market and funding.
The second plenary session - "Telecom Policy & Market Regulation" will mainly address regulatory and policy-related issues, including the creation of a market environment that is conducive to an effective and orderly competition; policy environment of E-commerce and information security; ways to promote the healthy and orderly Internet development in APEC region.
The third plenary session - "Information & Network Security" will address primarily information and network security issues, including ways to strengthen the cooperation and information exchange between economies, development of framework for information communication security.
At the fourth plenary session, ministers will focus on HCB issues in the APEC region, including ways to strengthen HRD through the Internet; raising people's awareness about the importance of information communication; exploring innovative mechanism to better coordinate and utilize existing training facilities and resources available within APEC economies.
The fifth plenary session will set future directions for TEL. Ministers will discuss the broad areas of efforts they would like TEL to pursue in terms of "Leveraging digital opportunities to promote common development".
The final plenary session will endorse the Shanghai Declaration and Program of Action.
Economic and Telecommunication Department in 21 Member Economies
No.
Population
Total (million)
Density (km2)
GDP
Total (billion USD)
Per Capita (USD)
Telephone Subscribers
Total (thousand)
Penetration (%)
Telephone Main Lines
Total (thousand)
Penetration (%)
No.
Economy
Mobile Subscribers
Total (thousand)
Penetration
Internet Subscribers
Total (thousand)
Penetration
Internet Hosts
Total (thousand)
Penetration
PC
Total (thousand)
Penetration
No.
Economy
Telecommunication Business Revenue (100 million USD)
Investment on Telecommunications (100 million USD)
Telecommunication Equipment Market (100 million USD)
Export
Import
ISDN Subscribers (thousand)
Employees of Telecommunication Businesses (thousand)
No.
Economy
TV Sets
Total (thousand)
Penetration (%)
Households with TV
Total (thousand)
Penetration (%)
CATV Subscribers (thousand)
Households with Satellite Antenna (thousand)
No.
Economy
IDD Traffic (million minutes)
International Circuits (thousand)
Telecom Indices of Largest City
Proportion in Population (%)
Telephone Main Lines
Number (thousand)
Share in the Total of the Country
Penetration (%)
Development of China's Telecom Industry
Since the reform and opening up, China's information and telecom industry rises abruptly, and draws attention from the rest of the world. With the strong support from the Government, the industry breaks a new path to success by undertaking "development in reform and reform in development". The industry is shifting from a "bottleneck" that hinders the reform and opening up campaign and economic development, to a leading industry, a pillar industry and a strategic industry as positioned in the national economy, with astonishing growth rate achieved and the overall level up to a new high.
(1) Information and telecom industry is one of the fastest growing industries in China
Over the past 20 years and more, China's information and telecom industry is exhibiting sustained rapid growth, with a two-digit business growth rate maintained since 1978. Since 1984, the industry grows faster than the national economy as a whole. In the recent 22 years, the business revenue increases at an average annual growth of over 30%, with the highest of 50%, 10-30 percentage points higher than that of GDP. Telecom business revenues in 2001 recorded 353.5 billion Yuan, 484 times of that in 1978.
The more eye-catching fact is the spectacular growth of telephone subscribers in China. By the end of 2001, the subscribers of fixed line telephone and mobile telephone topped 324 million. The number moved up to 350 million in March 2002, 87 times of that in 1978. Among them, 190 million are fixed-line subscribers, while 160 million mobile subscribers. The telephone penetration in China is now 25.9%, while 0.07% at the first a few years after the founding of the People's Republic of China and 0.38 in 1978. The penetration of fixed line telephone and mobile telephone are 13.9% and 11.2% respectively. 83% of the administrative villages across the country are with telephone access.
Look back on the history, it took a long time of 110 years to have a customer base of 10 million in 1992, since the first telephone was in service in 1882. But another 6 years were taken to reach 100 million in 1998, and 2 years to 200 million in 2000 and more than one year to 3oo million in September 2001. The number of newly added subscribers in 2001 is even greater than the total number of that in the 48 years before 1997. Telephone is available in most of the households. Today, the residential telephone subscribers in China hit 146 million, or 81.8%. Even in rural areas, the number is 68.057 million, or 38%. Emerging services, like VoIP, Internet and data communications are growing rapidly as key revenue sources.
(2) Remarkable improvement of information and telecom infrastructure
The investment on China's information and telecom industry upsurges as well, prevailing against investment on any other infrastructure, with the amount of 100 billion Yuan in 1997, 150 billion Yuan in 1998, 2 billion Yuan in 2000 and the same in 2001. By the end of 2001, the cost value of the fixed assets of the whole industry was over 1 trillion Yuan, 131 times of that in 1978. The proportion of the investment on fixed assets of the industry in the total investment on all the sectors was up to 7.4% in 2001 from 0.86% in 1978.
Years of efforts have come to fruition in deployment of a technically advanced, secure and reliable network with diversified services has a national coverage and connects the rest of the world. By the end of 2001, the total length of optical trunks in China was up to 1.46 million kilometers, among which 340,000 kilometers for long haul optical trunks. Terrestrial and submarine optical cables linking China and Japan, Asia and Europe, China and US, etc were well in place and operational. The long distance circuits were up to 2.89 million, 145 times of that in 1978. The total switching capacity was up to 200 million, 50 times of that in 1978. Emerging service networks were completed with ever-increasing capabilities. The mobile switching capacity was up to 220 million. The total number of the ports for data and broadband networks was over 1 million and the bandwidth for international gateway of Internet 7.6 G. Direct links with 71 countries in the world were set up, and telecom services with more than 200 countries are offered. Automatic roaming for mobile telephone in 90 countries is available.
(3) Dominance of information and telecom industry in China's informatization drive
The networks offering public data communication, multimedia and Internet services in China have a national coverage. The capabilities of packet-switched network, DDN and broadband service network and the total bandwidth for international gateway of Internet saw marked improvement, together with further expansion of network platforms, the limitations of bandwidth on network growth have been effectively alleviated. The development of information and telecom industry promotes development of e-government, e-commerce, distance learning, telemedicine and enterprise management informatization. It also plays a vital role in transformation of traditional industries and improvement of information applications in all the sectors by means of leveraging IT. Telecom businesses, through cooperation with departments concerned, vigorously and practically promote the three major projects for government online, enterprise online and household online. Quality services and strong support in terms of network platforms are delivered especially in the key areas of finance, customs, taxation and foreign trade, etc to push forward the informatization deployment. For the time being, 187 national information application systems built by various sectors and departments are in place, with the help of public telecom networks.
(4) Remarkable progress in information and telecom facilities and R&D activities
With a technical policy of introduction, absorption and innovation, China has made phenomenal achievements in information and telecom networks within a dozen of years, starting from a higher level and maintaining great-leap-forward growth. Many other countries took several decades to make such achievements. The telephone switching is all SPC-based. Long distance transmission is all with optical cables. World-advanced level was quickly up as technological progress by leaps and bounds were attained.
This policy is a powerful driver for improvement of R&D of IT products in China. Chinese telecom manufacturers had group breakthrough in key areas such as SPC switching, fiber-optic communications. A great number of state-of-the-art equipment and systems, including those for mobile communications and DWDM, were developed. The TD-SCDMA, a 3G standard proposed by Chinese experts has become one of the international standards recommended by ITU. It took 10 years for China to market the first 10000-line SPC switching system with China's own intellectual property rights after the first 1000-line SPC switching system introduced. It took 4 years to launch the first China-made GSM system from the first GSM system introduced. As for R&D of 2.5Gb/s high-speed optical communication systems, ATM switches, and some other systems, China is 1-2 years behind the world-advanced level.
As for the supplement of equipment for information and telecom networks in China, a shift from the dominance of imports to home made systems was basically complete. The proportion of home made switching systems in service was up to over 80% from 55% in 1995. Systems newly added since 1995 were generally home made. The localization rate for optical transmission equipment and mobile communication equipment climbed up. Massive deployment of the home made intelligent network systems in telecom networks has started. The information and telecom equipment made in China can be found in virtually every area, such as switching, transmission, access, data, high-speed networks. Some products are already for export.
(5) Step-by-step implementation of regulatory system for telecom industry
Since 1998, Chinese Government makes greater efforts to undertake reforms in information and telecom sector. The Ministry of Information Industry was established as a result. The separation of administrative functions from business functions in information and telecom industry was thoroughly achieved. A regulatory system for telecom industry with centralized management was taking shape by and large as local telecom regulatory agencies set up. In recent years, MII enhances legal system, unified planning, technical standards and service quality supervision to vigorously introduce telecom market competition, formulate the associated regulations and policies, intensify regulation on market access, interconnection and inter-working and market order. The resource recollection is optimized to ensure sound development of the industry. China also restructures the radio regulatory system and sets up a Radio Directorate under MII and National Network and Information Security Management Center for further enhancement of the management in these areas.
Since 2000, China promulgated laws and regulations one after another. These include Telecommunication Regulation, Internet-related Information Service Management Methods, NPC Standing Committee's Decision on Maintaining Internet Security, Regulation Concerning Foreign Investment on Telecom Businesses. MII also promulgated 17 telecom-related Orders of Minister. In the same time, Telecommunication Law is in the process of being drafted. A telecom law and regulation system that meets the requirements of market-oriented economy and international standards is taking shape.
(6) A competitive information and telecom market is making
Since 1998, China restructured its telecom industry on the basis of separation of postal sector from telecom industry. Monopoly was broken and competition introduced. Currently, competitions are found in all the basic telecom services. China's information and telecom industry is with a market pattern featuring competition between market entrants with different scales, services and ownership, complement to each other with their respective strength, and common development. There are currently six big players that offer basic telecom services. They are China Telecom, China Netcom, China Mobile, China Unicom, China Satellite Communication Corp. and China Railcom. More than 4000 service providers offer value added telecom services. By March 2002, China Telecom grasps a market share of 50.5% in telecom business revenue market and China Mobile 36.6%. China Unicom, a new player, holds a share of 11.3%, growing swiftly. As for mobile communication and long distance optical cables, China Unicom enjoys market shares of 29.6% and 23.5% respectively. The newly organized China Railcom has built its own customer base.
The revamped China Telecom Group Corporation and China Netcom Group Corporation were founded lately. This signaled an end of restructuring China's telecom industry. The two group corporations inherit 70% and 30% of the national transmission backbones previously owned by the old China Telecom, and the local telephone networks in their territories. However, after restructuring, the two group corporations are allowed for business operations in each other's territories, as deploying local telephone networks and offer local fixed line telephone services. China's telecom market liberalization has come to such an extent within a period of more than three years, while many developed countries took seven or eight, even a dozen of years to achieve such a goal.
Industry restructuring and market competition revitalizes Chinese information service providers and telecom operators, promoting transformation of operational mechanism and enhanced management, and resulting reduced cost, increased efficiency plus improved services. By the end of 2001, the average time limit for telephone installation in China is as short as 10.5 days. An Employee of China's carriers maintains up to 575 lines, in average. This index is up to the world advanced level.
(7) Further opening up of information and telecom industry
By 1998, China's information and telecom industry has attracted foreign investment in an amount of 10 billion USD. The listing of China Telecom (Hong Kong) in New York and Hong Kong in 1997 is a milestone, indicating that China's information and telecom industry is involved in international capital market. To date, Chinese telecom operators have already conducted four times of massive financing in international capital market, with accumulated capital of 20 billion USD. China Mobile (Hong Kong) has become one of the listed companies with the largest market capitalization in Asia (Except Japan). China Unicom has become a key Chinese listed company in overseas capital market. China's information and telecom industry have exploited a variety of new financing methods, including IPO, bonds, corporate loan, and financial cooperation with their foreign counterparts. A financing pattern with multiple channels is taking shape.
Since 2001, with China's accession to WTO, China's information and telecom service market has been open to the outside world. In accordance with the agreement reached for China's WTO membership, basic telecom services should be offered by carries with Chinese party as the major shareholder. International telecom services should go through the international gateways approved by China's government departments in charge of telecom management. As required, foreign operators are allowed to be involved in business operations in terms of basic and value-added telecom services, in the way of co-funding, with limitations on equity proportion, business scope, geographic coverage and time for services. China will firmly implement its commitment of market liberalization, with open and transparent policies. Foreign businesses will be granted "National treatment", with legal rights protected in the framework of laws and regulations. Meanwhile, national interests will be maintained in the framework of WTO rules. At present, China's telecom regulator have reviewed all the related regulations and policies. Those that were against WTO rules were abandoned. The regulator will implement a fast transformation of government functions and enhance the regulatory functions to create excellent environment for opening up of China's information and telecom industry.
(8) Telecom tariff is cut down sharply
On the basis of adjustment made in the previous years, Chinese Government made three major structural readjustment of telecom tariff respectively in March and October 1999 and January 2001, with unprecedented changes made in terms of difference and range. After readjustment, the situation in which rates for international and domestic long distance calls were much higher, and the rates for local calls were much lower, that run for a long term was totally changed. The tariff as a whole was cut down sharply. The pricing ratio between different services has been more rational. After tariff readjustment in 2001, rates for most services were down, except that for local calls that was a bit up. The rates for international calls and calls to Hong Kong, Macao and Taiwan, domestic long distance calls, Internet access and leased circuits were cut down as much as 42%-95%. Rural areas share the same rates and networks with urban areas. The charging unit for long distance calls was shortened from 1 minute to 6 seconds. Additionally, charges for fixed line telephone installation and mobile telephone's network access were cancelled. The one-time cost for fixed line telephone installation in China is much lower than the average of the world.
(9) Gap between China and developed countries is narrower in terms of overall level of information and telecom industry
Since 1991, China's telephone networks witnesses a capacity expansion of over 10 million lines as average in a year. Since 1996, the figure is up to 20 million lines. The number of main lines of fixed line telephone networks in China is placed No. 2 in the world, while No.15 in 1990, No.4 in 1995 and No.2 in 1997. By the end of 2001, China has the largest number of mobile telephone subscribers in the world. Together with fixed line telephone subscribers, the total number of telephone subscribers is placed No.1 in the world. 17% and 15% of the total number of the fixed line telephone subscribers and mobile telephone subscribers in the world are in China. In the same time, China is among the world-advanced countries in terms of equipment and technologies used in networks. Switching systems, long distance transmission and mobile communications all go digitized, ahead of many developed countries. Today, new telecom technologies and services already available in the world are all available in China as well. Billions of Chinese people including those in Tibet, so called "Roof of the World", enjoy great facilities brought up by SPC-based telephone, mobile telephone and Internet. China is also actively involved in deployment of international optical cables and promotes cooperation and exchange with other countries and regions. China is an enthusiastic participant in global and regional organizations like ITU and APT, with a constructive role to play.
(10) Prospects of China's information and telecom industry
China's information and telecom industry will seek for further growth in the context of economic globalization and ever-increasing international competition in the new century. As required by the strategy of "Informatization for Industrialization" proposed by Chinese Government, the development objectives for China's information and telecom industry in the next 10 years are as follows:
The total number of the telephone subscribers will reach to 500 million in 2005;
Telephone penetration will hit 40%;
Telephone access will be available in all the rural areas;
Users of data, multimedia and Internet services will be up to 200 million;
By 2010, China will complete information and telecom networks with high-speed and high-capacity transmission, combination of narrow-band and broadband applications, flexible access by means of fixed lines and mobiles, and rich contents. These allow communication at any time and at most places in China to provide reliable network services and support for social informatization. China's information and telecom industry will seize the opportunities of global IT revolution to stimulate strategic restructuring of networks, and uphold the guiding role of market, in close combination with China's specific conditions. China will endeavor to promote e-government, e-commerce and enterprise informatization. The pace of transforming traditional industries with IT will quicken. Exploitation and use of information resources will be enhanced, while development of various public databases encouraged for resource sharing. Networks will spread out to the vast rural areas, for a balanced development in east, central and west areas of China. China will further enhance international cooperation and seek close cooperation and intensive exchange with various countries and regions in the aspects of information and telecom technologies, services, management and human resources, aiming to narrow the "Digital Divide" and score greater achievements.
- 作者： zhangliping 访问统计： 2005年02月25日, 星期五 05:23 加入博采
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