NDRC to rule on broadband monopoly

File photo of China Unicom exhibiting at an expo of Internet of Things in Shanghai. [Jing Wei / Asianewsphoto]

BEIJING - China's top economic planning agency is assessing a monopoly case involving two large telecom companies and will make a ruling soon.

Wednesday's news comes more than two years after the National Development and Reform Commission (NDRC) began to investigate the suspected monopoly of China Telecom and China Unicom in the broadband business.

The NDRC was assessing whether the two companies had completely fulfilled their promises to resolve the problems and whether their measures had eliminated the questionable practices, said Xu Kunlin, head of the commission's bureau of price supervision and anti-monopoly, at a press conference.

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The commission will make its ruling based on the assessment in due course, Xu added.

The two operators, which together account for 90 percent of China's broadband business, could face fines of up to 10 percent of their annual revenues from Internet services, the NDRC said when it launched the probe in November 2011.

After a year of investigation, the NDRC found the two companies failed to fully integrate their networks, causing a lack of competition, increased access costs and slow Internet for customers.

This is the first case on this scale since anti-monopoly laws came into force in 2008.

At the end of 2011, the two companies asked the NDRC to end the investigation, promising to mend the problems, integrate their networks, stop price discrimination against Internet service providers, raise broadband speeds, and lower broadband costs.

At the turn of the year, China Unicom and China Telecom both submitted reports to the NDRC on their solutions to the problems.

Xu said that the two companies had significantly raised network integration, extended direct-link bandwidth of their backbone networks, increased broadband speeds and lowered prices.

The average broadband speed for China Telecom customers has increased to more than 6 megabytes. For China Unicom users it has risen to more than 5.1 megabytes, according to the NDRC.

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Prices for broadband had also fallen significantly, but Xu did not give detailed figures, saying that the two companies had promised to cut prices by 40 to 50 percent. The NDRC was assessing whether the promises had been honored.

China Telecom shares traded in Hong Kong barely changed on Wednesday, while China Unicom's stock lost 0.77 percent.

China has the world's largest Internet population, with the number of users reaching 618 million by December, figures from the China Internet Network Information Center showed in January.

However, China's average broadband speed only ranks 71st in the world. The average cost is three to four times the average level of developed countries, said a 2011 report released by the Advisory Committee for State Information, an advisory body to the Chinese government.

 

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