Phone firms tapping into rural areas
By Li Weitao (China Daily)
Updated: 2006-03-14 05:40

A farmer's best friend used to be an ox; and a merchant's, a cart. But in this era of modernization, Li Linjun, a farmer-merchant in Northwest China's Shaanxi Province, has a new best friend his mobile phone.

He can talk shop with vendors and buyers of his pig feed whether working on the farm or driving his mini-truck. With his mobile phone, he runs the business from his home village in the sprawling Baoji area, a mountainous region of Shaanxi.

An increasing number of families in Li's village are now signing up for telephone services, benefiting from a programme initiated by the central government called Cun Cun Tong meaning connecting every village.

Completing the Cun Cun Tong programme and connecting every village by telephone fixed lined and mobile is part of China's telecommunication development plan for the 11th Five-Year Plan (2006-10).

The programme already covers most villages, although the most difficult part is providing connections for remote areas, Su Jinsheng, director of the Bureau of Telecommunications Administration at the Ministry of Information (MII), told China Daily.

Under official classification, a village means an "administrative village." In most places it is a natural grouping of farmhouses but in sparsely-populated regions, it may just mean an administratively defined area.

In early 2004, when the programme was launched, telephone services were available in 630,000 villages, or around 91 per cent of the nation's total, Su said.

The figure had been raised to 97 per cent by November 2005, when another 50,000 or so villages were added to the existing networks of China Mobile, China Telecom, China Netcom and China Unicom.

Network development efforts are now focused on the remaining 2-3 per cent of villages in the coming five years, Su stressed.

The widespread use of telecommunications is bringing a lot of changes to farmers' lives in saving lives, especially in medical emergencies, and in raising incomes.

And in many villages, the network coverage in Li's case by China Mobile is by no means inferior to that in the cities. People have choices, too: the cheaper fixed-line service is often easily available although the line may be too weak for broadband Internet connection.

Cun Cun Tong requires at least two telephones in a village, one in the public telephone booth and the other in the office of the villagers' committee, Su said.

The government has been pouring huge amounts of money into rural infrastructure projects to help local people diversify their sources of income and shake off poverty. Among the most common projects are telecommunication, power grids, television relay stations and roads.

Building networks in the countryside, especially in mountainous villages, can be costly and often unprofitable, industry officials said, although indirectly, it has a great potential for generating wealth for the locals.

In Baoji, where Li Linjun lives, China Mobile's local branch has invested 300 million yuan (US$37.5 million) in the past few years for building and optimizing rural networks.

In January, while continuing to invest in network development, China Mobile's Baoji branch launched a project in which farmers can search and post on their mobile phones information about their farm production and related services.

China Mobile - the country's biggest network - has invested 9 billion yuan (US$1.12 billion) to cover around 95 per cent of the villages, some of which still have no electricity or roads, according to its chairman Wang Jianzhou.

In telecommunications, Su said, China has already exceeded the target set five years ago by as much as 38 per cent. Network coverage, especially for mobile phones, is much wider than other developing countries including India.

For the 11th Five-Year Plan, Su said: "We want to see a telephone service in each administrative village and Internet service in each town."

Under government classification, towns and townships are one level above villages, and there are 36,900 towns and townships.

In terms of service quality, there is still a long way to go, Su admitted, as the minimum of two telephones in a village may be far from enough.

But fortunately, operators are beginning to see quick rewards for their continuing rural investment. In some recent cases, Su reported, the increase in rural users has been "beyond anticipation."

With the telecom penetration rate already high in cities, the majority of newly-added telephone subscribers are from rural areas.

In Beijing and Shanghai, according to Wang of China Mobile, the figure stands at 97.8 per cent and 82.9 per cent.

And in Guangzhou, it is 117 per cent, meaning some people already own more than one phone, which will push operators to tap the rural market more aggressively.

"The vast rural areas still have huge potential," Wang said.

(China Daily 03/14/2006 page1)