Chinese Broadband Access Providers Asked to Follow International Prices

China’s major broadband access providers have been asked to follow international prices. The comment was from one of the top telecommunications experts of the country.

He said that the broadband providers need to match their prices according to international standards and reduce them by 30-50 percent per year. Hou Ziqiang, a professor at the Chinese Academy of Sciences, said that this is in view of the recent investigation, by the National Development and Reform Commission (NDRC), of China Telecom and China Unicom’s workings.

According to the investigation, the two broadband access providers have allegedly made monopolistic practices in domestic broadband access. Hou held up the US broadband access system where, he said that, the prices have dropped 10-fold over the decade and globally, the prices have been cut by 30-50 percent annually.

“This will benefit consumers a lot and help keep the industry’s growth healthy, instead of just letting those State-owned enterprises (SOEs) grab a large part of the profits,” he explained.

Ten years back, the NDRC had kept an upper limit on broadband access prices and waited for the market competition between private companies and SOEs to bring the price down. But the wait proved futile, as the years passed and prices remained near the upper end of the scale.

The price amounted to 1 million Yuan ($157,500) per gigabyte per month for commercial clients. The prices didn’t drop and the early competitors were erased from the picture by the two major giants.