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TMCNet: Fixed phone service pricing adjustment to strengthen carriers' competitiveness

[November 25, 2009]

Fixed phone service pricing adjustment to strengthen carriers' competitiveness

BEIJING, Nov 25, 2009 (Xinhua via COMTEX) -- Industrial insiders believe that China's adjustment on the management model of telecom charges will help carriers' expand their markets.

The Ministry of Industry and Information Technology (MIIT) announced on Tuesday that it will adjust its management over fixed phone's local call tariffs, putting an upper-limit on the tariff rather than setting the price.

The MIIT asked telecom enterprises to provide their customers with at least one plan option that offers prices no higher than the existing arrangements. Under such an upper-limit arrangement, telecom operators are allowed to originate various pricing plans according to market and customer requests.



An MIIT official said that the pricing reform would create an eased environment for enterprises' business operations, encourage fixed phone service providers to expand their markets and compete, and lower related charges.

Wang Yuquan, president of Frost & Sullivan (China), held that the adjustment gave enterprises bigger decision-making power. If the carriers are permitted to cut service charges without notifying MIIT, their competitiveness on fixed line service will enhance.

China Unicom (0762.HK; CHU.NYSE) and China Telecom (0728.HK; CHA.NYSE) are China's major fixed line service providers.

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