Cable-telecom convergence may be new to China, but it’s brought back the bad old days, with excessive price competition and competitors damaging each others’ equipment.
According to Chinese telecom website CCID, cable operators are offering prices as low as 10 yuan ($1.49) a month for a broadband service.
CCID’s research around China has found heavy price competition in major cities such as Wuhan, Chongqing and Nanjing, with 2Mbps packages being sold for 30 or 40 yuan.
With cable operators winning over their customers with low prices, China Telecom and Unicom are responding with their own discounts, CCID reports. Both cable firms and telcos are doing offering unlimited bandwidth packages, with telcos bundling IPTV in with voice service.
“The price competition has sparked improper competition, exacerbating the confrontation between telecom and cable,” CCID said. “It seems as if … convergence has entered a vicious circle.”
CCID quotes a Ms Li of Wuhan who is unhappy about the “dazzling” price ranges on offer, typically from 50 yuan down to 20 yuan, because of the aggressive tactics of the cable firms and the poor quality.
Taiyuan media reports the complaint of a Mr Zhao, who has twice had his IPTV service cut, recalling the days of early telecom competition in China when reports of vandalized exchanges and physical brawls between rival employees were common.
Fu Liang, a Beijing telecom analyst, told CCID he believes the problems are made worse by the absence of a unified regulatory body to cover both telecoms and cable.
The website observes that price wars are inevitable in the early stages of competition, but the current behavior “shows no change” over the years.