Telecom reality and delusion

Staff Writer
13 Mar 2008


Yet another survey has revealed the deep dissatisfaction of Chinese telecom users with their service providers.

A Chinese Consumers' Association poll - which also covered banking, electricity and other service sectors - found that consumers were angry about "unreasonable prices", a lack of transparency, the collection of "special service fees", misleading advertisements, miscellaneous charges for SMS, and spam or fraudulent texts about real estate, sexual and other services.

None of this is new to long-suffering consumers. But it would doubtless be a revelation to Wang Ruixiang, the deputy head of SASAC. Wang said last week that neither the fixed nor mobile segments could be termed a monopoly. In other words, no need for carrier restructure, new licenses, price cuts, or other time-consuming reforms.

Of course Wang was merely trying to protect the shareholder value of the telecom carriers. But it is hard to imagine how he could be more out of touch with the reality of the industry he helps supervise.

China is desperately under-served by telecom services competition. It is no accident that manufacturers like Huawei and ZTE are able to export worldwide, thanks to their grounding in the fiercely competitive domestic equipment market.

The mainland's slow-moving, secretive and high-handed telcos compare poorly with their counterparts in Hong Kong and India - to name just two neighboring markets. Both have encouraged competition at all levels of the value chain. Not coincidentally, both also have an independent regulator.

China's telecom regulators have now been made even more insignificant inside the newly-enlarged MII. The regulators remain indivisible from the policy-makers, and are seemingly now taking second place to the ministry's new industry development role.

It is time MII spun off its regulators into an independent body. It is a pity they did not take the opportunity presented in this week's bureaucratic shakeup. SASAC may applaud, but consumers will pay the price.

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