Tighter rules for telecom costs

0 Comment(s)Print E-mail Shanghai Daily, April 26, 2012
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China, the world's biggest phone market with more than 1 billion users, is to strengthen rules covering irregular charges in the telecommunications industry this year, the top industry regulator said yesterday.

The problems include hidden charges, exaggerated advertising claims and abuse of monopoly positions, said the Ministry of Industry and Information Technology.

Users find they are often charged for "value-added" services they have not subscribed to.

For example, a user surnamed Yuan in Lianyungang City found his family were being charged 35 yuan a month by China Telecom for an "Intertnet TV" service. The carrier was found to be automatically charging users for several months, without any notification, after a three-month trial period for free services had ended, CCTV reported recently.

"Irregular charges have become a wide concern in society," Zhang Feng, a senior official at the ministry, said during an online conference yesterday. "The rules will help us establish a healthy industry environment and bring costs down gradually."

In 2011, China's telecommunication costs decreased 4.8 percent year-on-year but were still high compared to other countries, according to the ministry.

Carriers are to be required to improve their charging systems, provide more package choices and feedback channels for consumers and clean up irregular charges. They will also be forbidden to make use of their monopoly to hurt users' interests.

China's broadband market is dominated by China Telecom and China Unicom, which have been criticized as providing "fake broadband" because of low speeds and high prices.

According to the Beijing-based Data Center of China Internet, 91 percent of users experienced broadband speeds of less than 400 kilobits per second by the third quarter of last year.

The average cost of 1 megabyte per second bandwidth on China's mainland was four times the equivalent cost in the United States and more than 400 times that of Hong Kong, it said.

China is to upgrade broadband networks in urban regions to 20 megabytes per second by 2015, two to five times the current level, triggering total investment of 500 billion yuan (US$79.4 billion) this year, the ministry said.

Besides broadband services, some mobile applications were costing customers more than they thought by taking up a huge volume of Internet traffic and leading to higher mobile bills.

Carriers have a responsibility to inform users before charging them, Zhang said.

By the end of March, China's broadband user base was 157.5 million, adding 7 million in the quarter, the ministry said.

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