Premier Li’s remarks prompt industry to chart steps to boost speed and reduce fees

An expatriate customer surfs the Internet in a cafe in Beijing. Internet connection speed in China was only 3.4 megabytes per second at the end of 2014, ranking 82nd globally.[Photo/China Daily]

The Ministry of Industry and Information Technology, the industry regulator, has pledged to find ways to lower prices of the fourth-generation telecom services, which were put into use less than two years ago.

“The construction of the 4G network and speed enhancement will be the main focus for this year and we are committed to provide a faster network at lower expense,” the ministry said.

In a meeting with entrepreneurs and economists on April 14, Li flayed China’s mobile Internet services and said smartphone users would ask for free Wi-Fi connections as the mobile Internet services are “too expensive”.

“It is difficult to imagine how underdeveloped our information infrastructure is,” he told the meeting at one point.

Xiang Ligang, a telecom researcher and founder of industry website cctime.com, said the average mobile connection speed in large and medium-sized Chinese cities are no worse than that of the United States and Western Europe. Poor 4G services in less developed small towns and rural areas have, however, dragged down the overall speed.

The worldwide average Internet connection speed was 4.5 megabytes per second at the end of 2014 while the speed in China was 3.4 mbps, which ranked the country 82nd globally, according to Internet service provider Akamai Technologies.

The country with the fastest Internet connection was South Korea, whose average speed exceeded 22 mbps, according to the company.

Industry players have an ambitious plan to lift mobile Internet connections in the country, the world’s largest smartphone nation. China’s three telecom carriers are pushing 4G services to smaller cities and trying to attract more lower-end 4G users.

Miao Wei, the industry and information technology minister, said earlier this year that the nation would add more than 200 million 4G users in 2015. China Mobile Ltd, the largest carrier by subscriber numbers, said it aims to have 250 million 4G users by the end of this year, meaning the company itself needs to add about 160 million new 4G subscribers this year.

Although the carriers have introduced an array of promotions and the 4G charges have been dropping as more subscriptions have diluted costs, customers are still complaining about the increasing traffic charges after adopting the 4G service.

Zheng Xin, who works at a real estate agency in Beijing, said he spends more than 50 yuan ($8) every month to purchase extra traffic quota.

“I only get 1 gigabyte of quota for 50 yuan, so I’m trying not to waste it on non-essential matters,” he said, adding he usually downloads videos using a Wi-Fi connection and opts for low-quality streaming content while using 4G.

The carriers did not comment on the matter. A China Mobile employee familiar with the 4G business said if one were to factor in the huge expenditure incurred by the carriers for setting up infrastructure, the fees are not high at all.

Xiang, the industry expert, said besides adding technology investment, the regulators should mitigate profit targets for the carriers, which are all State-owned enterprises.

“Building a 4G network that covers the entire country requires mammoth investment and every carrier is struggling to meet the profit targets set by the State-owned Assets Supervision and Administration Commission,” Xiang said.

He said attracting investment from the private sector will help ease the burden for the carriers.

China is gradually opening up the telecom industry to private capital. Non-State companies are allowed to provide value-added services using the carriers’ infrastructure.

The carriers are planning total 4G investment of 153 billion yuan this year, a jump of nearly one-quarter compared with the previous year, the financial reports showed.