Review of Telecommunications
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1 2009 CHINA/U.S. LEGAL EXCHANGE Review of Telecommunications Development and dreform in China Shi Yuchun Shi Yuchun Department of Policies, Laws and Regulations MIIT China
2 Content I. Telecom Development II. Telecom Reform III. Trends Analysis 2
3 I. Telecom Development 1.Telephone subscribers increase continually Total number:1.37 bln., 1/5 of the world subscribers Fixed subscribers: 326 mln., 4 times of those in 1998 Mobile subscribers: 711 mln., 28 times of those in
4 Development of Chinese Telephone Subscribers since Subsri ber s( x10000) 年 1999 年 2000 年 2001 年 2002 年 2003 年 2004 年 2005 年 2006 年 2007 年 2008 年 Year 4
5 Telecom sector develops as a fundamental and leading industry From 1 st telephone installed in 1882 to over 10 mln. subscribers in 1992: 110 years From 10 mln. subscribers to 100 mln. subscribers in 1998: 6 years From 100 mln. subscribers to 200 mln. subscribers in 2000: 2 years Since 2001: increased by 100 mln. new subscribers annually 5
6 2. Telephones penetration rate increases significantly Penetration rate: 77.4 subscribers per 100 inhabitants Fixed-telephones: 24.9 subscribers per 100 inhabitants Mobile-telephones: 52.5 subscribers per 100 inhabitants Telephone-connected villages: 99.7% Telephone-connected natural villages (villages with more than 20 households): 92.5% 6
7 80 Growth of Chinese Telephones Penetration Rate since i on Rat e(%) Penet r at 年 1999 年 2000 年 2001 年 2002 年 2003 年 2004 年 2005 年 2006 年 2007 年 2008 年 Year 7
8 3.Substitution of mobile telephones to fixed telephones continues Mobile Subscribers Oct. 2003: overtook fixed subscribers Up to Aug. 2009: 2.2 times of fixed subscribers Fixed Subscribers Aug. 2007: decreased monthly Up to Aug. 2009: decreased by 46.47mln. 47mln Subscribers Margin between mobile and fixed subscribers: 400 mln. 8
9 Substitutive Effect of Mobile Telephones to Fixed Telephones ep es Subscr i be er s(x10000) f 固定电话移动电话 年 1999 年 2000 年 2001 年 2002 年 2003 年 2004 年 2005 年 2006 年 2007 年 2008 年 Year 9
10 4. Internet develops rapidly Internet users: 338 mln., 160 times of those in 1998 Penetration rate: 23.9 users per 100 inhabitants Broadband internet users: 270 mln., over 90% of internet users Websites: over 2.88 mln., 543 times of those in
11 35000 Development of Chinese Internet Users since User rs(x10000) 年 1999 年 2000 年 2001 年 2002 年 2003 年 2004 年 2005 年 2006 年 2007 年 2008 年 Year 11
12 5. Competition framework farther optimizes Basic telecom sector China Telecom 249 mln. subscribers China Mobile 490 mln. subscribers China Unicom 243 mln. subscribers Value-added telecom sector Over 20 thousand service providers Over 94% providers contain private or foreign capital 12
13 Subscribers Share of Basic Telecom eco Operators Chi na Uni com 25% Chi na Tel ecom 25% Chi na Mobi l e 50% 13
14 6. Telecom tariff drops steadily Telecom tariff level of Aug 2009 drops 8.41% as compared with July 2008 Telecom tariff level drops 60% accumulatively from 1998 to 2008 One-way charge of mobile telephones basically achieves 14
15 Telecom Tariff Level since vol ume r evenue/ sevi ce Tel ecomservice 年 1999 年 2000 年 2001 年 2002 年 2003 年 2004 年 2005 年 2006 年 2007 年 2008 年 Year 15
16 II. Telecom Reform Telecom liberalization deepens continuously Open 9VAS to domestic investors Entry into WTO Open to foreign investors Issue 3 3G licenses Establish China Unicom Breaking up mobile monopoly Establish China Tietong Breaking up fixed monopoly New round of telecom restructure, Further breaking up fixed monopoly 16
17 2. Telecom enterprises restructure Direc ctorate General of Telecom, MPT Former China Telecom Group 中国卫星集团公司 铁道通信责任公司 中国移动通信集团公司 中国电信集团公司 中国网络通信 中国联合通信有限公司
18 Telecom enterprises restructure in 2008 Basic telecom services CDMA network
19 3.Regulatory authority gradually consummates Dept. of Telecom Administration, i i MPT MII established, separation of Post and Telecom Local telecom administrations i ti established MIIT established Create fair compe etition environ nment Separation from enterprises 19
20 Establishment of MIIT MIIT was established according to The Reform Program of Institutions of State Council approved by the 1 st session of the 11 th NPC in 2008 Industry management responsibilities of NDRC COSTIND, excluding responsibility for nuclear power MIIT MII SCITO 20
21 Main responsibilities of MIIT Formulate industrial plan, industrial policies and standards and organize their implementation Monitor daily operation of industry Promote the development and independent innovation of major technologies and equipment Regulation of communications i sector Direct and promote the informatization Coordinate and safeguard national information security 21
22 4. Legislation consummate in the process of reform Law Decision on Safeguarding internet security, NPC Administrative Regulations of State Council Regulations on Telecommunications Measures on Administration of Internet Information Services Regulations on Administration of Foreign-Invested Telecommunications Enterprises MIIT rules Administrative Provisions on Telecom Services Operation and Licensing 22
23 III. Trends Analysis Telecom reform and regulation shall be adapted to social and economic development and technology advancement e Convergence of industrialization and informatization Convergence of telecom, broadcasting networks and internet Effective competition Promulgation of Telecommunications Law 23
24 Thank you 24
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