Opinion

Telecom companies' monopoly must end

(China Daily)
Updated: 2009-12-02 07:54

The Ministry of Industry and Information Technology (MIIT) and the National Development and Reform Commission (NDRC) have jointly issued a new administrative plan for landline phone charges. This is a right move, but the industry is crying out for fair competition because telecom service providers still behave like monopolies in many regions of the country, says an article in Guangzhou Daily. Excerpts:

The document issued jointly by MIIT and NDRC for the first time grants telecom companies the power to fix their own charges. This essentially means landline phone charges will be reduced and the government would no longer play a role in fixing prices.

But the telecom companies would have cut the charges even if MIIT and NDRC hadn't made that clear, because recent years have seen more and more subscribers shifting to cell phones.

The telecom service providers have been losing their monopolistic status over the past decade. As a result, they were forced to waive charges for installing landline phones, cut monthly rentals and made long-distance calls cheaper. As MIIT says, the number of landline-phone subscribers has fallen to 18.982 million this year.

But the telecom service providers are yet to give up their monopolistic working style in some regions. Take Beijing for example. The monthly rental for landline phones in the city is still more than 20 yuan ($2.93), and a subscriber has to pay more than a cell phone user to make a long-distance call.

What has made mobile phone services so competitive? The answer is market competition. When fair competition heats up, monopolistic enterprises have to change their traditional business model. Or else, they would suffer losses.

Similarly, fair competition in healthcare, education and real estate is vital for the development of those sectors.