China In Post-Christmas Spirit

Communications Today, Dec 27, 2000

By Rodney L. Pringle, rpringle@phillips.com

China announced yesterday that it would cut long-distance phone rates by more than 50 percent in hopes of spurring new Internet and telecommunication industries, according to the Associated Press.

The government-announced changes, which will take effect Jan. 1, also call for slashed Internet access and leased lines charges.

Analysts said the cuts could be the biggest change for Chinese phone bills in 51 years of communist rule.

Yesterday's announced changes are expected to reduce revenues for China Telecom, the country's dominant state-owned carrier. The company said earlier this year it expected $20.5 billion in revenue for the year 2000.

The cuts could help China's No. 2 phone company, China Unicom, which has struggled since being created in the mid-1990s, compete with China Telecom. The rates China Unicom pays to access China Telecom's network are expected to fall.