Premier's vision on speed and cutting costs starting to take shape

When Premier Li Keqiang delivered his Government Work Report for on March 5, increasing broadband speed and lowering costs for internet services nationwide was one of the messages that attracted the widest attention, and applause, that day.

It did not take long to see the first concrete steps of implementation.

The State Council's executive meeting on May 10 announced further efforts in upgrading information consumption and ensuring greater security for personal information.

The government will increase internet speeds, while connection costs, telecommunication, logistics, after-sales services as well as other expenditures, will be lowered for enterprises, a statement following the meeting said. Also, information services costs will be reduced, while information security will be boosted.

Li said in his work report that a faster, safer and more cost effective internet is crucial for cross-sector development.

Zhang Aihua, a professor at Beijing University of Post and Telecommunications, believes measures following the May 10 meeting will boost new economic growth engines.

Zhang said areas such as public infrastructure, digital home appliances, intelligent wearables, online education as well as medical services are where China's new economic growth engines are burgeoning, and they also need more policy support to overcome development burdens.

He added that reducing internet costs and telecommunication fees, in general, helps all businesses. As connection costs are reduced, as well as those for telecommunications, logistics and after-sales services, companies will see the benefits, Zhang said.

"The telecommunications industry is a key sector for the economy, and its development will provide a host of advantages. Measures, like increasing broadband speed and cutting telecommunication costs drive the development of many industries, because it boosts consumption, and helps companies to boost profits," he said.

At present, mobile phone users can face large bills when making long-distances calls, including calls across different cities and provinces in China. The work report delivered in March promised to reduce these fees by the end of 2017.

Xiang Ligang, a telecoms expert and CEO of the telecom industry website cctime.com, said the government's policy will motivate tech companies to step up research and development of smart home products.

"It will, in particular, boost startups' willingness to experiment with new technology, and roll out more affordable digital products such as virtual reality goggles," Xiang said.

Zhang also points out that information consumption in China is developing rapidly, even compared with many developed countries, making faster internet access at lower cost a pressing demand. "China is growing fast in areas such as mobile internet, mobile payment, social networking, mobile e-businesses - no less than many developed countries. These industries are nurturing innovation with more applications that demand a faster and cheaper internet, and the new policy will pave the way for these new economic drivers."

Comparing China's charging system in telecommunications with the United States, Zhang said that China still needs to make improvement to implement a more cost-effective charging system.

For example, he said the US widely applies flat-rate cellphone charges on a monthly basis, with no limits on phone calls nor internet flow. This method is rare in China, he added.

"Also, major operators in China always prefer to attract new customers with lower fees, yet leave limited room for discounts for their existing clients," Zhang added.

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