Telecoms official highlights wasted spending in China and calls for change

9 Aug 2005

Yang Xianzu, a member of China’s top advisory body, has been quoted in a Beijing magazine as saying that pointless telecoms construction has wasted more than CNY200 billion (USD25 billion). The official – a former head of China Unicom and now the leader of a research group into redundant telecoms spending – went on to urge the country’s lawmakers to break the sector’s monopoly in a bid to cut waste and boost development. The research group found that optical fibre trunks linking provincial networks and major cities are more than 3.6 million kilometres long, but only 20% gets used. As reasons for the unnecessary spending, the research group cited government policy that encourages the building of new networks, the absence of a national network master plan, and the inadequacies of the country’s telecoms laws and regulatory framework to keep pace with industry developments. Yang claims that a fair competition mechanism must be in place before operators are eligible for 3G licences, otherwise there may be further redundant network construction.