China to invest USD71bn in infrastructure development

7 Jul 2015

China is set to invest CNY435 billion (USD70.98 billion) this year on improving the nation’s internet infrastructure as part of plans to lower broadband tariffs and improve access speeds, China Daily writes, citing Zhang Feng, a spokesperson for the telecom regulator the Ministry of Industry and Information Technology (MIIT). Faster and cheaper broadband services are expected to help drive grass-root innovation and the growth of startups, the official explained: ‘The country is aiming to build an internet service that can benefit the entire public, because investing in the cyber sector can boost domestic consumption and create jobs.’ The drive follows comments earlier this year, in which Premier Li Keqiang criticised the country’s expensive and middling-speed internet access. As part of the central government’s efforts to drive down pricing, the state has ordered the ‘Big Three’ telecom operators – state-owned firms China Mobile, China Telecom and China Unicom – to lower their average prices for fixed and mobile broadband by 30% by 31 December 2015.

Cao Shumin, director of the MIIT’s China Academy of Telecommunication Research (CATR), meanwhile, pointed out that China is on par with the US and Western Europe in terms of mobile internet access speeds, with the ‘biggest gap’ being in fixed broadband connections as ‘poor connectivity in rural areas drags down the average speed.’ According to the most recent data published by the MIIT, 51.0% of Chinese broadband users utilised connections with transfer rates of at least 8Mbps in May 2015, compared to 27% a year earlier, whilst 17.3% had access to broadband speeds of more than 20Mbps, up by 6.9 percentage points year-on-year.