Is the Chinese governments serious drive to push lower prices and faster data speeds behind the much rumored upcoming restructure that could merge China Telecom with China Unicom?
Premier Li Keqiang is on a mission to make sure that China has some of the world’s fastest internet and mobile data speeds while also making sure the price of the data drops significantly. Backed by research from Akamai and ITU which showed China’s speeds compared to other countries placed then in 82nd and 86th place respectively, there has been significant pressure put on the Mobile operators to redo their pricing plans. Already all three operators have announced price decreases between 20% to 35%. However this has not appeased the government or the consumers which find the prices still too far out of their range. According to one consumer “It is like someone told you there is a discount of Ferrari, go buy one!”
Where is it all heading? Already the government has taken a number of serious measures aimed at lowering the industry’s overall cost structure which has included requirements that the operators slash their marketing budgets, that they take more actions against corruption, and introducing major structural changes which included the formation of a new company to own and build the infrastructure on behalf of all three operators. Rumors of a major pending telecom restructure that could be as seismic as 2007 are gaining steam and a major rationale behind them has been to drive to lower costs and increase competition.