Is the Chinese governments serious drive to push lower prices and faster data speeds?

   

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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.

Related links: link 1; link 2; link 3

About The Author

Chris DeAngelis is a Partner and the General Manager of Alliance Development Group (ADG). Chris is considered a leading expert on the Chinese technology scene and is regularly cited in leading media including The Wall Street Journal, The Financial Times, Forbes, TechNode, MSNBC, Digital Trends, China Economic Review, International Business Times, Thomson Reuters and others. He has BS in Accounting from Lehigh University and an MBA from Columbia Business School. He has two daughters and has been living in Beijing since 2005.