MAIN PAGE | SPEECHES & EDITORIALS | 1999 | DEVELOPMENT OF TELECOMMUNICATIONS
PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | SPEECHES & EDITORIALS | 1999 | DEVELOPMENT OF TELECOMMUNICATIONS
How to Accelerate the Development of TelecommunicationsHan SonglinDeputy Director General, China Telecom Monday, May 17, 1999 The Challenges of the Next Century for the Pacific Basin
Ladies and Gentlemen: Good afternoon. I am very honored to address this panel discussion with my speech "How to Accelerate the Development of Telecommunications". First of all, let me make a brief introduction of China Telecom. The full name of China Telecom is the Directorate General of Telecommunications, P&T, China. It is the greatest telecom operator of China. Authorized by the Chinese government and communication authorities, China Telecom unifiedly operates and manages the national public telecom network, and is responsible for its construction, network operation and service provision. In recent years, from network construction to service development, China Telecom has maintained a relatively high development speed. By the end of 1998, the national public telephone exchange capacity of China Telecom had exceeded 135 million, with the network scale ranking the second in the world. The number of telephone subscribers accounted for 111 million, and that of mobile subscribers accounted for 23.57 million, ranking the third. The national teledensity reached 10.64%, with the urban teledensity 27.7%. In 1998, the total turnover value of China Telecom accounted for 224.8 billion yuan, an increase of 37.6% over the last year, and the telecom revenue accounted for 199.2 billion yuan, 28.5% over the last year. How could China Telecom make such great achievements? To my point of view, on one hand, this achievement benefits from Chinese government's policies to develop telecommunications since the reform and opening. On the other hand, this achievement is also due to the strategy made by the former Ministry of Posts and Telecoms (now the Ministry of Information Industry) to strengthen the construction of telecom networks and enhance the comprehensive communication capability. Next, I shall put forward some of my personal views on how to accelerate the development of telecommunications based on the development of China Telecom. The first point to accelerate the development of telecommunications is, to correctly understand and grasp the international and domestic situations of the telecom industry, grasp various opportunities, and adopt proper communication development strategy. In terms of the international situation, the trend of the world multi-polarization and economic globalization is deepening. The scientific and technology information industry, symbolized mainly by information technology, develops very fast. It is influencing and changing people's working and living styles, and has become an important element and leading power of modern economy's development. Telecom, computer, video and image technologies have impact on each other and are closely connected to each other. Information technology and networks are developing towards digitalization, personalization and intelligency, especially the Internet technologies, mobile communications, e-commerce will be the most potential fields of growth in early next century, their developing opportunities are unprecedented. Meanwhile, since the international market sees more fierce competition, in order to gain the initiative in the future information society, there comes out many large scale international merging and restructuring cases, which are evolving to different industries, and are rapidly changing the industry structure and market competition situation. It leads to a new round of adjustment of information technology revolution and global industry structure. Viewing from China's domestic situation, information industry is the national economy's infrastructure and pillar industry, and has become the new economic growth point. With the development of economy, the expansion of opening-up and the improvement of people's living standards, the society's demands for communication services are increasing day by day. At the same time, our country is continuing to strengthen the construction of infrastructure and foster the communication industry, which has created favorable conditions for the development of communications industry. While closely following the internationally advanced technologies and telecom service development experiences, combined with China's real situation, China Telecom has placed an emphasis on the acceleration of new construction, the improvement of comprehensive communication capability and the fulfillment of various users' telecom needs. We have also stipulated the right development strategy of China Telecom, such as the integration of departments and regions at different levels to enhance their initiatives, high starting-point and new technology leaping development. The strategy also highlights the rapid development of various telecom services guided by market demands, funds raising and development with liabilities, the deepening of telecom reforms and improvement of development energy. Secondly, to accelerate the development of communications, aiming at increasing the communication capabilities and emphasizing the network improvement and optimization, we stick to the principle of focusing on both quantity and quality, moderately speeding-up, and greatly strengthen the construction of telecom networks. In recent years, China Telecom has continuously stressed on the construction and optimization of communication networks. By the end of 1998, the Eight West-to-East and Eight North-to-South trunk lines in the Eighth and Ninth Five-Year-Plan had been established, the total length of the national telecom optical cables reached one million kilometers. The construction of a communication network has been almost completed. This is a network covering the whole country, including both digital transmission and programmed switches, and equipped mainly with optic cable and supplemented by satellite and microwave links, including basic networks, new traffic networks, support networks, access networks, mobile communication networks, data and multi-media communication networks. Today's network is a network which mainly deploys circuit exchange method and is supplemented by data transmission. From the development point of view, the future network will be developed to a comprehensive communication network which mainly deploys IP switch method and also transmits voice, data and video frequency. In the future, as a prospective great telecom operator, China Telecom should construct a network which has super-large capacity and unified communication protocol, and could flexibly support various existing and future traffics. In terms of the present communication network, we could transform and develop it into a multi-functional, technically advanced IP network by adopting wave division multiplexing optic fiber communication technology, circuit selection technology combining ATM and IP, and WEB application technology. Only in this way, we could be invincible in the coming fierce market competition and seek further development. Thirdly, we should strength our sense of selling in the market place and in the society. Oriented by users' demands, we should devote our efforts to telecom marketing. While in developing traditional telecom services, we should explore service developing space, actively develop data and multimedia communications, mobile and other new services. The fixed telephony is the pillar of telecom services. To develop it, as the first step we should further increase our subscribers so as to ensure a continuous subscriber growth. Currently in China, only in the big and medium-sized cities and areas along the coast where the telephone density has reached some extent, but in vast rural areas and in mid and west China the density is quite low, leaving a great developing space. Consequently, CHINA TELECOM has been gradually transferring its fixed telephone equipment installation focus from urban resident homes to suburban areas and relatively developed rural areas as well as college campuses and hospitals which have traditionally been weak communications service links. For meeting ever growing requirements, CHINA TELECOM is encouraging urban residents to install the second telephone line for their homes. These are our endeavors to keep the growth rate of fixed telephone subscribers. As the second step, we should actively inspire telephone traffic, that's to say, we should not only enable people to be able to have the telephone installation but also enable every subscriber to use the telephone. For this purpose, CHINA TELECOM has been continuously opening various new telecom services, including some telephone information services so as to meeting requirements from different kinds of users. Data communications and multimedia communications are newly flourishing telecom services, requiring a huge market, it is of strategic importance to develop these services, for so doing we can not only increase our revenue but also lay a solid foundation for future communication services. To develop the data and multimedia communications services, we have adhered to two strategic principles, the first one is while to emphasize the group, we should also pay due attention to the agent service and the whole sale, the second one is while in exploring information resources and developing network applications, we should pay due attention to develop a variety of user terminals. With the combination of telecom services, the computer communications and the video technology, requirements from the society for such services as the IP phone, electronic commerce are growing day by day, therefore, we should make our developing plans and operating strategies for furthering and promoting these new services. The mobile communications is a developing focus throughout the world. In the last few years, demands for the mobile service in the whole country of China have been growing quickly. Primarily, CHINA TELECOM has been attaching importance to strengthening the mobile communications capability and expanding the mobile network scale. With the capacity developing, CHINA TELECOM has been adjusting its developing strategy, that is to place the capability strengthening and network optimizing at a same important position and to attach importance to the organic combination of the quantity and quality. Not long ago, for developing the mobile communications, CHINA TELECOM began its exploration for such new operating measures as the "set-meal" service, leasing equipment with payment by installments and began to popularize the prepaid SIM card and PHASE 2 services so as to satisfy different kinds of requirements. In developing telecom services, we should analyze and study effects of the macro economy environment and the overall social consumption tendency on telecom services, further strengthen market forecast, expand the market place and improve the service quality so as to develop consumption of communications from the entire society, and we should transfer the potential requirements into actual buying capability. We should provide the society with omni-directional and multi-level communications services. Fourthly, we should introduce proper and orderly competition according to specific communications developing stages. Since the founding of the People's Republic of China and especially since the beginning of reform and opening to the outside world, China's telecom industry has been developing greatly and its developing space during the past few years is especially significant and hasn't been witnessed in other countries. Based on experience in many countries, when communications have developed to some extent, competition should be introduced properly so as to further development, after a further developing period, corporate up-dating and restructuring to the major telecom enterprises should be introduced in order to further strengthen vitality of the enterprises and to further the development. Meanwhile, telecom enterprises in China should gradually go into the international market place and participate in international competition. Developing, properly and orderly introducing competition and further promoting development should be considered as universal developing law of the telecom industry. Distinguished (fellow) delegates, CHINA TELECOM wishes, under the theme of "How to accelerate communications development", to broadly exchanges views with our its counterparts and to learn from each other so as to seek common development and make joint contributions for the global informatization. Thank you. |