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Digitimes Research: China pushing fixed-line broadband network development
Benson Wu, DIGITIMES Research, Taipei [Friday 3 January 2014]

According to the statistics from China's Ministry of Industry and Information Technology (MIIT), the number of fixed-line subscribers in China reached 185 million as of the third quarter of 2013, up only by 9% compared to the same quarter a year ago.

Neither did the country's Optical Network City project achieve its goal, with the penetration rate of FTTH/O reaching only 18%. Although China has the most FTTH/O subscribers in the world, the number of subscribers increased by only 13 million during the first three quarter of 2013 - a number which is only 10% of the increase in 3G service subscribers during the same period.

The development of fixed-line broadband networks has been slow mainly because of a number of reasons, Digitimes Research believes.

First, there is a lack of competition, which gives service providers few incentives to improve their service quality, and in turn deters subscribers from upgrading their connectivity.

Uneven development in urban and rural areas sees fixed-line broadband service providers showing reluctance in investing in less populated regions outside the more urbanized parts in eastern China.

The coming of the 4G mobile era, which sees the country's three major telecom service providers put more of their investments in construction of mobile networks, which can generate faster and better returns. This has prevented investment in fixed-line networks.

But the China government is now taking steps to improve the country's fixed-line broadband service development. In December 2013, the MIIT lifted a ban on China Mobile from running fixed-line network business, a move it hopes will heat up competition in the fixed-line network sector.

Earlier in August 2013, China's State Council announced its broadband network operation and development goals and in October 2013, the State Council introduced a new program aiming at reforming the China's telecom industry and creating a fair competition environment.

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