Premier Li Keqiang chaired the recently held State Council executive meeting, which decided to improve the broadband telecom universal services compensation mechanism in rural regions and remote areas in order to narrow the urban-rural digital gap.
The meeting pointed out that narrowing down the gap between urban and rural areas is the great potential for China’s development. Reform and innovation of the telecom universal services compensation mechanism and supporting the broadband construction in rural regions and remote areas are important initiatives to make up the “short board” of public products and services, it can effectively drive the investment and promote the cooperative development of urban and rural regions.
The meeting has decided to increase the central financial investments, guide the local governments to enhance policies and financial supports and encourage basic telecom operators, radio and television enterprises and private capital to equally join the broadband construction and operation and maintenance markets in rural regions through competitive bidding and other fair activities, at the same time, the government will explore the PPP, contract operation and maintenance and other market-oriented ways to stimulate the active participation of each side, strive to achieve broadband coverage in 50,000 villages that haven’s get access to broadband network and upgrading of broadband network of more than 30 million rural homes by 2020, and the broadband network will cover 98% administrative villages and gradually realize wireless broadband coverage, this program is expected to invest more than CNY 140 billion in total.
The meeting required that the government should strengthen the examination and certification as well as supervision, for the projects that don’t meet the certification requirements, the government should reduce or cancel the financial subsidy and make a notice. The broadband construction and operation should accept social supervision and get the people in remote regions rid of poverty and become better off through the information technology.
Insiders pointed out that this policy was definitely great news for the telecom operators. Although China has put “broadband China” into national strategy level, but there hasn’t been significant capital investment, which also brought great pressure to China Telecom and China Unicom in the fixed broadband inputs. The officially launch telecom universal services compensation mechanism will not only reduce telecom operators’ investment pressure in full telecommunication coverage and broadband access, but also help them to carry out the "improve the speed and cut down the tariff" program.
The director of China Telecom Technology Committee Wei Leping once said that it’s hard to recover the investment even with 30 years in some rural and remote areas. In the enterprise perspective, it doesn’t worth the investments, but the operators bear the obligation of universal services.