Recently, the spokesman and chief engineer of MIIT Mr. Zhang Feng revealed that the three major operators have invested over CNY 90 billion in the “Extending Communication to Every Village Project” in the past 10 years, which solved the telephone connection problems in about 210,000 administrative villages and natural villages and broadband coverage problems in about 15,000 towns and administrative villages.
Although the broadband development has made great progress in the last few years, the broadband development level still relatively lags behind in rural and remote areas. Zhang Feng pointed out that FTTH coverage reached 366 million households by the end of August 2015 and the number of newly added FTTH coverage households is 110 million in this year; the total number of fixed broadband users reached 209 million and the penetration rate exceeded 50%; the average access rate of the nationwide fixed broadband users reached 14.4Mbps, which increased nearly 1.2 times compared to the end of 2014.
However, due to the relatively weak economic foundation, complex geographical environments and scattered distribution of population in rural and remote areas, the broadband construction and maintenance costs are high and revenue is low, there is certain degree of market failure and a widening trend of urban and rural digital gap. At present, the rural broadband household penetration rate is about 40% lower than the urban areas and nearly 50,000 administrative villages have not got access to the broadband network. Judging from the international experiences, establishment and improvement of the telecom universal services compensation mechanism and supporting the telecom infrastructure improvements in rural and remote areas are common practices.
At present, the MIIT and the Ministry of Finance have completed thorough investigation of broadband construction in rural regions, of the 50,000 administrative villages that unavailable of broadband network, 98% are concentrated in the central and western regions; within the 150,000 administrative villages that need upgrade and reconstruction, over 80% are also concentrated in the central and western regions of China.