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January 18, 2011

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Calls for broadband price cut

BROADBAND charges must be slashed if Shanghai is to achieve its aim of becoming a "smart city," members of the city's top political advisory body said yesterday.

"A broadband internet network is also a public infrastructure," Professor Han Zhengzhi from the Shanghai Jiao Tong University told the Shanghai Committee of the Chinese People's Political Consultative Conference.

"The government should lead an effort to reduce the cost to the public."

Shanghai wants to develop itself as a smart city, using information technology to streamline utilities and transport and improve government efficiency, according to the city's 12th Five-Year Plan. Expanding the fiber optic network is a key task.

Professor Zhu Shouzheng, from the East China Normal University, told the conference that "a smart city shouldn't be developed by increasing costs for the public." Zhu also questioned the need for very large bandwidth. "I don't know what's the use of such big bandwidth, except for downloading high-definition videos."

In a written proposal, delegate Fang Rong called on the government to regulate broadband prices. Shanghai Telecom, the main broadband service provider, charges around 150 yuan (US$22.8) per month for 2 megabits per second (Mbps) connection.

"That's about 10 percent of city's minimum wage and makes it difficult for some low-income families to enjoy the achievement in the society's information development," Fang said, blaming insufficient competition in the telecoms industry.

The carrier last month unveiled a new 20Mbps speed package which will cost 180 yuan per month - 9 yuan for each Mbps - and be available in areas with fiber optic connections.

"You can see on a per Mbps basis, fees have already dropped significantly," Zhang Weihua, general manager of Shanghai Telecom, told Shanghai Daily. "More fiber optic cables have to be laid. The speed will increase and, in turn, fees will keep dropping."

China's average internet speed was about 1.8Mbps in 2008, compared with Japan's 63Mbps and South Korea's 40Mbps, Fang said citing industry estimates. At that time, the average monthly spend for Chinese households on broadband was 46.6 yuan. Based on average monthly incomes in each country, that was 18 times the price paid in South Korea and 51.5 times what Japanese broadband users paid.


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