China's telecommunications industry will continue its high growth momentum next year, as the government is to speed up its efforts to hammer out a more open and transparent market environment, industry experts say.

"The government is working on many telecoms-related issues to further boost the industry," said Chen Jinqiao, director of the Chinese Academy of Telecommunications Research (CATR) of the Ministry of Information Industry (MII).

The long-awaited Telecoms Law, for example, is likely to be rolled out next year as the draft of the law has already been at the top of the waiting list for the approval of the National People's Congress, Chen told China Daily yesterday at a conference focusing on telecommunications development in 2005.

It will greatly help to get rid of malpractice and ensure the healthy development of the industry, he said.

Currently, there is only a telecommunications regulation which guides the development of the telecoms industry.

"In fact, some regulations related to the telecoms industry no longer fit the development of the industry given its fast development," Chen said.

He also said besides reviewing existing policies and regulations, the government should spare no efforts to cultivate market demand as well as encourage innovations in the industry.

"We need stimulating policies to encourage demand," he said.

Meanwhile, the government should try not to interfere in the market via administrative measures such as quotas or licences, along with enhanced market supervision.

"We are seeing many new opportunities and huge potential for the market as the country is striving to be a telecoms powerhouse internationally," Chen said.

The government has, in fact, already rolled out many key projects since early this year, such as the studies on the third generation (3G) of wireless telecommunications and universal service, which enable the improvement of tele-density in rural areas.

"Those projects have provided great market potential for the industry," he said.

MII's latest figures indicate that telephone subscribers in China had topped 635 million by the end of October this year. It has recruited more than 310 million fixed-line subscribers and 325 million mobile phone users.

It also showed that by the end of October, the telecoms industry had accomplished revenue of 431.6 billion yuan (US$52 billion), up 13.3 per cent from the same period of last year.

Meanwhile, the figure for broadband users stood at 21.7 million.

For fixed-line telephone services, Gong Shuangjin, chief expert of CATR, said she believed the prospects are still very promising despite mobile services greatly eroding their business margin.

"Besides providing high quality voice services, fixed-line operators should also offer more data-based services and multimedia services," she said.

She said it would be an effective way for fixed-line operators to fight against the decline of ARPU (average revenue per user) by expanding to multimedia services based on broadband networks.

Figures show that the ARPU for fixed-line services went down from 84.3 yuan (US$10.10) in 2003 to 76 yuan (US$9.10) this year.

As for mobile telecom services, "though voice business will continue to dominate the market, value-added telecoms services are likely to achieve great development next year," said Wang Zhiqin, vice-director of the Standards Institution of the CATR.

She said she believed that value-added telecoms services will become very popular in the market next year. They include multi-media message services, mobile stock, mobile payment, multimedia ring-back tones and location-based services.

(China Daily December 17, 2004)