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Chinese Internet Fees Higher Than Developed Countries
AFAR
5/9/2007



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The Internet is changing people's life. However, the fees borne by Internet users in China are ten times higher than those in developed countries and 8 percent higher than those in the East Asia and Pacific region.

According to World Bank Report "China's Information Revolution: Promoting Economic and Social Transformation" that Internet users in China pay more than 10 percent of their income while those in developed countries pay less than 1 percent. This is despite the fact that China has the world's second largest Internet and broadband market.

According to "The 19th Report on the Development of the Internet in China," published in January, on average, China's Internet users pay 83.5 Yuan per month (US$10.84). Converted at absolute currency value, Americans can buy the same amount of information at 1/13 of this price.

At present, China's Internet users do not enjoy the same standard of Internet service as do developed countries. Though Chinese Internet Service Providers (ISP) advertise 1 mpbs download speed, the actual transmission rate is much lower. . This means that China's Internet users pay more but receive a lower quality of Internet service.

The ISPs are in a monopoly market. In order to continue to monopolize the market so that Internet fees are sustained, these companies use all means to stifle competition; thus the interests of its users are not a concern. Take the Beijing region as an example. The average monthly income of Beijing residents is around 1,000 yuan (approximately US$120.77) which makes them comparatively wealthy. Yet they have to pay about 100 yuan (approximately US$12.08) a month to use the Internet. The high fees mean that a proportion of the residents choose not use the Internet at all.

The report also revealed that high Internet fees affect Internet development to some degree. One expert predicted that if the average cost were 20-30 percent lower, there would be an unprecedented increase in the number of Internet users. The number might increase by 20 million a year. At present there are 137 million Internet users in China. By the year 2010, this number should reach 200 million.

Compared to India, also the developing nation, China still looks bad. The Indian government plans to construct a nationwide optical network using part of the Universal Service Obligation Fund (USOF) to speed up the nation's economic development. According to the India Times, the government plans to provide 2Mbps free broadband service for all Indian citizens in two years time. It is said that the project will be carried out by India's leading telecommunications companies, BSNL (Bharat Sanchar Nigam Ltd ) and MTNL (Mahanagar Telephone Nigam Ltd.) are committed to installing the upgrades. When the project is completed, consumers will reap huge benefits.

Currently, San Francisco, Paris and Tokyo have launched free Wi-Fi hotspots in the city. These free broadband projects are aimed at stimulating the local economy.

Below are the Internet usage fees charged in various countries and regions (averaged at 100Kb/s broadband service per month in US$D):

Nation Rate
China 10.8
Turkey 10.52
Mexico 6.25
Spain 4.84
Australia 3.45
Canada 1.01
Hong Kong 0.83
Britain 0.63
United States 0.49
France 0.36
Italy 0.30
Taiwan 0.18
Netherlands 0.14
Republic of Korea 0.08
Japan 0.07

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