The Tenth Five-Year Plan of the Telecom Industry

1. Development objectives set by the Tenthth Five-Year Plan

During the Tenth Five-Year Plan (2001-2005), the telecom industry will continue at a development pace faster than the growth of the national economy. Total business income will reach 920 billion yuan (US$110.84 billion) by 2005, tripling the annual income of 2000.

The total length of fiber optic cable will reach 2.5 million kilometers, including more than 500,000 kilometers of long-distance cable that will almost cover the entire country. The overall capacity of the fixed communications facilities will exceed 300 million lines and the overall capacity of facilities for mobile communications will exceed 360 million subscribers to rank first in the world.

The quantity and quality of fiber optic cable for international telecommunications will be significantly improved and China's market share in main international markets will also expand. By 2005, China plans to develop into a major telecommunications hub in Asia and a center for international telecommunications exchanges and information services.

The amount of Internet-linked computers will reach 40 million and the number of ISP and ICP will reach 5,000. Telephone subscribers will exceed 500 million households and the national penetration percentage of telephones will top 40 percent. By 2005, 95 percent of administrative villages will be plugged into telephone networks.

Fixed-line telephone subscribers will reach 240 to 280 million, making up 20 percent of the world's total users. Mobile communications subscribers will also be world leaders, reaching 260 to 290 million -- one-quarter of global users. Subscribers to data, multimedia and Internet services will climb to 200 million with a penetration rate of 15 percent. The service quality of the telecom industry will meet corresponding national standards.

During the Tenth Five-Year Plan total fixed assets investment in the telecom industry will reach 1,250 billion yuan (US$150.6 billion). The input-output ratio will jump from 1:1.5 to 1:3.3 and the output value of per-100-yuan fixed assets will rise from 50-55 yuan to 60-70 yuan.

Telecom laws and related regulations will be issued and a fair, impartial and regulated market will be established.

The online government project will also produce positive effects. All local governments above the county level will have Websites and all government documents above the prefecture and city level will be created, dispatched and made available electronically. The public will therefore be able to search governmental information via the Internet.

Technologies and the network basis for e-commerce will be developed to satisfy the development of e-commerce in China. B-B e-commerce and the B-C e-payment system will also be promoted.

2. Developmental key points of the telecom industry in the Tenth Five-Year Plan

During the Tenth Five-Year Plan the fiber-optic transmitting network will continue to be the key component of development. Microwave and satellite transmissions will be developed and improved since supplementing means safeguarding normal operations and meeting emergency requirements for transmission.

The long-distance transmission network of the fiber optic cable will be continually improved and a new 200,000-kilometer domestic long-distance fiber optic cable will also be established. More efforts will be put into the construction of international seabed fiber-optic cables. Key to cross-province, long-distance fiber-optic cables will be the construction of optic lay and a new type of fiber optic cable in areas with big portfolios to fulfill the needs for transmitting bandwidth from different social groups.

The overall arrangement of the transmission relay network will be further adjusted to optimize network organization. The nation's main transmission network of fiber-optic cable resources will be brought into full play to avoid repeat construction. The industry will speed up the construction of the broadband network and promote an integrated entry of different operations, such as video, data and voice.

The development of fixed telephone networks will focus on rural areas and midwest regions in China. More value-added services will also be developed. Mobile telecommunications will grow rapidly and the sustainable capability of network operations will be strengthened. The construction of a third-generation mobile communications system will begin around 2003 to take advantage of the favorable opportunities for developing IP-based communications networks.

The exploitation of information resources is the most important task, particularly information on important domains such as governments, industries and enterprises, and bringing them to the Internet. The country will encourage the development of information data banks for education, medical and film industries.

3. Policies and measures for developing the telecom industry in the Tenth Five-Year Plan period

(1) To strengthen the construction of the legal system and promote the development of the telecom industry

The government will strengthen macro guidance, supervision and administration of the industry to create an environment of policies, regulations and market competition favorable for the development of the telecom industry.

(2) To enhance the capability of innovation and accelerate the industrialization of research

Telecom operators will be encouraged to use homemade telecommunications facilities and software with the same quality and functions. Measures will be worked out to help telecom operators conduct their own research and exploit organizations or cooperate with existing ones and increase research expenditure to improve the overall technological innovation capability of the telecom industry.

(3) To establish scientific and reasonable polices for the charges

Scientific decision-making techniques and rigorous legal procedures will be deployed to form reasonable expectations for telecom charges and to make it a policy-regulated tool to promote the industry's development.

The level of charges and the structural adjustments will be based on costs and directed by the market.

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