BEIJING,
Nov. 10 (Xinhuanet) -- China's top economic planner is investigating China
Telecom and China Unicom, two telecommunications giants, over alleged
monopolistic practices in the broadband access business.
If
confirmed, the two major operators could face billions of yuan in fines, the
National Development and Reform Commission (NDRC) said Wednesday, adding that
the investigation started in the first half of this year.
"In
the Internet access market, China Telecom and China Unicom combined occupy more
than two-thirds of the share. With such a dominant position in the market, they
practiced price discrimination, raising prices for companies that are competing
with them, while giving discounted prices to non-competitors," , said Li
Qing, deputy director of the price supervision and anti-monopoly department of
the NDRC.
China
Telecom and China Unicom account for 90 percent of the country's broadband
business and have formed a monopoly in the market, the Xinhua News Agency
reported, citing an anonymous official with the NDRC.
Revenues
from China Telecom's broadband business come to around 50 billion yuan ($7.9
billion) a year while those of China Unicom are nearly 30 billion yuan, Li
said, adding that the two companies would face penalties of up to 10 percent of
their annual business revenues if they were found guilty of monopolistic
practices.
This is the
first such investigation into China's large enterprises since the Anti-Monopoly
Law came into effect in 2008. The result of the investigation is expected to
come out soon, Li said.
Despite
having the world's largest Internet population of 485 million, China's average
broadband speed only ranks 71st in the world, while average costs are three to
four times those of developed countries, said a report released in July by the
Advisory Committee for State Informatization.
Liu Zheng,
information director for business solutions at the research company Analysys
International, told the Global Times that the probe may reduce costs for small
operators and eventually benefit consumers.
"I
don't expect a reshuffle in the market. Penalties won't lead to decrease of
their market share. It's more of a warning to the two operators,"said Liu.
(Source: Global Times)
Editor: Wang Guanqun
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