|China to Accelerate Spending on Optical Fiber Network|
On April 8, 2010, the Ministry of Industry and Information Technology (Chinese: 工业和信息化部) posted a circular jointly issued by seven ministries, calling for acceleration of optical fiber network construction.
The circular, titled "Opinions to Promote the Construction of Optical Fiber Broadband Network", identifies construction plan for the next few years.
According to the circular, China will investment a total of RMB 150 billion in fiber networks in the next three years. During the three year period, it is planned that 50 million new broadband users will be added. The circular says optic fiber brandband industry is the fastest growing sector amongst information industry, and developing the sector will "improve network infrastructure, enhance indigenous innovation capability and stimulate related sectors".
The circular points out telecom carriers have been reluctant in underdeveloped areas because of the high cost and lower returns. So government needs to grant relevant policy support to encourage the construction. In developed areas, optic fibers should be directly built into commercial buildings and residential areas, and speed should reach at least 8Mbps by 2011. It says optic fiber related products would enjoy preference in certification of National Indigenous Innova tion Product Catalog and in government procurement projects.
The US Technology Office in Beijing made two comments on this: first, this is still part of the ongoing ICT stimulus plan in China; second, it is another sign of competition between the broadcasting and telecom sectors. The ICT Rejuvenation Plan released last February prepares up to RMB 600 bln to be spent within three years, so it is no surprise to see sub-plans like that on the fiber network. In addition, this circular was initiated by MIIT which dragged in a few other tech authorities, partly because the broadcasting sector has rolled out the NGB project last year and has thus directly threatened the existing broadband networks soley operated by telecom carriers. Only through upgrading the existing network could the telecom sector maintain its advantage in the broadband era. In 2009 China's bro adband users totalled 346 million, 90.1% of all Internet users, and sources say the market will continue its double digit growth in the near foreseeable future.