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China to allow private investment in broadband

China's Ministry of Industry and Information Technology (MIIT) will allow private businesses to invest money in broadband in China, China News said. 30 Apr 2015

MIIT announced its "Broadband China strategy in response to a call from premier Li Keqiang last month for cheaper and faster Internet provision. It also plans to accelerate 4G coverage across China, China News said.

Wen Ku, director of the technology division of MIIT, told China News that high fees are caused by a lack of supply in the market.

MIIT hopes to encourage companies moving into the sector to build shared platforms, to reduce their operating fees and further cut costs to consumers, China News said.

MIIT will also build infrastructure to increase the average internet connection speed. For fixed line broadband, it hopes to replace the current ADSL (asymmetric digital subscriber line) infrastructure with al all-optical network.

There has already been a 60% cut in mobile charges and a 30% fall in fixed broadband fees since 2011, China News said.

Competition expert Paul Haswell of Pinsent Masons, the law firm behind Out-Law.com, said: "China is the largest internet user in the world, with a growing demand for fast and efficient services, which is on occasion hampered by either an infrastructure which cannot keep up or government policy."

"Allowing private investment is important for two reasons: firstly the investment can result in an increase of Chinese citizens who are online, and second it suggests willingness, or at least an initial willingness, for China to open up its closed and highly regulated communications market."

In January, MIIT said it had added seven access points to the world's internet backbone, in addition to the three points that connect through Beijing, Shanghai, and Guangzhou.

At the time, MIIT said that China had laid more than 3,000 kilometres of fibre optic cable since October 2014 and invested 2.9 billion renminbi ($477 million) in its construction. This expansion was driven by the country’s three state-owned telecom operators, MIIT said.