Shanghai races to fore as investment pays off

PUBLISHED : Thursday, 28 August, 1997, 12:00am
UPDATED : Thursday, 28 August, 1997, 12:00am

Three years ago, potential customers in Shanghai had to wait six months or more for a telephone to be installed. It took just as painfully long to apply for a mobile phone with an international direct dialling (IDD) service.

Today, thanks to massive investments in the telecommunications industry since 1995, that wait has now been reduced considerably.

An applicant in the old city centre of Puxi can expect to use his or her phone about a month after paying the installation fee of 3,500 yuan (about HK$3,251).

In Pudong, the country's designated business district, which has been extensively cabled, the wait can be as short as a week, roughly the same time it takes Hongkong Telecom to install and activate a line in the SAR.

But nothing illustrates the pace of change in the sector more vividly than the speed with which a cellular phone can be connected.

Walk into any of the Shanghai Posts and Telecommunications (SP&T) offices to buy and register a Motorola, Ericsson or Nokia mobile phone, and you can start making local calls in a day. If you need an IDD and roaming service thrown in, it takes about a week.

As in Hong Kong, a handset in Shanghai is as much a status symbol as a necessity for the businessman or stockmarket investor. For the man in the street, public telephones are easily found.

Shanghai has almost five public telephones for every 1,000 residents - the highest ratio in the country.

As the demand for phone lines can more or less be met in a month, tales of customers having to pay 'coffee money' to jump telephone queues - commonly circulated in the old days - have ended.

The city once known for its telephone 'nightmares' is slowly emerging as one of the country's front-runners in the industry.

After decades of neglect, Shanghai began investing heavily in telecoms in the second part of the Eighth Five-Year Plan from 1991 to 1995. The momentum is being sustained in the Ninth Five-Year Plan as the city aspires to regain its status as an international financial centre.

An SP&T official summed up the telecoms policy this way: 'Develop, develop and develop quickly; invest, invest and invest more.' A look at the statistics underlines that commitment. In 1990, when the city was opened to foreign investors, annual investment in the sector was just 440 million yuan. Last year, the investment was seven billion yuan and this year it is scheduled to grow to 7.5 billion yuan.

As a result of the 17-fold rise in investment, the exchange capacity has expanded sharply. From 740,000 lines in 1990, the capacity rose to 4.5 million lines last year and will pass the five million mark by the end of this year.

The number of subscribers rose from 457,000 in 1990 to three million last year. This will climb to 3.63 million by December. One in two families today has a telephone while the tele-density reaches about 30 per cent. That puts Shanghai's exchange capacity and tele-density at the top of the country's telecoms league.

Two advanced transmission systems - the synchronous digital hierarchy (SDH) high-speed transmission network and the No 7 signalling system - have been built to beef up the speed and efficiency of the local network.

The improvements in the mobile phone network are even more spectacular. Thanks to the vast investments in the networks, Shanghai has seen the number of mobile phone subscribers rise from a mere 2,000 in 1990 to a forecast 630,000 by the end of the year.

There are now more networks than anywhere else in China. There are two analogue networks and two global system for mobile communications (GSM) networks (belonging to China Telecom and China Unicom). In addition, experimental personal communication services (PCS) and code division multiple access (CDMA) networks are being installed. By the end of the year Shanghai will have a capacity of 950,000 mobile lines.

The SP&T official said the huge investments were aimed at boosting Shanghai's role as one of the three international gateways and eight domestic centres of long-distance telecoms for the country.

The international exchanges with ISDN and intelligent functions have a capacity of 20,000 circuits. There are now 68,000 long-distance domestic and international lines, essentially enough to meet demand.

New services such as ISDN, Internet, international mobile communication roaming and high-speed data leased lines are part of the city's efforts to enhance its capability as an emerging financial centre.

Shanghai On-Line - the city's version of the Internet - was introduced last year as part of its public information network infrastructure platform, which comprises seven networks.

Besides Shanghai On-line, the other networks are the digital data network (DDN), which is the largest in the country and used mainly in the financial industry; CHINAPAC, a local packet-switch public data network; the public radio communication network; the asynchronous transfer mode (ATM) broadband experimental network; a second-level fibre-optic transmission network; and the local digital video conference network.

The SP&T official said large sums would continue to be invested in the telecoms industry in the next few years, with particular emphasis on the development of an information superhighway, estimated to cost at least 30 billion yuan.