Fixed wireless access (FWA) is seen as a means of overcoming problems caused by China's vast remote areas and providing reliable telephone access to its more than 1.2 billion people.
About 450,000 of the country's 740,000 villages - almost 61 per cent - still had no telecommunication connection, according to Professor Zhu Qiliang, general director of the Nortel research centre at the Beijing University of Post and Telecommunications.
Increasingly, FWA is being seen as an alternative to fixed-wire lines in rural areas, where laying cable takes a long time and is relatively costly due to the few people it would serve.
FWA is similar to mobile phone technology and Professor Zhu said this was a key year for the emergence of FWA.
Despite more than 20 trials between 1996 and 1997, FWA services remained at the developing stage and were not commercially operational, he said.
FWA's US$700-per-subscriber cost was too high, compared with $200 for wireline connection in urban areas. However, it was a far cry from the maximum $1,600 cost per wireline in rural areas, where costs escalated as the number of telephone subscribers per square kilometre decreased.
Professor Zhu also said the technology still was not mature enough. Voice delays - similar to echoes on low-quality, long-distance phone calls - and dialing delays were serious drawbacks.
Another was the lack of a standard air interface or working spectrum for WLL products between the mainland and the rest of the world.
'Now the time has come when vendors have to reconsider their prices and improve their products,' Professor Zhu said.
Per-subscriber price would vary according to geographical and population density, but would need to be kept under $400 for FWA to be economically viable in rural areas where financial resources were low but FWA was most needed.
He said he had no doubt the mainland would achieve its goal of 8 per cent GDP growth this year, and therefore all planned infrastructure projects would go ahead, including FWA.
China's Ninth Five-Year Plan to 2000 provides for the addition of 53 million fixed lines to the public telephone network within the next three years, an average of 17.7 million lines per year.
The plan also targets providing 'a telephone to every village' and bringing rural telephone penetration up to 1.5 per cent, or a net increase of 1 per cent between 1998 and 2000.
At today's rural population level of 960 million, this represented about 9.6 million rural telephone subscribers.
Professor Zhu said FWA had the potential to reach 5 per cent of this market, or 0.5 million subscribing telephone lines, by 2000.
While half a million FWA phone lines was only about 2 per cent of the nearly 24 million lines planned for the national telephone exchange, it could not be neglected.
Eventually, FWA could support services such as the Internet and multimedia applications, which meant vendors who got in first could earn a long-term presence.
In the long run, prospects for increased FWA use in the mainland depended on the access cost per subscriber, and efficient use of radio spectrum bandwidth, he said.