China Telecom sees no revenue impact from tariff removal plan

State-owned telecommunications giant China Telecom is looking to do away with long-distance calling and roaming fees for its mainland customers by September, with its top executive saying the tariff cuts were unlikely to have a major impact on revenue.

In March, Premier Li Keqiang renewed his call for the country’s three state-owned telecommunication network operators to “raise speed, drop prices” as part of the government’s plan to move the industry forward, and all three companies – China Unicom, China Mobile and China Telecom – have pledged to do so by 1 October this year.

At China Telecom’s annual general meeting in Hong Kong on Tuesday, chairman and chief executive Yang Jie told reporters that the company was working towards removing the tariffs in September, a month ahead of the agreed deadline.

“China Telecom has always been raising speeds, from 3G to 4G networks, the rate has gone up from 3.1 megabytes to 300 megabytes. That’s a 100 [fold] increase in speed,” said Yang. “Raising speed is an important way to keep the company competitive.”

Yang said prices charged for data at China Telecom have been decreasing over the years, with the company gradually decreasing prices for its data packages. Furthermore, lower prices for data usage will spur increased demand from consumers, which will help the company’s revenues, he said.

Earlier this month, China Telecom launched a 199 yuan (US$29) unlimited data plan, joining the ranks of China Mobile and China Unicom which already have similar plans in place. Yang said he hoped the unlimited data plans will help increase the number of users.

“[Despite the tariff cuts] we do not wish for a price war and hope the industry will continue at a rational and reasonable price,” he said.

On the issue of mixed-ownership reform, Yang said that China Telecom has not received word that it will be taking part in the government’s push to inject private-sector capital into state-owned companies. However, he acknowledged that if China Unicom’s mixed-ownership reform proves successful as a pilot case, it will “impact the telecommunications industry positively”.