Editor's Note: While data rates do not seem that high in China compared to prices in the West, the cost is actually quite high when compared to average income. This translated article reports that Li Keqiang recently called on relevant companies to lower data rates and increase network speeds. However, the author fears this call to action alone will not be enough to spur the Chinese enterprise with a monopoly on data to action.

When visiting an office, friend's house or restaurant for the first time, the first thing that many in China do is ask about the Wifi password. Data rates have become extremely high in China, especially when compared with income and cost of living. Premier Li Keqiang addressed this concern in an economic forum on April 14. NetEase Chairman of the Board Ding Li said that data is very expensive at the moment and that having to pay 70 Yuan for 1G of data is an obstacle for many Chinese. Li responded that the relevant persons should study ways to bring data costs down.

According to a government report, China had 1.29 billion mobile users, and 624 million mobile broadband (3G and 4G) users at the end of February 2015. Despite the massive number of uses, data infrastructure in China is relatively weak and data networks cannot be further developed because of this.

Expensive Data Rates

China's telecommunications charges are higher than those in developed countries when you consider the ratio of the charges to average income. A 2014 report by the International Telecommunications Union confirmed the fact that data is relatively more expensive in China.

OpenSignal is an app that crowd sources information on data and wireless signals from users. Customers can use the software to see which network is the strongest in their area and the information is recorded and stored by OpenSignal. The company recently released a report on the quality of 4G networks in different countries. Europe, Japan and South Korea have especially good quality data networks. Mainland China is not included on the top 29.

Let's look at a price comparison to purchase 1G of data in a few different countries:

1) Hong Kong

PCCW: 176 HK Dollars (140 Yuan), Unlimited calls & SMS, 1G Data
CSL: 217 HK Dollars (173 Yuan), 3000 Minutes Talk, 1G Data
China Mobile HK: 128 HK Dollars (100 Yuan), 1800 Minutes Local Talk, 1G Data

2) South Korea

SKT: 42000 Won (237 Yuan) 180 Talk, 200 MMS, 1.1 G Data
SKT: 75,000 won (429 Yuan) Unlimited Domestic Talk and Text, 8G Data

3) Japan

NTT Docomo: 5985 Yuan (310 Yuan) 3G Data Plan

4)  United States

ATT: 60 Dollars (367 Yuan), Unlimited Talk, Text, and Data
T-Mobile: 70 Dollars (428 Yuan), Unlimited Talk, Text, and Data
Sprint: 110 Dollars (673 Yuan), Unlimited Talk, Text, and Data

5) Australia

50 Australian Dollars (240 Yuan): Unlimited Domestic and International Talk, 1G Data

6) Switzerland

59 Francs (380 Yuan) per month, Unlimited Talk, Text, and Data

7) China

4G “Fei Xiang,”: 128 Yuan, 420 Minutes Talk, 1G Data
Unicom: 136 Yuan, 500 Minutes Talk, 1G Data
4G “Le Xiang,”: 129 Yuan, 500 Minutes Talk, 1G Data

A Monopoly on Data

Li Keqiang urged the relevant departments to study ways to bring data charges down while increasing data speed. The government is now encouraging related businesses and enterprises to assist in 4G building and enhancing network speeds. Li said that China is ranked 80th in the world for telecommunications, according to the International Telecommunications Union.

The obstacles that China faces in bettering its data networks are mainly institutional. On the surface, China data operators have many faces: Telecom, Netcom, and other relevant companies seem to compete for profits, but the companies are actually related. They are actually not in competition at all. This is where telecommunications get sketchy. Companies have built a “conspiracy-style monopoly.” A monopoly happens when the source of a resource is taken over by one enterprise. They are often characterized by lack of service upgrades and different layers of sales that mask its true size and clout. If profits are good now, the telecommunications industry has no incentive to better service or lower prices.

The South Korean Way

In order to lower data costs and increase speed, it is necessary to break up the telecommunications monopoly in order to build better information infrastructure. South Korea did this first. When South Korea started to build their data infrastructure, there was a monopoly on the industry and a lack of modern updates. The South Korean government broke the monopoly and increased investment in the industry. Now, the country has a nation-wide high-speed data network. The lowering of data charges also led to advances in other industries: large file transfer apps, video streaming and more.

With a monopoly on data, high costs and slow speeds, China must do better and break its own monopoly to encourage competition. Li Keqiang urged companies to drop costs and increase speed in order to bring forth a new era of reform for China's data network. However, will this call from the government be enough to improve data infrastructure? We will have to see.

Source: QQ News

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Keywords: China expensive data China data monopoly